Working meeting - SME Europe Office | Europe's defense - the role of SMEs in the context of the white book “Readiness 2030”

Europe's defense - the role of SMEs in the context of the white book “Readiness 2030”

Representation of the strategic context and urgency

The European security architecture is in a fundamental change. The “Joint Weißbuch on European Defense- Readiness 2030” (hereinafter referred to as “White Book”) on March 19, 2025 by the European Commission and the High Representative for Foreign and Safety Policy. This finding is underpinned by the highly intensive war in Russia in Ukraine, the increasingly aggressive attitude of authoritarian states such as China, the increase in hybrid threats and a recognizable shift in the security policy focus of the United States away from Europe. Decades of sub -investments have weakened the European willingness to defend. In view of these tectonic shifts in international order, Europe is faced with the choice of actively shaping this new order or being designed by it. The Weißbuch argues that the previous efforts, despite the undeniable advantages of NATO and EU, are no longer sufficient. Europe had to “rebuild” and “take considerably more responsibility for its own safety”.

Suitable for:

• Europe's security architecture under pressure: threats and strategic challenges

Presentation of the SME Europe Working Meeting

Against this serious background, the working meeting “European defense and the integration of SMEs: innovation and new technologies”, which will take place on May 20 to 3:00 p.m. CET in the Brussels office of SME Europe (Rue d'Arlon 46, 1000 Brussels) and online, wins a special relevance. The event, under the patronage of Riho Terras MDEP, chairman of the EPP SME Defense Initiative and deputy chairman of the European Parliament Committee (Sede), is aimed at offering a platform for the reflection of the European Commission's plans in the light of the white book. The focus is on how small and medium -sized companies (SMEs) can strengthen the defense skills of Europe through innovation, investment and competence development.

Thesis: The central but challenging meaning of SMEs for the realization of the European defense goals

Small and medium -sized companies (SMEs) are increasingly recognized as indispensable players for strengthening European defense skills. They are considered “essential drivers of innovation”, especially with regard to disruptive technologies that are of crucial importance for the future defense ability of Europe. This assessment is also reflected in the Weißbuch, which emphasizes the need to support SMEs with targeted initiatives such as Fast (Fund for Acceleration of Supply Chain Transformation).

Despite this fundamental recognition, SMEs continue to be faced with considerable obstacles. In particular, this includes difficulties in access to qualified specialists - especially in future fields such as artificial intelligence (AI) and quantum technology - as well as in securing the necessary funds for growth and scaling. The upcoming SME Europe working meeting will explicitly devote itself to these challenges and discuss specific solutions.

The time proximity of the publication of the Weißbuch in March 2025 and the SME Europe event in May 2025 creates a remarkable synergy and gives the event a special urgency. The Weißbuch presents an ambitious and time-critical agenda for European defense, which includes concrete legal initiatives and schedules, such as the submission of a “Omnibus Ordinance” until June 2025 and the adoption of the European program for the defense industry (EDIP) until summer 2025. The SME Europe thus takes place in a decisive time window: the first important implementation periods. This increases the importance of the meeting beyond a routine discussion. It offers an immediate platform for critical evaluation and potential influencing the implementation of those measures of the white book that are of direct relevance for SMEs. The results and demands of the event could thus influence the final design of initiatives such as the omnibus regulation mentioned and SME representatives enable a proactive role in this design process.

Markus Becker

I would be happy to serve as your personal advisor.

Head of Business Development

Chairman SME Connect Defense Working Group

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The white book “European Defense - Readiness 2030”: A strategic realignment

Core targets of the Weißbuch: “Rearm Europe” - European willingness 2030

The central and overarching goal of the Weißbuch is the achievement of the full European willingness to defend until 2030. This includes the restoration of a credible deterrent and ensuring that Europe can determine in order to protect its citizens, interests and values. In order to realize this ambitious goal, the document calls for a “massive” increase in defense investments and a fundamental change in Europe's approach. It is about no less than a strategic realignment under the lead motif “Rearm Europe”.

