03 2019 direct funds on Between 4% and 8% of the EDF the EDF 8% of and Between 4% “disruptive, for earmarked been has that will boost high-risk innovation Europe’s long-term technological leadership and defence autonomy”. of set part is a broader of The EDF the advanced that have measures cooperation defence EU of course the illustrates and years in recent growing role of private defence industries within EU political processes. For the first time in its history, the theits first history, in time For directly is public vast EU investing military in technologies. funds will the EU Within move a decade from spending no the fourth becoming to defence in Europe, spender defence largest . and after the UK, PRIO POLICY BRIEF • • Brief Points • IES – VU Brussels and Carnegie Europe IES – Research (PRIO) Institute Oslo Peace Raluca Csernatoni Bruno Oliveira Martins The recently-launched European European The recently-launched a ground- is (EDF) Fund Defence of in the areas investment breaking the holds and security defence and challenge fundamentally to potential Union the European the of nature Proponents project. a peace as (EU) as the initiative frame the EDF of securitycrucial European in an age to and instability political increasing of change. As such, technological rapid a much-needed as framed is the EDF defence the scaling EU’s up for catalyst by conferring to a lagging overhauling and Europe, European Defence Technological and goals, these achieve To Industrial Base. optimise to the need stresses the EDF funding by money for value strategic cutting-edge innovation and research of the development fostering by and capabilities. defence interoperable important raises also the EDF However, questions about political EU’s priorities, security and and legitimacy, output defence governance. Key Issues and Controversies and Issues Key The European Defence Fund: Fund: Defence The European

Peace Research Institute Oslo (PRIO) www.prio.org ISBN: 978-82-7288-970-7 (print) PO Box 9229 Grønland, NO-0134 Oslo, Facebook: PRIO.org 978-82-7288-971-4 (online) Visiting Address: Hausmanns gate 3 Twitter: PRIOUpdates Introduction investigating the EDF along three axes of analy- including the ambitious OCEAN2020, a con- sis: strategy, industry, and legitimacy. sortium of 43 partners from 15 different coun- The ground for the European Defence Fund tries to develop maritime surveillance technol- (EDF) began to be prepared in May 2017, when The EDF: What’s in a Name? ogies. OCEAN2020 has a budget of more than the EU launched the Preparatory Action on De- 35 million and unites diverse entities such fence Research (PADR) for defence-related re- In practical terms, the EDF is a vast sum of fi- as the Ministries of Defence for , , search and technology development. The ac- nancial support that will not be used to buy , and , leading Euro- tion was notable because the funding came di- weapons, but rather to foster research and devel- pean industrial partners (Indra, Safran, Saab, rectly from the EU and not via a joint initiative opment for military innovation and new defence MBDA, PGZ/CTM, Hensoldt, Intracom-IDE, from the EU Member States. Proponents of the technologies. While the EDF’s exact amount is Fincantieri and QinetiQ) and several research PADR described this scheme as a concrete step not fully clear, there will be approximately 590 institutes, including Fraunhofer, TNO, CMRE to demonstrate the added-value of EU-support- million available for 2019-2020 and 13 bil- (NATO) and the IAI. ed defence research and innovation. The PADR lion euro for 2021-2027. The money will come was therefore understood and conceived as a pi- directly from the common EU budget, and will Disruptive Technologies lot project, launched to pave the way for the Eu- be combined with different national and multi- ropean Defence Industrial Development Pro- national sums dedicated to military technology. As mentioned above, the EDF allocates between gramme (EDIDP) under the EU budget for 4% and 8% to disruptive technologies. This con- 2019-2020, with an aim to boost Europe’s de- EU leaders frame the EDF as a key instrument cept was introduced by Clayton M. Christensen fence industrial competitiveness. for enabling improved technological innovation as part of what he called the innovator’s dilem- and collaboration in the European defence sec- ma. According to Christensen, new technology The EDF emerged from these actions as part tor. Commissioner Elżbieta Bieńkowska, who is can either be sustaining or disruptive. Where- of the EU’s next Multiannual Financial Frame- responsible for Internal