Varieties of Entrepreneurial State in Defense Innovation and Upgrade Across the European Union: The Case of Integrating Ukraine-Rooted Miltech Companies

European efforts to strengthen innovation and upgrade defense capabilities are not only shaped by supranational instruments but also by diverse national strategies. This paper compares how EU member states implement the logic of the entrepreneurial state in defense innovation, situating these approaches within broader debates on varieties of capitalism in the context of geoeconomic rivalry. While the EU sets overarching missions, national governments and business actors co-create distinct governance models for defense upgrade—ranging from mission-oriented procurement and equity stakes to subsidy-driven de-risking and accelerator programs. The central research question is: How do EU member states differ in applying entrepreneurial-state principles to defense innovation, and how do state–business interactions shape these trajectories under conditions of geopolitical competition? Drawing on Mazzucato’s framework and varieties-of-capitalism theory, the paper examines whether national approaches move beyond de-risking private investment toward capturing public value and embedding strategic autonomy. Methodologically, the study combines comparative policy analysis with approximately 30 semi-structured interviews with defense-tech entrepreneurs, investors, and national officials across France, Germany, Poland, Estonia, and Denmark. A particular focus is placed on Ukraine-rooted miltech companies seeking integration into EU markets, as their experience illuminates the interaction between peripheral innovation ecosystems and core European governance structures. Empirically, the research explores how business agency—through primes, SMEs, and startups—interacts with state instruments to influence risk-sharing, procurement integration, and cross-border collaboration. These dynamics reveal hybridization of capitalist models: coordinated economies experiment with equity portfolios, while liberal and peripheral states deploy accelerators and co-financing schemes, and Denmark combines accelerator programs with integrated procurement pathways, creating a distinctive governance model for scaling dual-use technologies. Such variation reflects how global power shifts and geoeconomic rivalry reconfigure national defense and innovation governance. The findings contribute to debates on mission-oriented policy and defense-industrial integration, showing that the future of European security depends not only on supranational frameworks but on the evolving bargains between states and business in shaping entrepreneurial strategies.