Main pillars and suggestions with SME relevance

The white book is based on several strategic pillars and contains a number of concrete suggestions, many of which have direct or indirect effects on small and medium -sized companies:

Closure of critical ability gaps

The document identifies priority areas in which Europe urgently has to improve its skills. These include integrated air and rocket defense systems, advanced artillery systems (especially for precision strikes over large distances), ensuring the supply of ammunition and rockets (based on a “ammunition plan 2.0”), unmanned systems (drones) and systems for their defense, military mobility and skills in the areas of artificial intelligence, quantum technology, cyber and Electronic warfare (offensive and defensive). Strategic enablers such as strategic air transport, news, surveillance and education (ISR) as well as the protection of critical infrastructures are also emphasized. In order to close these gaps, a significantly increased cooperation between the Member States and the joint procurement of armaments is emphasized with the aim of increasing scale effects, interoperability and efficiency. The aim of the European Defense Agency (EDA) is to carry out 35% of the procurements together. The Commission could act as a central procurement center on request.

Relevance for SMEs:

In these prioritized skills, there are a wide range of opportunities for SMEs, especially in technological niches, as a supplier for complex systems and as a provider of innovative components and services.

Strengthening the European defense industrial exposure (Edib)

The White Book diagnoses a fragmented, sub -invested European defense industry, which is currently unable to produce in the required scope and the necessary speed. National markets are too small to maintain the necessary industrial basis.

Approaches are proposed as solutions: a “omnibus regulation” (until June 2025) for simplification and harmonizing regulations, acceleration of approval procedures, securing the supply chains for critical materials, facilitation of access to financial resources (including the consideration of ESG criteria) and to simplify the safe exchange of information. Furthermore, the aggregation of demand through long-term, multi-year contracts for the creation of planning security for industry, the securing of supply chains through the identification and diversification of sources for critical raw materials and components (e.g. chips) as well as the development of domestic alternatives, the creation of a real EU-wide market for defense goods and the consideration of a “European Preference” in the awarding of public orders (Review of the procurement directive 2026). A strong focus is also on the promotion of innovation through the launch of a “European defense technology roadmap” (initially for AI and quantum technology), the strengthening of Eudis (EU Defense Innovation Scheme) and the Defense Innovation Hub of the EDA as well as the support of SMEs with initiatives like almost. Finally, the need is addressed to remedy skilled workers and to win talents for the defense sector.

Relevance for SMEs:

The direct mention of SME support instruments such as almost is positive. The Omnibus Ordinance has the potential to significantly reduce bureaucratic hurdles, but could also create new complexities if it is not specifically tailored to the needs of SMEs.

Massive increase in defense spending and financial lever

The Weißbuch outlines five columns to finance the “Rearm Europe” project. This includes:

• A new financial instrument called Safe (Security and Action for Europe), an EU regulation (Art. 122 TFEU) that should provide up to € 150 billion of EU-house-based loans to Member States for joint procurement projects (with the participation of at least two countries, whereby a country is the Safe recipient member state). This covers priority skills and includes a VAT exemption for safe-financed purchases.
• The coordinated activation of the national exceptional clause of the stability and growth pact (SGP) by the Member States in order to enable higher defense spending (potentially 1.5% of GDP, which could lead to around € 800 billion over four years, including safe).
• The flexibility of existing EU instruments in order to enable the replacement of funds within the cohesion policy programs in favor of defense and security priorities.
• An extended role of the European Investment Bank (EIB), which accelerate your Action Plan for Security and Defense, double your annual investments on € 2 billion (for drones, space travel, cyber, etc.), make your funding criteria less restrictive and set a superordinate policy goal for security investments.
• The mobilization of private capital by improving the financing access for defense companies (in particular SMEs) and clarification of the relationship between defense and sustainability investment goals in accordance with the Opening of the Opening of the Open (SFDR). The capital market union should have a supporting effect.

Relevance for SMEs:

SMEs could indirectly receive access to Safe-financed projects through main tasks. Direct opportunities could result from the expanded EIB role and potentially through flexible cohesion funds. The clarification of the SFDR is of great importance for mobilizing private investments in the defense sector's SMEs.

