The Opportunity for SMEs in an Integrated European Defence ...€¦ · The Opportunity for SMEs in...
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1 AeroSpace and Defence Industries Association of Europe The Opportunity for SMEs in an Integrated European Defence Industry: European Council on Defence and beyond SEDE Sub-Committee, European Parliament, Brussels 5 th November 2013, Brussels Prof. Dr.-Ing.Rolf-Jürgen Ahlers Vice Chairman of ASD Supply Chain Commission Chairman of ASD SME Group (ProxiVision GmbH, CEO)
Transcript of The Opportunity for SMEs in an Integrated European Defence ...€¦ · The Opportunity for SMEs in...
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AeroSpace and DefenceIndustries Association of Europe
The Opportunity for SMEs in an
Integrated European Defence Industry:
European Council on Defence and beyond
SEDE Sub-Committee, European Parliament, Brussels
5th November 2013, Brussels
Prof. Dr.-Ing.Rolf-Jürgen Ahlers
Vice Chairman of ASD Supply Chain Commission
Chairman of ASD SME Group
(ProxiVision GmbH, CEO)
Slide 2
In Europe:
Two out of three jobs in the private sector are in SMEs
More than half the total value-added is created by these businesses
In number:
SMEs represent more than 80% of aerospace suppliers
SME’s strength
SMEs hold a large part of know-how necessary to build and manufacture aircraft systems, parts and components
SMEs are an important source of innovation and therefore as enablers for competiveness. New technologies require significant investment in R&D.
SMEs are flexible and innovative; focused on specific technologies
Supply Chain
Slide 3
large system integration
final assembly and interface with Customers
Responsibility flow down:
SMEs bear technical, manufacturing and financial risks; Return on Investments (RoI) after a long period of time (No risk and revenue sharing)
Many projects are delayed due to different reasons, the SMEs have to bear this risk without having the possibility to control the project management
Original Equipment Manufacturer’s focus
(OEM)
Slide 4
Facts
Declining budgets together with market fragmentation means loss of competitiveness (see FAS4Europe and other studies of EDA)
Highly regulated market
No new national programs due to high investment needed and low market
Security of supply: control and ownership of critical technology
No common regulations: different standards and certifications
Technological Capabilities that are not maintained will not be restored
R&D need to be directed toward those cutting-edge technologies which ensure the sovereign effectiveness of Europe
Defence Market
Slide 5
New Programs: consolidation of demand
Pooling & Sharing: Joint procurement
Rationalization of demand : too many specifications, too complicated procedures
Regulations for SMEs: to grow in dimension and SMEs concentration
Financial support for SMEs: e.g. COSME (Competitiveness of Enterprises and SMEs)
CSDP, EDA, EC Common Secure and Defence Policy; Dual Use Research; investment in Space; Common Approach to Certification
Needs
Slide 6
Actions are necessary that launch projects based on a coordinated plan to create a European Strategic approach
With a special emphasis on:
Sustaining and developing industrial capabilities
Continuous investment in RT&D
Supporting maturing technologies needed
Improving cooperation and business models
Minimizing risk in future development programmes (Trust and Reliability)
Adaptating to geostrategic Priorities in a new context (e.g.cyber defence)
To avoid erosion of European Industrial Capabilities (sustainable and competititve EDTIB)
With a strong political will that goes beyond the positive declaration, i.e. with a strong will for concrete results; it is detrimental to the perennity of our Industry
… additionally, Business ethics is nowadays a request by major European customers in their supply chain management. Business Ethics can become a critical competitive advantage for European SMEs and not only a risk management tool.
Conclusion
Slide 7
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If appropriate measures are not taken…
…there will be consequences.
Slide 8
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11/7/2013
Definition of Impact of Industrial Capability Loss/Gap
Capability
Level
Time
Critical Capability level
Capability acquistion slope
No/limited risk
Of Capability loss
Medium risk of Capability loss
High risk
of Capability loss
Minor impact
duration
Low cost effort
Capability (re)acquisition slope
Medium impact
Capability acquistion slopeHigh impact
Very high impact
Present capability
levelMedium cost effort
High cost
effort
Future capability level
17 100 Rest
Slide 9
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The turning point is reached and it is time to decide…
…in which direction to pull.
Slide 10
Restructuring of defence markets and EDTIBwill bring opportunities and threats
Adaptive, well skilled, mature SMEs with products, technologies or demanded skills can enlarge their field of activity and enter new markets
But opening of markets brings competition
Restructuring can brake up existing supply chains (relations with customers)
SMEs need to be well prepared in terms of processes and cross-sectoral skills to be in a good position in the new environment
Slide 11
SMEs ask for
Reducing red tape for funded R&D
Fully funded R&D should be considered, as SMEs do not have sufficient financing for long term investments with late Return on Investments (RoI)
Contract sizes should also allow SMEs to bid for contracts
Down flow of payments needs to be ensured
Payment terms should be adapted accordingly
Cross-border bidding of SMEs needs to be supported
Protection of IPRs needs to be ensured by governments, as SMEs can rarely defend it
Slide 12
Prof. Dr.-Ing. Rolf –Jürgen AhlersVice Chairman of ASD Supply Chain Commission
Chairman ASD of SME Group(ProxiVision GmbH, CEO)
Additional Information:
Gloria MartiniHead of European Affairs
ASD - AeroSpace and Defence Industries Association of EuropeRue Montoyer 10
1000 Brussels , Belgium
Phone: +32 27 75 81 [email protected]
www.asd-europe.org
