In the past few years, international expansion into Central and Eastern Europe could be built on familiar inputs: labour cost, talent depth, market access, and proximity to Western Europe. That playbook still matters – but it is no longer sufficient. The war in Ukraine has made security an everyday economic variable, changing where capital flows, which hubs scale fastest, and how companies design footprints that can survive disruption.
The result is a regional reset. In some places, the shock has pulled investment westward, concentrating activity in countries seen as more “shielded” by alliances and institutional stability. In others, the same shock has acted as a forcing mechanism – accelerating reforms, modernising infrastructure, and pushing technology ecosystems toward faster, more resilient ways of building and scaling.
Investment is no longer just “CEE vs. Western Europe.” It’s “CEE with guardrails.”
A clear pattern has emerged in how companies and investors re-price risk. Rather than abandoning the region, many have repositioned inside it – choosing locations with stronger perceived security cover, clearer geopolitical alignment, and smoother administrative execution. In practical terms, that has meant more activity flowing to markets that can credibly offer all three:
- Stability and clarity in foreign policy alignment
- Operational readiness (infrastructure, permitting, bureaucracy that doesn’t stall scaling)
- Ecosystem density (talent, suppliers, partners, capital)
This is why certain hubs have strengthened their “default choice” status: they can absorb relocated teams, provide predictable rule-of-law execution, and connect quickly into EU commercial networks. At the same time, markets that project ambiguity – or look harder to underwrite in a more polarised environment – can see confidence soften even when their fundamentals remain attractive.
Security has become an innovation engine – especially for dual-use technology
The region is also seeing an acceleration in defence and dual-use innovation. What looks like a wartime necessity has created a broader economic legacy: entrepreneurs and engineering teams have translated battlefield constraints into product innovation – particularly in drones, communications, cyber defence, surveillance, and AI-enabled decision support.
This matters for internationalisation because it changes where “cutting-edge” sits. CEE is increasingly becoming a place where solutions are stress-tested under extreme conditions and then productised for wider markets. For corporates, that creates new opportunities to partner, acquire, and integrate innovation – especially in sectors where resilience, safety, and security requirements are becoming non-negotiable.
Alliance economics: defence spending spills into infrastructure, logistics, and cyber
Another second-order effect is that security commitments tend to pull infrastructure with them. When defence posture strengthens, it often brings upgrades in logistics corridors, digital infrastructure, and cyber capacity – investments that benefit the wider economy and improve the business case for regional hubs. Even when the initial rationale is strategic, the spillover can be commercial: better transport throughput, better connectivity, more resilient utilities, stronger public-sector capability.
For internationalisers, that changes the expansion lens from “which market is cheap?” to “which market is becoming system-ready?” – able to support scale without breaking under geopolitical stress.
The diaspora effect: talent moves, but networks remain
Displacement has also created a talent and entrepreneurship shockwave across neighbouring markets. Skilled Ukrainian professionals have strengthened local ecosystems, filled gaps, and helped build new ventures – while staying connected to home through remote work, cross-border teams, and dual-location operating models.
This is a quiet but important dynamic for growth leaders. A diaspora workforce doesn’t just add capacity; it creates bridges – new supplier relationships, new commercial routes, and new founder networks that can later support reconstruction-linked opportunities and cross-border delivery models.
What this means for companies expanding into CEE
The key shift is that “security” is no longer a risk paragraph at the end of the investment memo. It is now a design input across strategy, operating model, and governance. Companies that treat it that way tend to expand faster and with fewer surprises.
1) Build a security-adjusted entry strategy
Market attractiveness needs a second scorecard: not only demand and cost, but also continuity of operations under stress – logistics alternatives, cyber exposure, supplier concentration, and escalation paths for fast policy change.
A useful approach is to pressure-test three questions early:
- If cross-border movement slows, can we still serve customers?
- If energy or connectivity is disrupted, do we have redundancy?
- If regulation or sanctions tighten, can we re-route contracts and flows quickly?
2) Treat geopolitical alignment as an investability variable
In a more polarised environment, capital tends to favour jurisdictions that signal clarity – because clarity reduces scenario complexity. This doesn’t make any market “good” or “bad” in isolation; it means internationalisers should be explicit about what assumptions their footprint depends on, and where ambiguity could become a commercial drag (financing cost, customer trust, partner willingness).
3) Use the region’s defence-tech momentum – without becoming a defence company
You don’t need to be in defence to benefit from defence-driven innovation. The same capabilities show up in adjacent domains: cybersecurity, industrial safety, critical infrastructure protection, secure communications, AI monitoring, and resilient supply chain tooling.
Internationalisers can treat this as an ecosystem advantage:
- build partnerships with dual-use innovators,
- pilot solutions inside regulated environments,
- and strengthen resilience while improving productivity.
4) Plan for “two-speed” execution across CEE
Some markets will move quickly on reforms and administrative simplification; others will remain slower-moving. Winning expansions assume unevenness and design for it – phased rollouts, hub-and-spoke setups, and partner models that allow growth without overcommitting to one administrative pathway.
A pragmatic 90-day agenda for internationalisation leaders
If you’re expanding into CEE – or reshaping an existing footprint – this is the shortest path to a more resilient plan:
- Run a security-and-continuity diagnostic on your target markets (logistics routes, cyber posture, supplier concentration, policy volatility triggers).
- Identify a “resilience hub” that can absorb operations if disruption spikes elsewhere.
- Map the innovation adjacency: cyber, dual-use tech, monitoring, secure communications – where partnerships could accelerate both compliance and competitiveness.
- Rebuild the investment case with scenario-based economics (base case + two stress cases) so leadership decisions aren’t hostage to optimism.
- Set governance for speed: a cross-functional escalation path for regulatory or security shocks, tied to clear decision rights.
Bottom line
Ukraine’s war has reshaped CEE’s investment map – but it has also accelerated the region’s evolution into a place where resilience, security, and innovation increasingly reinforce each other. For internationalisers, the opportunity is real: CEE can be a platform for scalable European growth. The difference now is that success depends less on finding the lowest-cost location and more on building an operating model that can keep performing when the environment doesn’t cooperate.