Suitable for:

• The “Military Mobility” concept and REARM Europe: Strategies to strengthen European defense

Specific mention and intended role of SMEs in the white book

The white book explicitly recognizes that SMEs play a key role in developing disruptive technologies. This is almost underlined by the focus on future fields such as AI and quantum technology as well as the reference to the SME-specific funding instrument. The description of the SME Europe event confirms this assessment and emphasizes that SMEs are considered “essential drivers of innovation”. According to the event announcement, between 2023 and 2027 up to € 840 million will be made available to support SME activities. This sum, which probably refers to existing or ongoing programs, must be re -evaluated and classified in the context of the new, massive financing levers of the white book.

However, the ambition of an “massive” increase in investments and production capacity formulated in the white book has an inherent challenge for the role of small and medium -sized companies. The Weißbuch emphasizes the need to strengthen the fragmented European defense industry and to quickly raise production. Large-volume common procurement projects, as should be promoted by the Safe instrument, as well as the desired consolidation of industry tends to favor large, established companies that have the necessary capacities for the processing of such orders. SMEs are often characterized by greater flexibility and innovative strength, but they often lack resources and administrative capacity in order to appear directly as the main contractor for very large tenders or to lead complex, cross -border consortia. If the “massive increase” of defense production is primarily via large system integrators, there is a risk that SMEs only act as subcontractors with low margins or that the innovation contribution of smaller, agile companies will be slowed down by the dominance of large structures and their established processes. It is therefore of crucial importance that the SME funding instruments (such as Fast and Eudis) mentioned in the white book and the design of the planned omnibus regulation SME not only take into account nominal. Rather, they have to ensure real, low -threshold access to funds and orders as well as fair competitive conditions in the new paradigm of “Rearm Europe” in order to prevent unintentional marginalization of these important actors.

Opportunities and challenges for SMEs in the European defense sector

Analysis of the hurdles identified in the white book and in the event context

Strengthening European defense skills with the significant participation of SMEs is a declared goal. However, these companies are faced with a number of significant hurdles that are addressed both in the white book and in the announcement of the SME Europe event:

• Financing access: One of the greatest challenges for SMEs is to secure the necessary funds to advance innovations and scale their production. The white book recognizes this problem and suggests measures such as an expanded role of the EIB and the mobilization of private capital by clarifying the SFDR regulations.
• A shortage of skilled workers: Especially in high technology areas such as artificial intelligence and quantum technology, there is an acute lack of qualified specialists, which threatens the innovation and competitiveness of SMEs. The Weißbuch identifies this as a problem for the entire European defense industry and calls for measures to acquire talent and commitment.
• Market access and complexity: SMEs suffer from fragmented national markets and often opaque, complex procurement processes. The Weißbuch aims to create a “real EU-wide market” for defense goods and to simplify administrative procedures through a “omnibus regulation”.
• Visibility and networking: It is difficult for many SMEs to be perceived by potential clients, especially large system integrators, and international partners and to effectively integrate into value chains.

Potentials for SMEs through the new initiatives and strategic change

Despite these challenges, the initiatives outlined in the Weißbuch and the general strategic change in European defense policy also open up considerable potential for SMEs:

• Innovation leadership: In technological niches and in the development of disruptive technologies (e.g. AI, quantum computing, cyber defense, unmanned systems), SMEs can fully exploit their agility and specialization. The announced “European Defense Technology Roadmap” could generate targeted research and development orders that are tailored to the strengths of SMEs.
• New sources of financing: Targeted funding programs for SMEs such as Fast and Eudis, improved access to funding from EIB and potentially a relieved access to risk capital due to the intended clarification of the SFDR criteria could strengthen the financial basis of SMEs. The € 840 million for SME activities mentioned in the event context in the period 2023-2027 are an important starting point, but in the light of the new ambitions.
• Participation in larger programs: SMEs can participate as specialized suppliers or as partners in consortia in the skill -prioritized ability development programs (e.g. in the area of ​​air defense, artillery, drone defense) and thus benefit from the increased defense spending.
• Simplified framework conditions: If the planned “Omnibus Ordinance” meets the expectations placed in it, administrative loads for SMEs could decrease noticeably and the cross-border market access could be made easier.
• Focus on “Secure Supply Chains”: SMEs that provide critical components, materials or technologies for the defense industry could benefit from the measures announced in the white book to strengthen and diversify European supply chains. This can lead to increased demand and long -term business relationships.