Market, Industry, Entre- as sustaining technology is the gradual devel- work (2021-2027). In February 2019, the Euro- preneurship and SMEs, says the EDF is “yet an- opment of existing technology, disruptive tech- pean Commission (EC) presented the princi- other important building block to ensure that nology revolutionises its field of action, with all pled agreement on the EDF, framing the fund Europe becomes a stronger security provider for the potential gains and risks associated with it as a timely catalyst for cutting-edge defence re- its citizens… so that Europe benefits from cut- (Christensen 1997). search and innovation. The EDF’s substantial fi- ting-edge, interoperable defence technology and nancial envelope is set to scale up home-grown equipment in novel areas like artificial intelli- However, what qualifies as a “disruptive tech- European joint strategic defence projects, espe- gence, encrypted software, drone technology or nology” depends on time and context, and there cially with regard to disruptive technologies and satellite communication.” (European Commis- is still some uncertainty about what counts as streamlining defence spending. The document sion 2019a). a disruptive technology in this context. In its was then approved by the press release from February 2019, the EC talks in April 2019 and is expected to be formally ap- One prerequisite of the EDF calls for a mini- about “disruptive, high-risk innovation that will proved by the Council in the next months. Yet, mum of three Member States to be involved in a boost Europe’s long-term technological leader- the new European Parliament that will emerge project. Many proponents suggest requirements ship and defence autonomy” (European Com- out of the upcoming European elections of May like these will generate economies of scale and mission 2019a). In its April 2019 call for pro- 2019 will be involved in resolving some pend- create incentives for projects with cross-border posals, the EC, rather than providing specif- ing financial issues. Crucially, the EDF makes participation of many SMEs. The EDF builds ic guidelines, invites applications for “[i]nnova- the EU the fourth largest defence investor in Eu- upon the PADR, which has already channelled tive defence products, solutions, materials and rope, following the UK, France, and Germany. more than 40 million euro for different projects, technologies, including those that can create a

These initiatives are linked by a common de- Artificial intelligence and cognitive computing in Robotics in defence sire to develop a robust and competitive Europe- defence an Defence Technological and Industrial Base (EDTIB) and to safeguard Europe’s technolog- Defence internet of things Autonomous defence systems, weapons, and ical power in the long-run (Csernatoni 2019). decision-making While these developments take place in an ev- er-changing geopolitical environment, they Big data analytics for defence Future advanced materials for defence also raise concerns regarding political legitima- applications cy and transparency. This policy brief outlines Blockchain technology in defence Additive manufacturing in defence the contours of the EDF and highlights its dis- tinctive qualities as a supranational EU collab- orative defence research and technology instru- Artificial Intelligence-enabled cyber defence Next generation sequencing (NGS) for biological ment. Then we explore the EDF’s role in boost- threat preparedness ing the EU’s technological leadership in emerg- Table 1: 10 Key Disruptive Defence Innovations. Source: (EDA), 2017. ing and disruptive technologies. We conclude by

PRIO POLICY BRIEF 03 2019 www.prio.org disruptive effect and improve readiness, deploy- ability, reliability, safety and sustainability of Union forces in all spectrum of tasks and mis- sions, for example in terms of operations, equip- ment, infrastructure, basing, energy solutions, new surveillance systems” (European Commis- sion 2019b: 12). The call then enumerates 34 ex- amples of what falls in that description, includ- ing, among others, Mine Counter Measures (MCM) capabilities operating autonomous un- derwater systems; portable bacteriological and chemical future detection systems; end-to-end solutions for artificial intelligence in defence and security key strategic issues; nanomodified composite materials and related production pro- cesses and design procedures for reinforcement of existing armours of defence vehicles; and de- velopment of counter-UAS capability based on mini-UAS swarms. Whereas some of the 34 ex- amples are disruptive technologies, others do not seem to be.

