Fostering Innovation for Strategic Autonomy: The Crucial Role of Defence Innovation Support in Hungary and Europe –

Fostering Innovation for Strategic Autonomy: The Crucial Role of Defence Innovation Support in Hungary and Europe –

Top bodies of the innovation ecosystem of the North Atlantic Alliance met in Budapest in these days as part of the NATO Innovation Week. Hungary’s commitment to NATO is reflected in the fact that the country is a founding member of both the NATO Innovation Fund (NIF) and the NATO Defence Innovation Accelerator for the North Atlantic (DIANA). As a result of Hungary’s active role, both organisations chose Budapest as the venue for their meeting on September 18-22.

Bernadett Petri is Managing Director of the Hungarian Development Promotion Office (MFOI Advisory).

Imre Porkoláb is Ministerial Commissioner for Defense Innovation and Managing Director of the Defence Innovation Research Institute of Hungary (VIKI).

In today’s rapidly evolving global security landscape, innovation in defence capabilities has become paramount. Nations across Europe are actively seeking ways to strengthen their military capabilities, defence infrastructure, promote research and development, and enhance the resilience of the whole society, to successfully address emerging security challenges. In addition to the relevant national toolkits, within the Euro-Atlantic area there are several well established and lately launched initiatives are at the forefront of this effort.

Within NATO the Science and Technology Organisation was the forerunner for R&T activities. It was reinforced by the above-mentioned NATO Innovation Fund (NIF) and the NATO Defence Innovation Accelerator for the North Atlantic (DIANA), to provide financial support, and a structural framework to support defence innovation projects. The NATO Innovation Fund, which was created to supercharge the Alliance’s unique innovation ecosystems, is a standalone EUR 1 billion venture capital fund, supporting ambitious researchers developing emerging and disruptive technologies. It focuses on enhancing technologies among NATO member states, aiming to strengthen collective defence capabilities.

Within the EU the EU Defence Innovation Scheme (EUDIS), and the Hub for EU Defence Innovation (HEDI) are the most significant dedicated defence innovation institutions. The European Defence Fund, endowed with a budget of €7,95 billion for the period 2021-27, was established as the instrument of the European Commission to provide financial support to defence R&D and cooperation. Both the NATO innovation supporting assets and the European Defence Fund (EDF) are distinct initiatives with shared goals of promoting defence innovation and capabilities. Although separate, these funds operate in harmony to advance defence innovation and security efforts within their respective NATO and EU member state frameworks.

In Hungary, the dual-use approach, emphasizing the development of technologies with applications in both defence and civilian sectors, plays a pivotal role in fostering innovation, economic growth, and security. This approach aligns with the objectives of the European Defence Fund (EDF) and NATO Innovation Fund, offering Hungary a unique opportunity to harness innovation across multiple domains.

Embracing dual-use technology projects has a direct economic impact and also strengthens Hungary’s security infrastructure. Participation in dual-use initiatives has contributed to significant growth in high-tech exports, stimulating economic diversification and creating jobs with high added value. Hungary’s active involvement in dual-use projects has accelerated technological advancements. Collaborative research and development efforts, both within and outside the defence sector, have resulted in cutting-edge innovations. Hungary’s strong tradition of academia-industry partnerships has been amplified through dual-use initiatives. Collaborations between defence companies, research institutions, and civilian enterprises have significantly increased leading to knowledge exchange and innovation diffusion.

“Creatively disruptive” technologies are vital to maintaining our competitive edge (or to avoid strategic disadvantage) in national defence and security. Innovators experimenting with ideas or achieving initial success should be encouraged to offer solutions in these areas. By launching the Defence Innovation Research Institute (VIKI), the Hungarian Ministry of Defence is taking advantage of the in-depth expertise available in our country and in the region to acquire future defence capabilities through the development of dual-use products and services, and to develop the defence innovation ecosystem.

Connecting military end users with the best and most effective innovators is of utmost importance. In addition, companies carrying out dual-use scientific research and technological developments must be involved defence-related projects and provided with access to the funding opportunities within the European Union and NATO, in order to develop the most effective technological solutions for the armed forces.

The task of VIKI, the Defence Innovation Research Institute of Hungary is to map the domestic innovation ecosystem, including large companies, SMEs and research institutes. In relation to the European Defence Fund, this task is carried out together with the assistance of the Hungarian Development Promotion Office (MFOI Advisory), which operates as a background institution of the Prime Minister’s Office, under the direction of Minister Tibor Navracsics, and manages the civil side of dual-use innovations in this field.

The MFOI Advisory’s purpose is to ensure that the Hungarian economic and social actors are more effectively interpreting and assigning tasks to the European Union’s policy objectives and, as consequence, are more successfully accessing the financial resources directly managed by the EU institutions. Similar to the approach of the European Union, Hungary sees an extremely significant potential in connecting and transforming civil and military innovations and ensuring synergies in this area.

The 2021 EU Action Plan on synergies between civil, defence and space industries lays the ground to deliver concrete policy actions under three headlines: enhancing complementarity, facilitating the use of civil industry research achievements and civil-driven innovation in European defence cooperation projects (the ‘spin-ins’) and promoting that EU funding for research and development has economic and technological dividends for EU citizens (the ‘spin-offs’). The national support system, via the cooperation between VIKI and MFOI also serves this purpose. The two organisations are confident that, as a result of their cooperation, they can build a more efficient international system of relations in order to make synergies between innovations work.

In today’s rapidly evolving geopolitical landscape, increasing financial support provided for defence innovation stand as beacons of strategic foresight and collective resilience. Ensuring support for defence innovations is the most effective reinforcement of preserving peace and stability, ensuring strategic autonomy, and providing responsible care for European citizens in a constantly changing world of emerging security threats and geopolitical shifts. A thriving European defence innovation ecosystem should prepare us for an unpredictable future, where resilience, innovation, and unity are our strongest European assets.