From prototypes to capabilities – enabling new defence actors to scale up
SEDE-PR-785352
Committee on Security and Defence · Rapporteur: Mārtiņš Staķis
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This is a draft report by Parliament's Committee on Security and Defence on helping new defence actors move from prototypes to production. It asks member states to act as first customers, set aside at least 10% of defence procurement spending for emerging technologies, and pool resources.¶¶¶ It calls on the Commission to assess and scale up the AGILE programme under the European Competitiveness Fund, revise procurement directives with higher thresholds and flexible procedures, and fund defence testing infrastructure in the next multiannual financial framework.¶¶¶ It seeks permanent mutual recognition of defence certifications through a test-once principle, recognition of NATO Innovation Badges, and opening of large companies' testing facilities to small firms.¶¶¶ It asks for protection of intellectual property for small innovators, mandatory subcontracting thresholds for innovative SMEs, and continued access for Ukrainian companies to EU defence instruments.¶¶¶
Committee position. The rapporteur proposes that Parliament call for member states to act as first customers for new defence actors, set innovation procurement targets and budgets, and for the Commission to scale up AGILE, revise procurement directives, fund testing infrastructure, protect intellectual property and keep Ukrainian companies involved.¶¶¶
Key points
- EU-funded research and demonstration can produce innovative defence products, but member states' armed forces must follow with timely procurement.¶
- Without follow-on contracts, innovative companies may fail or relocate; member states should create national innovation procurement mechanisms and aim for at least 10% of defence procurement spending on emerging technologies.¶
- Additional national requirements on top of EU rules create bottlenecks, and start-ups often lack manufacturing infrastructure; NATO's initiative to connect innovators with civilian firms with spare capacity is welcomed.¶¶
- Member states should act as first customers for domestic defence SMEs, use flexible contracts, and set innovation procurement budgets not tied to guaranteed outcomes, pooling resources for products that completed EU-funded programmes.¶¶
- The Commission should assess the AGILE programme early and scale up this contract-based model under the European Competitiveness Fund; member states should expand innovation units and the European Defence Agency should train ministry staff.¶¶
- The revision of the defence and general procurement directives should raise thresholds for innovation procurement and offer flexible procedures across all stages of defence and dual-use innovation.¶
- A critical growth-stage financing gap remains; the Commission should ensure EU equity instruments, the Scaleup Europe Fund and the Defence Equity Facility 2.0 cover defence-first companies, and member states should reframe defence investment as contributing to EU priorities.¶¶¶
- The defence component of the European Competitiveness Fund should link research to industrial deployment, and national, EU and NATO innovation programmes should be complementary; the EIB Group should expand lending across all member states, especially on the eastern flank.¶¶
- The Commission and the European Defence Agency should develop legally binding measures for a test-once principle, and willing member states should conclude agreements on mutual recognition of defence testing and certification results.¶¶
- Large defence companies receiving EU funding should open testing facilities to SMEs and start-ups; the Commission and the European Defence Agency should scale up experimentation campaigns and ensure each of the nine capability coalitions includes a testing and demonstration component open to start-ups and SMEs.¶¶
- The Commission should allocate dedicated funding under the next multiannual financial framework for defence testing and evaluation infrastructure, and protect small innovators' intellectual property rights in EU defence programmes.¶¶
- The Commission should expand incentives for prime contractors to work with start-ups, including mandatory subcontracting thresholds for innovative SMEs, and ensure future EU defence instruments expand access for Ukrainian companies and technology exchange.¶¶
Who is affected
- Member states: asked to provide first contracts, set innovation procurement budgets, pool resources, and recognise testing results.¶¶¶
- Defence start-ups, SMEs and new market entrants: would gain first contracts, testing access, financing and intellectual property protection.¶¶
- The Commission and the European Defence Agency: asked to assess AGILE, revise procurement rules, fund testing infrastructure and train ministry staff.¶¶¶
- Large defence companies receiving EU funding: asked to open testing facilities and accept subcontracting thresholds for innovative SMEs.¶¶
- Ukrainian companies: future EU defence instruments should continue to expand their access and technology exchange with EU firms.¶