Luxembourg to launch defence campus and innovation fund

The strategy, jointly developed by the Ministry of the Economy and the Directorate of Defence, with the support of the Ministry of Higher Education and Research and the Directorate for Foreign Trade, sets out a clear vision: ensure that Luxembourg's rising defence expenditures deliver tangible economic and societal returns by developing domestic industrial and technological capabilities.

"With this first national strategy, Luxembourg is taking a crucial step: we are laying the foundations for the development of an innovative and resilient defence industry, capable of strengthening our strategic autonomy while creating new economic opportunities for our businesses and research institutions," said Lex Delles, Minister of the Economy, SMEs, Energy and Tourism.

We are laying the foundations for the development of an innovative and resilient defence industry, capable of strengthening our strategic autonomy while creating new economic opportunities for our businesses and research institutions.
Minister of the Economy Lex Delles

Defence Minister Yuriko Backes added: "To defend our essential security interests, we must rely on a solid Luxembourg defence technological and industrial base. This is why Luxembourg must raise its ambitions and further integrate its national stakeholders into the supply and value chains of our partners within the EU and NATO."

Priority technology fields for defence innovation

Rather than attempting to compete across the full spectrum of security and defence capabilities, the strategy identifies targeted technological domains where Luxembourg already possesses significant know-how. These priority fields span land, air, space and cyber domains and include:

• Advanced materials and innovative manufacturing
• Autonomous systems, robotics and artificial intelligence (AI)
• Cybersecurity
• Space technologies applied to defence
• Logistics and military mobility
• Circularity and strategic materials recycling
• Data, AI and quantum technologies

These areas build directly on Luxembourg's well-established strengths in sectors such as space, digital technologies and advanced materials, enabling companies and research institutions to transfer proven civilian expertise into defence applications.

Innovation as the primary driver

Aware of the country's limited size, the government is placing innovation at the heart of its industrial development approach for defence. A dedicated "innovation pipeline" will be established to connect existing capabilities with emerging market opportunities.

The strategy specifically provides for targeted support to startups and scaleups, as well as their integration into European value chains. Additional measures include the systematic analysis of intellectual property arising from public research to identify transferable technologies, and the role of "first customer" that the Directorate of Defence may assume, where possible, to facilitate companies' entry into this complex market.

This "first customer" mechanism is designed to help innovative companies build track records and credibility, positioning them as trusted partners for Luxembourg, European and transatlantic defence procurement.

Defence Innovation Fund: Financing R&D and innovation

To underpin the strategy, the government is establishing a Defence Innovation Fund, which will fund both individual companies and investment funds. 

In addition to the Defence Innovation Fund, the Ministry of the Economy launches yearly calls for defence-related R&D projects in collaboration with the Directorate for Defence and the Luxembourg National Research Fund. 10 projects selected under the first two calls have been awarded a total of €4.3 million of public co-funding, and a third call for projects is currently on-going.  

Defence Campus: A hub for research and industry collaboration

In parallel, a new Defence Campus will be created. This physical hub will bring together companies and public research institutions under one roof, fostering collaboration and accelerating the translation of research into deployable defence solutions.

The campus concept follows Luxembourg's proven approach of creating dedicated innovation ecosystems, much as the country has done with its AutoMobility and Space Campuses. Further details on the Defence Campus are expected to be announced in the coming months.

To defend our essential security interests, we must rely on a solid Luxembourg defence technological and industrial base.
Minister of Defence Yuriko Backes

By focusing on innovation, integrating national stakeholders into European and allied value chains, and developing essential competencies, Luxembourg is laying the groundwork to become a credible, agile partner — capable of delivering concrete solutions to meet today's defence challenges.

Photo credits: ©MAE