Last month European policymakers approved a proposal to establish a new research fund to support the development of novel defence technology. Between 2017 and 2020 up to €90 million in research grants will be awarded. The first calls for proposals are due to be launched by mid-2017. Companies with R+D operations in Europe are expected to be the primary grant beneficiaries.

The establishment of the fund, which is being referred to unofficially as the European Research Fund for Defence, signifies a move by the European policymakers to counteract the under investment of national governments in novel defence and security solutions. The fund’s conception has been championed by large European industrials such as Saab, the Airbus Group, BAE Systems, and Liebherr-Aerospace Lindenberg.

Final details, including the definition of research priorities, IPR ownership issues, and the rules for participation, are expected to be finalised and published before the end of 2016. The authority responsible for coordinating the fund’s implementation is the European Defence Agency; an EU body dedicated to strengthening Europe’s defence capabilities.

The European Research Defence fund is expected to serve as a litmus test and potentially pave the way for the introduction of a more comprehensive defence research programme to be launched after 2020 as part of Europe’s next horizontal research programme, Framework Programme 8. Early reports suggest European policymakers are considering earmarking up to €3.3 billion for defence research activities between 2021 and 2027.

New Opportunities for Businesses

The fund creates new opportunities for innovative technology companies developing solutions with defence applications. As of mid-2017, these companies will be able to secure lucrative grants to subsidise their R+D costs, hereby enabling the implementation of an expanded and expedited development programme. Beyond only subsidising costs, the fund will enable companies to partner with suppliers, end-users, and subject matter experts to deliver game-changing technology. Following the implementation of the fund, joint procurement could be set up for EU countries to collectively purchase expensive military equipment.

To secure grant funding, applicants will need to respond to a call for proposal targeting various priorities through a written project proposal. Unlike the rules governing participation in standard European R+D programmes, only organisations registered in EU Member States (and Norway) will be eligible for funding through this scheme. Furthermore, whereas funding for industry players is usually capped at 70% of project costs, the new fund is expected to support all industry project costs.

Recommendations to Applicants

Technology companies with developing solutions with defence applications are advised to closely monitor developments coming from the European Defence Agency regarding funding priorities with a view to developing and submitting a project proposal in mid-2017. Successful project applications will successfully argue that its proposed solution helps Europe meet its policy goals in the defence space; accordingly, participants are advised to stay abreast of key developments in this area so they may better equipped to convincingly explain the impact of their technology.