Further clues as to what the EU means by dis- KOELN and whaler. Photo: European External Action Service / CC BY-NC-ND @ Flickr ruptive defence technologies may be found in documents from the European Defence Agency base, by developing key technologies in criti- have increasingly come under pressure to pro- (EDA). In a 2017 issue of the EDA’s journal – Eu- cal areas, and to contribute to the EU’s strategic duce competitive defence capabilities. The main- ropean Defence Matters – the EDA analyses what autonomy by making defence cooperation un- tenance of a strong European Defence Tech- it considers the current ten most key disruptive der the EU budget a reality. While ‘strategic au- nological and Industrial Base (EDTIB) was set defence innovations. Each of these innovations tonomy’ has become a popular term in EU and out to become a top priority for the EDF by im- is then briefly addressed by an EDA project offi- Member States high-level circles, there is no de- proving defence capabilities, by streamlining cer showing how they matter, how the EDA en- finitive consensus over the meaning behind this the military expenditure of Member States, and gages with them, and how these technologies catch-all concept. by focusing on the development of competitive will be used in the future (see Table 1). high-end technologies. However, concerns re- This ambiguity has prompted mixed reac- main regarding the increased cooperation be- The result of the first rounds of funding to dis- tions towards the EDF. Some see the fund as tween the Commission and major defence in- ruptive technology projects will show whether or a clear indication that political will has finally dustries and weapons manufacturers. not this list constitutes a guiding matrix of how crystalised across Member States about collec- the EU understands disruptive technologies in tive European defence as a community compe- Powerful industry-driven lobbying has also the field of defence. In other words, future appli- tence. Others take a more modest view, suggest- played a significant role in shaping priorities in cants and well as external analysts will gain in- ing the EDF only signifies technological and in- defence R&D and R&T, raising important ques- sight about EU’s priorities on disruptive defence dustrial autonomy. Given that the EC will man- tions about the corporate capture of EU military technologies by virtue of the projects that re- age the EDF, governance concerns have risen initiatives by a nascent European Military Indus- ceive funding. around tensions between national and suprana- trial Complex (EMIC) (see Martins & Küsters tional logics. 2019 and Mawdsley 2018 for a broader analysis). Strategic Considerations The work of civil society organisations such as Perhaps most important is what the EDF repre- Statewatch (Jones 2017) and the European Net- Since the formation of the ‘Juncker Commis- sents for the EC: the rising agenda-setting pow- work Against Arms Trade (2019) has shown that sion’ back in 2014, defence matters have played er of the EC in the area of defence and its excep- key industry advisors to the EU are among the an increasingly central role on the EU’s overall tional emergence as a political actor in the field largest beneficiaries of the defence policies they political agenda. The EDF is expected not only to of defence overall. advocate for, illustrating a troubling conflict of bolster more lucrative joint investment schemes interests. in defence research and innovation, but also to The Industry Component boost and safeguard the EU’s leadership posi- Member states with strong national defence in- tion in this sector. In this regard, the EDF sym- Due to budgetary restrictions and intensify- dustries and the means to co-finance costly proj- bolises an unprecedented step taken both to ing market forces, National Defence Technolog- ects are also expected to be the main beneficia- safeguard the EU’s technological and industrial ical and Industrial Bases (DTIBs) across Europe ries of the EDF. For this reason, more thought www.prio.org PRIO POLICY BRIEF 03 2019 should be given to whether a growing EMIC defence industry’s interests over EU transpar- (2019b) ‘News: European would be a legitimate source for transformative ency rules. As co-legislator of the EDF, the Eu- Defence Fund on track with €525 million for Eu- policy practices to change European defence re- ropean Parliament can provide scrutiny during rodrone and other joint research and industrial search and innovation culture, potentially en- the Fund’s evaluation processes, but in practice projects’. Available at: gendering a paradigmatic shift in the EU’s iden- it will not have a say on which projects to fund ec.europa.eu/commission/news/european-de- tity as a peace project. Created in the 1950s with (see Fiott 2019 for different scenarios of parlia- fence-fund-2019-mar-19_en. a political vision of making a new war high- mentary scrutiny). European Defence Agency (2017) ‘Ten