A subtle, but potentially significant aspect concerns the financing of SMEs, especially those with dual-use technologies. The Weißbuch strives to clarify the sustainable finance disclosure regulation (SFDR) in terms of defense investments. However, many innovative technologies that are relevant for defense, such as AI, cyber security solutions or advanced materials, also have civilian application options (dual -use). SMEs are often particularly well represented in these dual-us areas. Private investors and banks are increasingly subject to strict ESG guidelines (environment, social, governance) and the associated expectations of their stakeholders.

Suitable for:

• Resilience through technology: How dual-use concepts ensure supply and Germany's infrastructure

Defense investments are often critically assessed in this context or excluded in general. The white book recognizes this problem and demands a clarification of the SFDR, which is an important step. However, a pure “clarification” could not be sufficient. It may be necessary to enable a proactive positioning and specific criteria to be classified as an ESG-compliant or at least as a “socially relevant” in the context of European security provision. Without such clear and positive classification, SMEs could remain cut off by important private sources of financing despite the political expressions of will in the white book. This would consider their ability to scale and innovate considerably. The upcoming SME Europe Event offers an important platform in order to illuminate this aspect of the SFDR declaration specifically from the perspective of SMEs and formulate corresponding demands.

Key initiatives of the white book “Readiness 2030” and their implications for SMEs

Key initiatives of the white book “Readiness 2030” and your implications for SMEs - Image: Xpert.digital

The key initiatives of the white book "Readiness 2030" show a variety of measures and their potential effects on small and medium -sized companies (SMEs). The Safe instrument provides for up to 150 billion euros in the form of EU loans to member states for joint procurement projects and to introduce VAT exemption. For SMEs, there is the opportunity to indirectly participate as a supplier in large -scale projects and to benefit from tax advantages in the supply chain. At the same time, however, there is a risk of marginalization if they are not actively integrated into supply chains. In order to successfully incorporate SMEs, transparent award criteria and mechanisms are necessary that ensure fair participation and the transfer of advantages.

The Omnibus Ordinance is intended to support the simplification and harmonization of rules, the acceleration of permits and the securing of supply chains SME. This opens up opportunities such as the reduction of bureaucratic hurdles, relieved market access and better access to financing and information. However, an excessive focus on larger actors could create new challenges. It is therefore crucial to include SME associations in the design at an early stage and ensure practical suitability.

The goal of 35 percent joint procurement by the European Defense Agency (EDA) offers SMEs, especially as a specialized supplier, opportunities to gain access to larger cross -border projects and order volume. At the same time, however, they have to meet high demands on capacity and standardization in order not to be dominated by larger system integrators. Clear rules for subordinate contracts, the promotion of SME consortia and support in standardization and certification are essential here.

The “European Preference” initiative is considering introducing the preference of EU providers for tenders. SMEs could benefit from this because they would have an advantage over non -European competitors. However, there is a risk of protectionism accusations and ambiguities in implementation. A transparent and fair application of this preference is therefore essential to avoid distortions of competition within the EU.

The expanded role of the European Investment Bank (EIB) provides for a doubling of annual investments to two billion euros, with a focus on drones, space travel, cyber technologies and similar areas. Innovative SMEs, especially in strategic sectors, could get better access to financial resources. However, SMEs must ensure that their projects are visible and financed, since the focus may be on larger projects. SME-specific financing instruments and advisory services for the application would have a support here.

The flexibility of the cohesion fund enables the replacement of funds in favor of defense and security priorities. In particular in certain regions, this could create new sources of financing for SMEs, for example for projects with a regional development perspective. However, there is a risk that funds will be deducted from other important development goals. Transparent criteria for the use of funds and the focus on SME projects with regional added value are therefore crucial.

