Redefining European Defence: The Synergy of R&D and Strategic Autonomy

In the rapidly transforming landscape of European defence, the combined forces of the European Defence Fund (EDF) and Permanent Structured Cooperation (PESCO) converge with the ambitious aspirations of the European Green Deal. In this article, Petar Murginski delves into the potential of the defence sector to pioneer sustainable innovation, fortify strategic autonomy, and redefine Europe’ future trajectory. Through an exploration of strategic green R&D investments, the incorporation of cutting-edge defence technologies, and a harmonized, cross-border approach to defence, a promising horizon for Europe emerges, portraying a vision of security, sustainability, and an evolutionary leap in defence capabilities.

Introduction

The benefits of defence R&D have infiltrated our society in ways we often take for granted. From the Global Positioning System (GPS) and the internet to satellite technology, these innovations are the products of strategic government investments in the defence sector. The concept of a “mission economy” as proposed by economist Mariana Mazzucato, encapsulates this phenomenon. It illustrates how the state acts as a growth enabler, significantly de-risking investments in novel technologies.

Within the European context, the European Defence Fund, with its dedicated €8 billion budget for 2021–2027, emerges as a critical financial instrument to enhance defence R&D. In this capacity, the government plays a pivotal role, not only in de-risking investment but also in shaping the future of technological advancements, and by extension, society at large. A key aspect of this is the European Defence Fund’s Work Program for 2023, which is set to allocate €1.2 billion for defence R&D through its annual calls for proposals. The submission deadline for these proposals is 22 November 2023.

Towards a Sustainable Defence Strategy

Europe stands at a crossroads where defence capabilities and environmental sustainability jointly delineate its future path. 2020 data from the European Defence Agency demonstrates that only 11% of EU defence budgets were allocated to joint projects, falling short of the 35% target. Similarly, a mere 6% was spent on defence research and technology in cooperation with other Member States, significantly below the 20% target. These figures highlight the inefficiencies, the under-utilization of technology, lost opportunities for economies of scale in procurement, and under-investment in R&D, stressing the urgent need for a strategic change. Moreover, given the urgent global need for sustainable technologies, there is a clear opportunity for these joint projects to include green R&D initiatives, which can contribute not only to Europe’s defence but also to its sustainability goals.

With the backdrop of the shifting geopolitical paradigm, Europe’s defence mechanisms are undergoing a significant transformation under the auspices of the EDF and PESCO. These initiatives aim to fortify Europe’s strategic autonomy in the defence sector. Simultaneously, the European Green Deal provides a broader sustainability framework to align with these initiatives. The convergence of these forces heralds a promising era of defence technology innovation that champions both Europe’s collective defence architecture and environmental sustainability.

Government Military Spending: Igniting Technological Breakthroughs

Government-backed military spending has often served as a pivotal catalyst for the development of new technologies, providing critical funding during the early and riskier stages of development. This strategic investment sparks innovation and signals confidence, attracting private investments and accelerating the pace of technological advancements.

Key examples of this dynamic include:

● Internet: The origins of the internet can be traced back to government-funded research projects, notably those initiated by the U.S. Department of Defense. The military’s need for robust communication and data sharing led to the creation of a decentralized network that later evolved into the internet as we know it, fundamentally transforming global connectivity and revolutionizing virtually every industry.

● GPS technology: Initially developed for military use with substantial government investment, the GPS has revolutionized navigation and positioning worldwide. It has enabled precise location tracking, robust navigation systems, and exact timing synchronization, impacting sectors such as transportation, logistics, agriculture, and emergency services.

● Jet Engines: Government investments in military aviation have propelled the development of advanced jet engines, resulting in faster, more efficient, and reliable aircraft. The technologies initially developed for military aircraft have often found their way into civilian aviation, revolutionizing air travel and contributing significantly to economic growth.

● Satellites: Military investments in satellite technology have paved the way for a wide array of applications, including communication, weather monitoring, navigation, and reconnaissance. These advancements have had far-reaching effects, enabling global telecommunications, weather forecasting, and precise geolocation services.