Upcom- ly unlikely in Europe, the ing Disruptive Defence Innovations’, European De- project spread liberal values within the conti- Additional concerns centre around the possibil- fence Matters, 14. Available at: nent and attracted a large number of countries ity that EU public funds could be used to devel- www.eda.europa.eu/webzine/issue14/cover-story/ to its sphere of influence, where the threat of of- op technology for problematic weapons. Where- disruptive-defence-innovations-ahead. fensive military action was off the table. The as the Fund prohibits the development of le- dramatic increase in, and prioritisation of, de- thal autonomous weapons and weapons sys- European Network Against Arms Trade (2019) fence expenditure in the EU opens up new ques- tems declared illegal by international law (e.g., What is the European Defence Fund? Available at: tions about whether we are witnessing a fun- land mines and nuclear, chemical, and biologi- enaat.org/wp-content/uploads/2019/04/ENAAT- damental change in the political nature of the cal weapons), critics fear the frameworks of in- DefenceFund-Flyer_long-EN.pdf. Union. ternational law may not be sufficient to cover all Fiott, Daniel (2019) The Scrutiny of the European the possible scenarios opened up by emerging Defence Fund by the European Parliament and na- Problems of Transparency, Legitimacy, disruptive technologies. Finally, it is reasonable tional parliaments. Brussels: DG for External Poli- and Prioritisation to wonder if the 13 billion euro reserved for mil- cies of the Union, European Parliament. itary technologies could be used more fruitful- The EC supports funding defence R&D through ly in other areas, including on policies that ad- Jones, Chris (2017) Market forces: the develop- the EDF for four key reasons: 1) to mitigate the dress international instability before it escalates ment of the EU security-industrial complex. London: EU’s dependence on NATO and US assets; 2) to to war or conflict. Statewatch and Transnational Institute. reduce the duplication of efforts in defence mat- Martins, Bruno Oliveira and Küsters, Chris- ters throughout the EU; 3) to address the severe Further Reading tian (2019) ‘Hidden Security: EU Public Re- lack of interoperability between weapons sys- search Funds and the Development of European tems; and 4) to preserve Europe’s leadership in Christensen, Clayton (1997) The Innovator’s Di- Drones’. Journal of Common Market Studies, 57(2): cutting-edge technologies beyond the realm of lemma: When New Technologies Cause Great Firms 278 –297. defence. to Fail. Cambridge, MA: Harvard Business Re- view Press. Mawdsley, Jocelyn (2018) ‘The Emergence of These arguments, perhaps not surprisingly, the European Defence Research Programme’, have raised significant concerns about trans- Csernatoni, Raluca (2019) ‘The EU’s Techno- in Nikolaos Karampekios, Iraklis Oikonomou parency and oversight. There have been ma- logical Power: Harnessing Future and Emerging and Elias G. Carayannis (eds.) The Emergence of jor points of contention between the European Technologies for European Security’, in Cornelia- EU Defense Research Policy. Cham, : Parliament and the Member States concerning Adriana Baciu and John Doyle (eds.) Peace, Secu- Springer, 205–217. the EDF’s objectives, the eligibility criteria for rity and Defence Cooperation in Post- Europe. the projects, and the overall management of the Cham, Switzerland: Springer, 119–140. fund. While agreements have been reached on European Commission (2019a) ‘EU budget for most issues, there has been little explanation as 2021–2027: Commission welcomes provision- to where the money will come from, how it will al agreement on the future European Defence be spent, what will be cut in order to finance Fund’. Press release, 20 February. Available at: the Fund, and what checks and balances will be europa.eu/rapid/press-release_IP-19-1269_ put in place to avoid the risk of prioritising the en.htm.

THE AUTHORS THE PROJECT PRIO Raluca Csernatoni is a Guest Professor at The Transnational Academic Network for the The Peace Research Institute Oslo (PRIO) is a the Institute for European Studies (IES) of Study of Armed Drones (TRANSAD) works non-profit peace research institute (estab- Vrije Universiteit Brussel (VUB) and a Visiting towards identifying key technological, theo- lished in 1959) whose overarching purpose Researcher at Carnegie Europe. retical, and policy developments regarding is to conduct research on the conditions for Bruno Oliveira Martins is Senior Researcher security and defence technologies, in particu- peaceful relations between states, groups and at PRIO, where he coordinates the Security lar armed drones, with a look into how these people. The institute is independent, interna- Research Group. technologies impact war and conflict. tional and interdisciplinary, and explores is- sues related to all facets of peace and conflict.

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