European Defence Agency: Speech by High Representative/Vice-President Josep Borrell at the Annual Conference

07.12.2021
Brussels

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Good morning to everybody, here in the room and to the ones who are following the event through the networks.

Allow me to say a special welcome to the Minister of Defence of Belgium [Ludivine Dedonder], the Deputy Minister [of Defence] of Poland [Marcin Ociepa], who are here present, as well as to the Minister of Defence of Slovenia [Matej Tonin], who I am sure is following the meeting via video.

It is certainly a pleasure for me to address this European Defence Agency’s Annual Conference. I know that this event brings together a broad range of stakeholders – from the European Union institutions and Member States, to military and security organisations, academia, think tanks, industry and the media.

Dear friends and colleagues, we are living a moment where it is clear that power politics is back. Just have a look at the newspapers and you will see power politics coming. This requires that the European Union becomes a security provider and acts as such. Not just to be, but to act.

It will depend very much on our ability to innovate. Security today relies a lot on the capacity to innovate, because the world is no longer what used to be. Everyday there is innovation in the way the conflict is being performed. So, we, at the European Union level and Member States, have to innovate, because this will determine our position in the global stage in the years to come. This is true in general, in the industry is also true – it has always been true along history. But today, and in particular in the field of defence, it is particularly true.

That is why I am pleased that this defence innovation topic had been chosen as the theme of the year by the European Defence Agency Annual Conference.

Let us recognise that we, the European Union and the Member States, need to do much more together and we need to do much more together right now. We cannot wait, because the choice for us is simple: either we invest a lot on defence innovation, or we will become defence irrelevant. Yes, we will continue having armies and organising parades, but from the point of view of the practical implications on the game of power politics, we will become irrelevant.

Nothing new, in history innovation has been always a major stimulus to economic growth. Innovation cycles have accelerated and changed most of the economic areas and our everyday lives - just think about the impact of smartphones, phones and digital communication in a short period of time. I am not going to lecture you about how innovation cycles have changed economies and societies, but it is a fact that has to be kept very much in mind.

Technological innovation is now more than ever both an accelerator of economic competition and a consequence of it. Countries and companies strive to get ahead and it is a big incentive, it is the engine of growth and it plays a major strategic role.

It has always been like this. Technological and military innovations have always been decisive factors in international rivalries and conflicts. The history of the world is the history of the battle between the wall and the canyon, the shield and the sword. From the fortifications in 17th century Europe, to the naval rivalry between great powers on the eve of World War I; or the use of radars by the United Kingdom in 1940 or the nuclear revolution after 1945.

In the Gulf War, in 1991, the battlefield impact of Precision Guided Munitions showed how important they were. And in the last conflicts in the Caucasus, the drones. From microelectronics to computers, innovation has been following the development of the industry and the science.

But today, innovation is front and centre in our global strategy, because it will re-structure the international security environment.

The Strategic Compass, in which we have been working a lot and I hope that will be approved by next spring, recognises that the threats and challenges we face are multi-faceted and interconnected.

The escalating competition between the United States and China is now encompassing: military, economic and technological. We were in Washington, and the Secretary-General [of the European External Action Service, Stefano Sannino] was in Washington last week on a European Union – United States Dialogue on China and this was very clear. Those who gain a technological edge and set the standards will dominate the future.

This is also the case at military level, with emerging disruptive technologies – the famous EDTs -, such as Artificial Intelligence, often “dual-natured”, affecting both civilian and military domains. Such technologies have the potential to alter the character of warfare.

Great powers around the world are quickly developing and operationalising these emerging technologies for military purposes. The United States, for sure, and China and Russia also.

Yes, the existing technologies can also be adapted in innovative and malevolent ways: think of Improvised Explosive Devices, but also the use of social media or commercial drones by terrorists are part of the innovation on the security field.

To retain an edge over competitors and potential adversaries, we must use the potential of emerging technologies and develop high-end capabilities to equip our military forces across the full spectrum.

This brings me to a complex issue: the link between civilian innovation and defence innovation.

The defence sector has always been at the forefront of innovation; some of the inventions that have had tremendous civilian implications: naval technology in the past, the Internet or space-based navigation systems today, such as Galileo and the GPS, are good examples of that.

However, there are now fields like information technologies, where the civilian market is driving. It is not the military, it is the civilian who is driving both pure technological innovations - processors - and innovative uses - smartphones.

