INDUSTRY REPORT
performance and capabilities , while offering optimised total cost of ownership .
The COVID-19 pandemic in early 2020 has had an unprecedented impact on the global economy and put tremendous pressure on government finances across most parts of the world . It has decimated commercial aviation and is also likely to have an impact on defence spending over the near term . However , said the report , strategic and long-term defence programmes are ‘ unlikely to be impacted by it across most parts of the world going forward ’.
In June 2020 , Frost & Sullivan ’ s ‘ Post-Pandemic Growth Opportunity Analysis of the Defence Industry ’ presented the impact of global spending on defence under three scenarios — gradual containment , severe pandemic and global emergency . As governments around the world allocated funds to contain the COVID-19 pandemic and reactivate the economy , under the severe pandemic scenario , defence spending could stagnate at current levels for the short term ( 2020-2021 ). In the global emergency scenario , defence spending could reduce , ‘ although this will mainly depend on global and regional political conditions ’ said the report . But , in the long term , the report projected that it would be cut by at least 10 %.
With the EU ’ s first-ever dedicated defence programme , European cooperation in defence will become the norm
European Defence Fund
The EU Commission kick-started the European Defence Fund ( the EU ' s first-ever dedicated defence programme ) in June 2021 with € 1.2- billion and awards for 26 new industrial cooperation projects worth more than € 158 million .
The Commission adopted a package of decisions supporting the competitiveness and innovation capacity of the EU defence industry . The adoption of the first European Defence Fund ( EDF ) annual work programme paves the way for the immediate launch of 23 calls for proposals for a total of € 1.2 billion of EU funding in support of collaborative defence research and development projects . Furthermore , under the EDF ' s precursor programme , the European Defence Industry Development Programme ( EDIDP ), 26 new projects with a budget of more than € 158 million were selected for funding . In addition , two major capability development projects received a directly awarded grant of € 137 million under the EDIDP .
Margrethe Vestager , Executive Vice-President for a Europe Fit for the Digital Age , said : “ The European Defence Fund now plays a key role in making defence industrial cooperation in Europe a permanent reality . This will foster the EU ' s competitiveness and contribute to achieving our technological ambitions . With significant participation of companies of all sizes and from across the EU , the Fund provides great opportunities to foster innovation and cutting-edge capabilities . 30 % of funding going to small and medium-sized enterprises is a very promising start .”
Thierry Breton , Commissioner for Internal Market , said : “ In 2021 , the European Defence Fund is coming to life . With the EU ' s first-ever dedicated defence programme , European cooperation in defence will become the norm . Public authorities will spend better together , and companies - big or small - from all Member States will benefit , resulting in more integrated European defence industrial value chains . In 2021 alone , the EDF will finance up to € 1.2 billion in high-end defence capability projects such as the next generation of aircraft fighters , tanks or ships , as well as critical defence technologies such as military cloud , AI , semiconductors , space , cyber or medical countermeasures .”
During the first year , the EDF will co-finance large-scale and complex projects for a total amount of € 1.2 billion . To finance this ambitious roll-out , the 2021 EDF budget of € 930 million has been complemented with a ‘ top-up ' of € 290 million from the 2022 EDF budget . This will kick-start large-scale and ambitious capability development projects while ensuring broad thematic coverage of other promising topics .
With the objective of reducing fragmentation of EU defence capabilities , enhancing the competitiveness of the EU defence industry and the interoperability of products and technologies , the 2021 EDF work programme will incentivise and support various capability development and standardisation projects .
In the first year , the EDF will allocate around € 700 million to the preparation of large-scale and complex defence platforms and systems such as next-generation fighter systems or ground vehicles fleet , digital and modular ships , and ballistic missile defence . Around € 100 million will be dedicated to critical technologies , which will enhance the performance and resilience of defence equipment such as artificial intelligence and cloud for military operations as well as semiconductors for infrared and radiofrequency components .
The EDF will also increase synergies with other civilian EU policies and programmes , notably in space ( around € 50 million ), medical response ( around € 70 million ), and digital and cyber ( around € 100 million ). This aims to foster cross-fertilisation , enable the entry of new players and reduce technological dependencies .
The Fund will spearhead innovation through more than € 120- million allocated to disruptive technologies and specific open calls for SMEs . It will foster game-changing innovations , notably in quantum technologies , additive manufacturing and over-the-horizon radar , and tap into promising SMEs and start-ups .
During the first year , the EDF will co-finance large-scale and complex projects for a total amount of € 1.2 billion
ISMR July / August 2021 | sheetmetalplus . com | 21