Czech Business Today

The European Union is placing greater emphasis on defence and security, reflected in the establishment of the first-ever Commissioner for Defence and Space. This signals the EU’s commitment to strengthening its defence capabilities, with the European Defence Fund (EDF) and the European Defence Industry Strategy (EDIS) playing a central role. For Czech businesses, this evolving landscape presents significant opportunities to engage in joint defence projects, access EU funding, and enhance their competitiveness in the global market.

The EDF is designed to foster cooperation among EU member states in defence research and capability development. With a budget exceeding €8 billion for 2021-2027, it provides funding for projects related to advanced defence technologies, including cybersecurity, artificial intelligence, and next-generation weapon systems. Czech companies, particularly SMEs, can benefit from EDF financing by participating in multinational consortia and leveraging the fund’s co-financing mechanism. One of the key challenges for Czech firms is navigating the complex application process for EDF funding. However, by collaborating with established EU defence contractors and research institutions, Czech businesses can strengthen their position in the European defence ecosystem. Additionally, public-private partnerships can be instrumental in bridging gaps between research, development, and commercialization of defence technologies.

The European Commission has outlined several defence priorities, including enhancing military mobility by removing remaining barriers within the EU, creating a unified market for defence products and services with a particular focus on increasing SME involvement in supply chains, and overseeing the implementation of the European Defence Industry Strategy (EDIS) while reinforcing the EDF. For the Czech Republic, these priorities align well with the capabilities of its domestic defence industry. Czech arms manufacturers already contribute to NATO and EU defence initiatives. Increased EU investment in defence can further bolster Czech industrial participation in high-value projects, including those related to precision engineering, unmanned systems, and military logistics.

A crucial aspect of the EDF and the EU’s defence strategy is the promotion of dual-use technologies—innovations that serve both military and civilian purposes. Czech companies specializing in cybersecurity, artificial intelligence, and aerospace engineering can capitalize on these opportunities by developing solutions applicable to both security and commercial markets. For instance, advancements in cybersecurity for military communications can also strengthen the security of critical infrastructure in the civilian sector. Similarly, AI-driven logistics solutions can enhance both battlefield operations and commercial supply chains.

To fully capitalize on these opportunities, the Czech Republic must address several challenges. By investing in research and development, Czech firms can position themselves at the intersection of defence and commercial innovation. Simplifying access to EU funding and streamlining administrative procedures can facilitate SME participation in defence projects. Czech industry can play a vital role in shaping the future of European defence. As the EU continues to invest in its security framework, Czech businesses have a unique opportunity to integrate into the European defence supply chain, enhance technological innovation, and contribute to the continent’s overall security strategy.

Source: European Parliament, European Council