As a consequence, civilian and defence innovation are now increasingly associated or even blended with each other.Revisionist powers, but also non-state actors, do not accept restrictions on how they weaponise civilian technologies. It is finished the difference between one thing and another. Civilian technologies are becoming part of the warfare. Everything is being weaponised, and civilian technologies as well.

They rely on commercial innovations and civilian technology for their hybrid attacks – the cyber domain is obviously a good example.

Space is another one. Space is another telling example, as mostly civilian trends converge to transform what had remained until recently a mostly sovereign and non-commercial domain. Constellations of ‘CubeSats’ have huge commercial implications but can also be misused for hybrid and hard-to-detect aggressions.

With the rapid development of new technologies in the civilian sphere and their fast weaponsation, today, more than ever before, innovation is shaping the global balance of power.

Once again, we should therefore, as Europeans, leverage innovation for defence. It is our responsibility.

Let us start by having a look at where do we stand and provide some facts and figures.

Comparing the European Union and its Member States with other global actors, we see that we lag far behind in terms of investing in defence innovation. And this gap is widening.

The latest EDA data suggests that in 2020, the European Union Member States spent, roughly, €2.5 billion on research and technology. Only 1.2% of the total defence expenditure. It is really important to look at that: on innovation, we spent slightly more than 1% of our total defence expenditure, with a tendency to further decrease in the next two years - when the related PESCO commitment sets the bar at 2%. We have the commitment of reaching a certain level and we are half of it and not going up, but [it is] going down.

And the others? The United States Department of Defence invests at least $14 billion each year in research and innovation - 7 times more -, which means around 2% of the whole United States defence budget, including $3.5 billion for the Defense Advanced Research Projects Agency (DARPA). Because they have an agency just for advanced research projects. 7 times more and double in terms of percentage with respect to the total expenditure.

Another main actor on innovation is Israel. Israel spends 5% of its GDP on civilian and defence Research and Development combined. Certainly, Israel is a country facing [in] a systematic way, a permanent way, threats and challenges. But 5% of GDP in civilian and defence Research is an impressive effort.

And one last and most telling example, which also highlights the importance of “civilian” innovation: Google spends almost 10 times more on Research and Development than what European Union defence ministries spend together on Research and Technology. Google spends ten times more on Research and Development than all our defence forces and all our defence ministers spend in Research and Technology.

Taking all these trends together - increased strategic competition, growing economic impact of innovation, but also greater strategic importance of technologies and innovation - it seems obvious that we can no longer afford to sit on the side-line and look what is happening and what other are doing.

So, the European Union and its Member States need to do much more on defence innovation. And we have to do it together. Because to do it each one on their side, their small side - in some cases very small sides - it is not going to be profitable for anyone. Let me recall that while most Member States have increased their defence spending, they have not increased their investments in Research and Technology. Yes, we increase in the classical tools, implementing what we have, but not investing in what we do not have and what we need.

Let me repeat, our choice is a simple one: either we go much further and quicker on defence innovation, or we become defence irrelevant even if we keep our military structures in place.

So, if the need is there, how can we innovate more?

The question is, therefore: how can EDA, which I am chairing the Board, and the Chief-Executive [of the European Defence Agency, Jiří Šedivý] is here organising the meeting, how can the European Defence Agency and European Union institutions best serve Member States to address the innovation imperative?

You look at the Lisbon Treaty. You look at the amount of tasks that the Treaty allocates to the European Defence Agency, it is quite impressive. The Treaty – at least the people who wrote the Treaty and the ones who signed it – allocated to the European Defence Agency a lot of responsibilities and they put the accents in this inter-European body to take an important role on all aspects of defence and, in particular, on developing innovation.

It is clear that the fragmentation of innovative activities and of the industrial base plus the lack of dedicated funding are some of the difficulties we are facing.

In the Commission, and I am also Vice-President of the Commission, we have put in place initiatives that are relevant in this context. Because the funding is in the hands of the Commission. The European Defence Agency has a lot of work to do, but the funding lays in other institutions.

At the European Commission we have been using Horizon Europe, focusing on boosting innovation. The European Innovation Council initiative has a budget of €10.1 billion over seven years. Every time you give a figure, you have to give a temporary dimension - such amount of money for how long. €10 billion over seven years – when you say seven years, it looks less impressive.

The Action Plan on Synergies adopted earlier this year will encourage stakeholders from civil, defence and space industries to work more together.

