SMEs in the Baltics scored well in first round of the European Defence Fund awards

SMEs in the Baltic member states performed well in the €1.2 billion first round of European Defence Fund (EDF) awards announced in July this year and are taking part in 19 of a total of 61 projects.

The winning projects in the first round of funding revolve around emerging and disruptive technologies, such as artificial intelligence and 5G wireless communication network and established technologies including lasers, cyber, and radar.

Some SMEs link the success in being involved in 30% of funded projects to the strong focus Baltic countries put on defence and security due to their past as part of the USSR, and their proximity to the Ukrainian border.

"After all these cultural memories of repression […] we needed to do something for the general safety," said Laurynas Šatas, CEO of Aktyvus Photonics, a Lithuanian SME specializing in solid-state lasers.

That is echoed by Tomas Žalandauskas, manager of the Baltic Institute of Advanced Technology (BPTI) in Lithuania. "I still remember the Soviet Union and the path to independence, and I understand that it is necessary to be strong also militarily," he said.

The pressure intensified in 2014, when Russia occupied Crimea and started the war in Donbas. That event triggered a change of mindset. Since then, said Šatas, companies have been interacting with defence ministries and thinking about how to support security.

"We have very strong technology, very strong engineers, so we can [...] generate high value not only in Lithuania but for [all of] NATO,” Šatas said.

The EDF was set up in 2021 to enhance cooperation in the defence industry across the EU. One way in which it does this is to require each project to involve partners from three countries. The winners in the first round, involve 700 partners from 26 member states and Norway. The majority related to air combat, ground combat and naval combat capabilities.

The EDF has a 2021 - 2027 budget of €7.953 billion, of which €2.7 billion is earmarked for collaborative defence research projects. The fund is part of a broader plan by the European Commission and the European Defence Agency to streamline the development of defence technology across the EU.

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