EPP SME Defence kick-off: SME-oriented Defence Policy
On Wednesday October 11th, EPP SME Defence and SME Europe of the EPP organized an event on political discussion titled “EPP SME Defence kick-off: SME-oriented Defence Policy” in the European Parliament, hosted by Riho TERRAS, MEP, Chairman of EPP SME Defence initiative and Member of the ITRE Committee.
The EPP SME Defence has been established to formulate political demands and instructions for action. The esteemed members include Ivan Stefanec MEP, Sara Skyttedal MEP, Tom Vandenkendelaere MEP, Henna Virkkunen MEP, Arnaud Danjean MEP, Lukas Mandl MEP.
The panel saw the participation of Timo PESONEN, Director-General for Defence Industry and Space; European Commission; Markus BECKER; Director Business Development for IBV Holding GmbH, Chair of SME Connect Defence Working Group; Sara SKYTTEDAL, MEP; Henna VIRKKUNEN, MEP; Ivan LEGRADY, Head of Office to MEP Ivan Štefanec; Michael DUSCHANEK, APA to MEP Lukas Mandl; Peter GIJSELS, APA to MEP Tom Vandenkendelaere. The discussion was moderated by Horst HEITZ, Executive Director of SME Europe of the EPP.
The event saw the participation of honourable guests: John Del Ben, CEO of Tenexium; Wilfried Michael Grüdl, CEO of IBV Holding GmbH; Robert Haimerl, Legal and Organization at Bowas-Induplan Chemie Ges.m.b.H; Hannes Hecher, Managing Director, CEO of Schiebel Elektronische Geraete GmbH; Emily Howell, EU Defence Sales Manager at BCB International; Mikael Karlsson, CEO of MW Group; SME on the Swedish Security and Defence Industry Association; Paul Kruis, Policy Officer at European Commission; Stefan Skultety, President of the Board and CEO of the DMD Group; Taavi Veskimägi, Chairman of the Council; Estonian Defence and Aerospace Industry Association.
Riho TERRAS MEP focused on establishing the SME Defence initiative to support SMEs in the defence and security sector. Terras emphasized the urgent need to address global security challenges and strengthen defence capabilities in Europe. He highlighted that 40% of European defence projects involve SMEs but they face challenges like regulations and funding.
Timo PESONEN, Director-General for Defence Industry and Space, discussed the European Defence Fund role in increasing competitiveness and addressing fragmentation. He emphasized the fund’s two main pillars: research and development and capability and production. SMEs play a crucial role with special provisions to encourage their participation.
From the industry side, Markus BECKER, from IBV Holding, said that it is important to have direct communication with end-users in the defence industry to understand their specific needs and he also introduced the SME Connect Defence Working Group, focusing on collaboration and knowledge sharing.
Sara SKYTTEDAL MEP, stressed the importance of prioritizing security and defence in the EU, especially in the face of evolving threats like cyber warfare. She recognized that SMEs in the defence sector face similar challenges to SMEs in other areas, including bureaucratic hurdles, burdensome regulations, legal barriers and higher taxes. However, she emphasized that there are specific aspects unique to SMEs in this sector, particularly in terms of trade and access to financing.
Henna VIRKKUNEN MEP, highlighted the economic benefits of increasing SME participation in cross-border activities. She emphasized the need for investment in research, development and innovation in the defence industry. She highlighted the role of Member States in organizing activities that bring together important SMEs in the defence sector and facilitating their participation in European projects.
Taavi VESKIMÄGI, from Estonian Defence and Aerospace Industry Association, highlighted the growth of defence industry companies in Estonia, particularly startups. He addressed concerns about access to capital, time to market and market fragmentation.
Managing Director and CEO of Schiebel, Hannes HECHER, emphasized the importance of SMEs having a voice and access to resources. He acknowledged the challenges of SMEs when dealing with larger corporations and raised concerns about the time to market and questioned whether certain funding projects would lead to viable markets in the long run. He stressed the need for funding to be directed towards sustainable and profitable ventures.
Mikael KARLSSON, CEO of MW Group and representative of Swedish Security and Defence Industry Association, emphasized the need for political leadership to bridge the gap in defence financing.
Ivan LEGRADY, Head of Office to MEP Ivan Štefanec, sought insights on the role of SMEs in the European Defence Industrial strategy and the upcoming EDIP regulation (European Fefence Investment Programme).
Furthermore, Robert HAIMERL highlighted concerns about bureaucracy and compliance, particularly for SMEs.
From the European Commission, Paul KRUIS, outlined initiatives to support SMEs in the defence industry, including spin-in calls and multi-stage project proposals.
Timo PESONEN encouraged SMEs to use their political influence to advocate for more active involvement of their governments and national investment banks in supporting defence projects.
Riho TERRAS MEP concluded with the need to alter the political narrative surrounding defence investment, stressing the importance of agility in bringing defence technologies to market. He pointed out that military technologies should not lag behind consumer electronics in terms of upgrades. He raised the question of SME collaboration with third countries and the need for an effective networking platform and expressed a commitment to continued advocacy for SMEs in defence. He expressed the interest from companies in the civil sector looking to transition into the military sector and the need for guidance on how to navigate the transition effectively – in terms of financing and partnerships with banks. Lastly, Mr Terras highlighted key topics that need attention, which will be part of the EPP SME Defence position paper.