An industry that matters
Economically: Defence industries are major contributors to the European economy with a turnover of €100 billion/year and more than 360,000 highly skilled jobs. Moreover, they generate spin-off technologies which reinforce also the competitiveness of other sectors such as aviation, space and electronics.
Technologically: Defence industries constantly work at the cutting edge of technology and push the boundaries of what is possible. They also adapt civilian technologies to defence specificities and develop technologies that can be applied to commercial products.
Strategically: In order to assume greater responsibility for its security at home and abroad, Europe needs an appropriate level of strategic autonomy. This implies credible defence capabilities and an industrial base capable of developing the technologies which are critical for the freedom to decide and to act. The existence of an innovative and competitive European defence industry is therefore a precondition for a ‘Europe that protects’ its citizens, territory, interests and values.
A challenging environment
For many years, European defence has suffered from severe underinvestment. Over the last decade, defence budgets in the EU decreased by €2 billion per year to a historical low of 1.39% of GDP in 2015. Since then, the trend has been reversed in some Member States, but combined defence spending in Europe has remained low (1.40% of GDP in 2016 and estimated at 1.43% of GDP in 2017). Lack of investment has had devastating effects also on defence research and development, which are crucial for the future capabilities of European armed forces and the long-term competitiveness of European industry. At the same time, market fragmentation in Europe leads to costly duplication of capabilities and expenditures.
Given persisting budget constraints, the cost of complex defence systems, and the emergence of new breakthrough technologies (e.g. Artificial Intelligence, Quantum Computing), Member States will have to cooperate much more and much better than in the past if Europe does not want to depend completely on others for its security.
European defence initiatives
In this respect, there have been encouraging developments recently: in 2016, the High Representative presented the Global Strategy for Foreign and Security Policy and its Implementation Plan on Security and Defence. More recently, the European Commission adopted its Defence Action Plan, launched a Preparatory Action for Defence Research (PADR) and the European Defence Industrial Development Programme (EDIDP) and proposed a European Defence Fund (EDF) for the post-2020 period. In parallel, EU Member States revised the Capability Defence Planning (CDP) and launched the Permanent Structured Cooperation (PESCO) and the Coordinated Annual Review of Defence (CARD). Finally, the EU and NATO committed to strengthening their cooperation. Implemented properly, these initiatives can make a difference and contribute to a more secure Europe.
Defence in ASD
ASD fully supports these initiatives and accompanies them actively through its Defence Business Unit (DBU), which brings together some 25 high-level representatives of companies and national associations from across Europe. Supported by several expert groups, the DBU defines common industry positions and provides substantial input to EU policymakers and key stakeholders. The DBU is chaired by Mr. Kai Horten from ESG and vice-chaired by Mr. Angelo Pansini from Leonardo and Mr. Henrik Petersson from Saab.