● Artificial Intelligence: Government support has been instrumental in driving advancements in AI technologies. Investment initiatives for AI research projects have contributed to breakthroughs in machine learning, natural language processing, and computer vision, enabling applications in multiple sectors.

Lessons from the USA and Israel: R&D as a Catalyst

The USA’s R&D strategy has been instrumental in establishing its technological supremacy. The Defence Advanced Research Projects Agency has guided innovations that have not only revolutionized defence but also reshaped the global economy, with inventions such as the internet and GPS.

Israel, fondly known as the “Startup Nation”, attributes its technological dominance to consistent and targeted investment in R&D. This commitment to innovation has led to remarkable advancements in fields like cyber security and artificial intelligence, while enhancing its defence capabilities.

Revitalizing Europe’s Defence Capabilities: Unpacking the EDF and PESCO

In the aftermath of World War II, the foundation of Europe’s prosperity was laid on forming key alliances and fostering cooperation across various domains, notably in defence and economic sectors. Initiatives such as the establishment of the European Coal and Steel Community were designed to share critical resources, enhance mutual interdependence among European nations, and drive economic integration.

The EDF and PESCO are modern embodiments of this drive for cooperation and independence. These initiatives aim to bolster Europe’s strategic autonomy by harmonizing the continent’s defence mechanisms, ensuring access to critical resources and capabilities, and minimizing reliance on external powers.

The EDF is central to this initiative, functioning as a pivotal source of financial  support, predominantly via grants, to collaborative defence R&D projects. It includes incentives designed to encourage participation of small and medium-sized enterprises and mid-cap companies in projects, including those under the ambit of PESCO. By focusing part of this funding and collaborative efforts on green R&D, the European defence sector could further its strategic autonomy while contributing to wider sustainability goals. To be eligible for funding, entities must be established in the EU, although certain conditions may permit exceptions.

The European Commission administers the program, establishing annual work programs in collaboration with Member States, the European Defence Agency, and the European External Action Service. These annual plans aim to encompass all military domains and vital technologies, aligning with the specific needs of Member States and targeting key future capabilities. Through these actions, the EDF is not only revitalizing Europe’s defence capabilities but is also playing a central role in redefining European defence and its strategic autonomy.

Integrating Green R&D into European Defence: A Novel Synergy

Drawing from the experiences of Israel and the USA, Europe stands on the brink of an unprecedented opportunity. By strategically directing EDF and PESCO funding towards green R&D, Europe can stimulate sustainable technological innovation within its defence sector.

Navigating this innovative landscape of defence and security cooperation calls for an integrated strategy that involves diverse stakeholders. Governments, private sector entities, research institutions, and consultancies each play crucial roles in this framework.

In an environment that is constantly evolving, expert guidance is essential to unlock the full potential of these initiatives and contribute to a secure and sustainable future for Europe, shaped by forward-thinking strategies.

Conclusion

At the center of this discourse lies the potential for defence R&D to drive green innovations, akin to technological breakthroughs seen in the USA and Israel. As Europe seeks to redefine its defence landscape, the strategic integration of green R&D into defence mechanisms, facilitated by investments in the EDF and PESCO, presents a powerful path towards strategic autonomy.

Drawing inspiration from tech pioneers like the USA and Israel, Europe’s future may well be marked by groundbreaking innovations borne out of its defence sector. The vision encompasses a future where Europe not only strengthens its defence capabilities but also fulfills its pledge to environmental sustainability. The narrative of a secure, resilient, and sustainable Europe is not merely a lofty aspiration – it is an attainable reality.

The Calls for Proposals under the European Defence Fund Work Program 2023 have been officially opened for submission on 22 June with a deadline for submission of 22 November 2023. Detailed information is now available on the EU Funding & Tenders Portal page dedicated to the EDF Program. For more insights and expert guidance, please contact Deloitte’s Gi3 unit in Bulgaria.

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