Europe’s need to invest in defence research and innovation

NATO’s summit in Wales last year responded to Russia’s actions in the east by re-affirming the importance of defence spending. The British government followed-up on commitments made in Wales by effectively ring-fencing the defence budget and promising to continue to honour NATO’s pledge to spend at least 2% of gross domestic product on defence. France will spend €4bn more on defence up until 2020. The Baltic States are moving closer to the NATO pledge, along with Poland which aims to spend up to 18% more on defence. Yet beyond that headline commitment, NATO members made another pledge in Wales – to commit to spending at least 20% of their defence budgets on new equipment, and Research & Development (R&D).

There was a clear logic behind this call. Despite some marginal increases, European governments are still committing the bare minimum on defence investment in R&D and R&T (Research & Technology).

To give some idea of the scale of European under-investment consider that the European Defence Agency’s 27 participating member states spent €37.5bn on R&D/R&T in 2013, while the U.S. Department of Defense’s  R&D budget in the same year was approximately €102bn. While comparisons with Washington may be unfair, and despite the fact that European firms are developing world-beating defence technologies, Europe is lagging behind its most critical NATO partner when it comes to R&D/R&T spending.

Europe cannot afford to remain barren on defence R&D and it cannot rely on investments made decades ago. The defence investment seedbed needs constant watering. Without ambitious levels of R&D investment not only will Europe’s defence technological and industrial base eventually erode, but Europeans will not be taken seriously in Washington, nor will they be able to attain any degree of strategic autonomy through the EU.

Investment in defence innovation does not just serve economic and military objectives. It is also keeps NATO fertile and effective. With the U.S. “rebalance” to the Asia-Pacific region, Europeans can ill-afford to let Washington pick up the defence bill in Europe in the way it has done in the past.

It is no secret that there is a technology gap at the heart of NATO. If the U.S. is to retain any interest in European security, Europeans will need to spend more time and money on closing the technology gap. Defence innovation can be a way for Europe can boost its political standing within the transatlantic alliance.

The stakes involved in the global defence innovation race could not be higher. Asia is emerging as a central science and technology hub in the global economy. According to the World Bank, East Asian and Pacific countries spent almost as much as Europe on civilian and military R&D as a share of GDP in 2014.

Combined with the recently signed Trans-Pacific Partnership (TPP), the U.S. is in a stronger position than Europe to benefit from the new technologies being developed in the East. Asia is critical because the U.S. economic and military ‘rebalance’ to this region raises questions about Washington’s long-term capacity for, and desire to, invest in Europe’s security.

Europeans need to give the U.S. a reason to keep on investing in NATO. This is critical given Washington’s steps to undertake a so-called ‘third offset strategy,’ which could see the U.S. overcome the global proliferation of precision-strike capabilities through the use of new technologies such as lasers, autonomous robots and unmanned swarms. The U.S. wants to be more powerful than its adversaries, but, as a result, it may open-up an even bigger technology gap in NATO.

Such structural concerns mean Europe needs to move quickly on defence innovation. While the main responsibility for investing in defence rests with European states, it is encouraging to see the EU launch its own specific initiative – known in Brussels-speak as a “Preparatory Action” – that could see EU funds spent on defence-specific R&D programmes in the future.

This will certainly not be enough to meet the challenge of Asia or the Third Offset Strategy in the short term. The initiative will necessarily be modest in scope and funding. However it does perhaps signal a mentality shift in Brussels away from the overriding desire to talk-up the ‘dual-use’ benefits derived from EU funding – which invariably highlights civilian advantages to the detriment of defence R&D – to one that is centred solely on defence.

While there is no substitute for national investments in defence R&D as demanded by the Wales summit, the Preparatory Action may just reflect a recognition of the important role defence innovation must play in Europe. For the EU that is unique, but whether such an initiative can help bolster Europe’s position in NATO remains to be seen.