And then we have the European Defence Fund that has up to 8% of its budget dedicated to emerging disruptive technologies. And I will not insist enough in the need of the European Defence Fund and the European Defence Agency to work closely, because the European Defence Fund has the financial resources, but the European Defence Agency has the knowledge about what it is needed to do, and what is most pressing, which are the duplications, and which are the loopholes in our defence structure. They have to work together in order to, both, address the resources to the most urgent needs.

All that is welcome and indispensable, but we will not be able to deliver on defence innovation without involving our European Defence Technological and Industrial Base.

At the same time, defence remains primarily an intergovernmental domain. The Commission is doing some things, but it does not have competencies in the strictly-speaking-defence. In the industrial dimension of defence, yes; but this is part of the industrial policy, [which] has different sectors and one of them is defence. But the hardcore of defence remains in the competence of the Member States. That is why the European Defence Agency is an inter-governmental institution and it has a crucial role to play in defence innovation.

We are not doing it from scratch. Technological innovation has been part of the Agency since its creation in 2004. That is quite a long time ago.

We have the European Defence Agency’s Coordinated Annual Review of Defence that not only analyses the state of play of the European defence landscape, but also proposes over 100 collaborative opportunities in capability development and Research and Technology.

Your work and our work on the prioritisation of the European Union capability development through CARD, its role in PESCO and the link to the European Defence Fund, makes the Agency a natural operator to facilitate European Union defence and innovation.

And it has already delivered. There are examples that include: projects on drone swarms, technologies for electromagnetic railgun, directed energy weapons, new clean energy technologies to lower the carbon footprint and decrease energy dependencies in the defence sector.

The European Defence Agency has also been looking into the establishment of a Defence Innovation Hub within the Agency. This is also one of the deliverables I have put forward in the context of the Strategic Compass.And then we have to create a network of defence innovation centres around Europe, this Defence Innovation Hub would promote synergies with the industrial sector; to foster an ecosystem of Research and Development in defence and get innovative solutions closer to the military user. I hope this Hub will soon be in place. I put a lot of importance in this Defence Innovation Hub as a dedicated tool to push innovation in a coordinated way among Member States. This is one of the ambitions in the Strategic Compass in terms of defence innovation - to promote our strategic interests, to reduce our technological vulnerabilities [as] we have many, and to be a capable and valued ally.

In conclusion, innovative technologies are not changing the parameters of the future battlefield. They are also becoming one of the decisive factors in the global balance of power. Both things go together.

Without investing more in Research & Technology and without integrating new technologies in defence systems, the European Union will not be able to build advanced forces at the cutting edge of technology. And it will lose both its strategic advantage over competitors and its interoperability with our partners. It is as important as this. If we do not invest more in research and technology, if we do not integrate new technologies in our defence systems, we will not be able to build advanced forces at the cutting edge of technology and we will lose strategic advance.

We must cooperate and jointly leverage innovation. We have a window of opportunity to accelerate European defence cooperation. And we have the tools in place. What we need is, as usual, political will and more resources. Nothing can be done without political will, where there is a will there is a way, but nothing can be done without more resources. And in European politics today still, investing more in the military field raises some reluctances in our societies.

That is why the Strategic Compass tries to create a common strategic culture, among not only governments, but also citizens, to provide the political orientations that can make our citizens understand how much needed this effort is needed in order to face the current world strategic environment.

I also want to stress that innovation in defence has to be anchored in Research and Technology investments, but also in capability development, concepts and doctrines across all European Union Member States. We need an integrated approach. Researchers, technological people, but also transforming this research in capability developments and incorporating it, framing it, inside our political doctrines on how to face our defence challenges. It is the important role of merging different aspects of innovation through the different actors of our very complex institutional setting in order to make everybody to work together. This is the work of the European Defence Agency.

I want to repeat and remind that the European Defence Agency must ensure that defence innovation is not just an ambition on paper, it has to become a reality. I hope this Annual Conference will help to make everybody, not only the attendants that, for sure, are more convinced from the beginning than others, about how important this issue is.Thank you very much for your attention. I wish you a good work.

Link to the video: https://audiovisual.ec.europa.eu/en/video/I-215350

Nabila Massrali
Spokesperson for Foreign Affairs and Security Policy
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Xavier Cifre Quatresols
Press Officer for Foreign Affairs and Security Policy
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