Challenging the defence sector with innovation opportunities

Recent geopolitical transformations are playing a key role to foster the attention given by the European Union to defence policy and related operative instruments. Indeed, the growing interest in the Common Security and Defence Policy mirrors’ emerging trends at global level, such as the Russian aggression to Ukraine, South-East Asia Countries’ growing military capacity, as well as new threats from non-institutional actors emerging both in the physical and virtual battleground. The launch of the Permanent Structured Cooperation (PESCO) in 2017 as well as the establishment of the European Defence Fund (EDF) in 2021 are relevant manifestations of this tension towards closer collaborations among EU Member States also in the defence domain.

Preparatory programs: PADR and EDIDP

Although officially launched in 2021, the EDF was anticipated by two precursor programmes, namely the European Commission’s Preparatory Action on Defence Research (PADR – 2017-2019, approximately €90 Mln/EUR) focused on research dimension, and the European Defence Industrial Development Programme (EDIDP – 2019-2020, approximately €500 Mln), more oriented towards capabilities.

Along their implementation, both programmes allowed to experiment structures, approaches and tools to support both cutting-edge high-risk/high-reward research projects, strategic technologies and demonstrator, and development of defence products and cross-border cooperation.

Following the PADR and EDIPD experience, the EDF was established with a clear orientation to foster competitiveness, efficiency and innovation capacity of the defence sector from both a research and industrial perspective.

What is the European Defence Fund?

The EDF is the new programme launched within the Multiannual Financial Framework 2021-2027 to promote the competitiveness of EU in the defence sector by leveraging collaborative efforts and cross-border cooperation for the realization of research- or development-oriented defence project. Indeed, EDF’s projects are expected to contribute both to respond to emerging defence challenges and, in parallel, to foster the agility and innovation of the related supply and value chains.

To do so, the EDF will not only promote the realization of original collaborative projects capable of addressing specific challenges, but also encourage cross-fertilisation with civilian innovations in relation to digital technologies, artificial intelligence and cybersecurity. For the period 2021-2027, a total budget of close to €8 billion is allocated to the European Defence Fund, of which respectively €2.7 billion for collaborative defence research and €5.3 billion euros to fund collaborative capability development projects.

Baseline functioning and rules

Within the EDF framework, whose calls are released via annual work programmes, two class of projects are in target, namely collaborative research projects (research action) and collaborative development of defence products and technologies (development action).

With an exception for funding projects on disruptive technologies, only collaborative projects, involving at least three eligible entities from at least three Member States or associated countries (i.e. Norway) may receive funding. Within each topic, the call defines the type of activities (study, prototyping, design, development, testing, qualification) that are expected to be implemented, each of which has a different funding rate depending on the development maturity they correspond to. Hence, depending on the configuration of the work to be implemented, the project can have a baseline funding ranging from 20% up to 100%. In case of funding rates below 100%, additional bonuses would be applicable, depending on the involvement of SMEs or the fact of the project being developed in the context of a PESCO project.

Results from EDF21 call

The first EDF work programme (closed in December, 2021) will be organised around 23 calls (11 calls targeting research actions and 12 calls targeting development actions), addressing 15 categories consisting of 37 topics. The 2021 EDF call for proposal received over 140 proposals, and allocated a total of €1.2 Bln on 61 high-quality projects (respectively €845 Mln for collaborative capability development projects and €322 Mln for emerging and future challenges and threats).

The highest total allocation by category resulted to be Air combat (€189,8 Mln), Ground combat (€154 Mln) and Naval Combat (€103,5 Mln). Noteworthy, breaking down the results per category, the average funding per project remains higher in the above mentioned categories, but it is possible to better appreciate the different opportunities of each category (e.g. highest number of small projects funded under the Defence innovation category).

EDF2022 areas covered

The 2022 EDF work programme identifies 16 Thematic categories of action: Defence medical response, Chemical Biological Radiological Nuclear (CBRN), biotech and human factors, Information superiority, Advanced passive and active sensors, Cyber, Space, Digital transformation, Energy resilience and environmental transition, Materials and components, Air combat, Air and missile defence, Ground combat, Force protection and mobility, Naval combat, Underwater warfare, Simulation and training and Disruptive technologies.

The total allocation for EDF 2022, corresponding to €924 Mln, will thus allow to create real defence innovation leveraging on promising technologies such as multifunctional textiles, image recognition, diagnostic tools and much more.

Do you have a disruptive idea with application in the defence sector? At Zabala Innovation we can help you to assess the opportunities available within the European Defence Fund and beyond, co-create with you collaborative project ideas, identify key partners at European level and guide you in understanding how to apply to access such opportunities.