Finally, the clarification of the relationship between defense and sustainability investment objectives under the SFDR should make access to private capital easier. This is particularly advantageous for SMEs who rely on dual-use technologies. However, unclear regulations could tighten existing problems. Clear, SME-friendly guidelines that recognize the contribution of defense-relevant SMEs for security are of central importance here.

EU funding instruments and political measures to strengthen SMEs in defense

Detailed consideration of existing and planned instruments

The European Union already has a number of instruments to promote research, development and industrial cooperation in the defense sector, and new, more ambitious measures are planned in the course of the white book. A central question that will also be discussed at the SME Europe event is how these programs can better support SMEs.

European Defense Fund (EVF/EDF)

The EVF is the EU flagship program to promote cross -border cooperation in defense research and development. An analysis of the previous funding periods shows a significant participation of SMEs, often as a partner in larger consortia, but also in specific tenders tailored to SMEs. Nevertheless, SMEs continue to report on challenges in the application, the complexity of consortium formation and the administrative effort.

EU Defense Innovation Scheme (Eudis)

Eudis was launched to promote disruptive technologies and innovations of SMEs and start-ups in the defense area. The white book provides for a strengthening of Eudis, which underlines its role as an important catalyst for groundbreaking developments from the SME sector. The SME Europe event will highlight Eudis as one of the central support initiatives for SMEs.

Fund for Acceleration of Supply Chain Transformation (Fast)

This initiative is specifically geared to support SMEs in the modernization and transformation of their supply chains in order to make them more resilient and competitive. Adequate financial resources and an unbureaucratic design of the funding criteria that take into account the specific needs of SMEs will be decisive for the success of Fast.

New safe instrument (security and action for Europe)

The Safe instrument proposed in the Weißbuch, with a potential volume of up to € 150 billion in EU household-based loans to member states for joint procurement projects, represents a paradigm shift in EU defense financing.

For SMEs, the conception of Safe results in an primarily indirect access option. Safe is designed for cooperation projects between Member States, which typically include large procurement volumes (“Joint Procurement Projects Involving at Least Two Countries”). Small and medium -sized companies are rarely the main actors or direct contractual partners in such major projects. Your access to Safe-financed orders will therefore primarily take place as a supplier or subcontractor for the larger consortia, which the Member States are responsible for implementing the projects. This carries the risk that SMEs come under pressure in the negotiations on delivery conditions and prices or that the financial advantages of Safe, such as favorable credit conditions for the Member States or VAT exemption, are not completely passed on to you. It may therefore require specific clauses in the SAFE guidelines or in the national implementation programs of the Member States to ensure fair and substantial SME participation and to ensure a “trickle-down effect” of the financial advantages to the SME level of the supply chain.

Analysis of the planned “Omnibus Ordinance”

The “Omnibus Ordinance” planned until June 2025 is one of the central legislative initiatives of the white book to strengthen Edib. Their goals are ambitious: the simplification and harmonization of rules, the acceleration of approval procedures (e.g. for production facilities or exports), the securing of supply chains for critical goods, the facilitation of the financing access for defense companies and the creation of secure channels for the exchange of information.

For SMEs, this regulation has enormous potential to facilitate your business, especially in the cross -border context. If it is implemented well, lengthy and costly administrative processes could be streamlined. However, there is also a risk that a poorly designed regulation will lead to new bureaucracy or that the specific needs and capacities of SMEs will not be sufficiently taken into account. It is therefore of crucial importance that the perspective of SMEs and its associations is included in the development of this regulation from the start and comprehensively. The SME Europe Event offers a timely opportunity for SME representatives, their input and their concerns before the Commission finalizes its proposal.

The role of the European Investment Bank (EIB) and the mobilization of private capital

The Weißbuch provides for a significantly strengthened role of the European Investment Bank (EIB) in the financing of the European defense industry. The EIB is intended to double its annual investments as part of its action plan for security and defense to € 2 billion, with a focus on areas such as drones, space and cyber security. In addition, your funding criteria should be designed less restrictively in order to enable investments in a wider spectrum of defense goods and technologies.

At the same time, the Weißbuch aims to mobilize private capital. A key element for this is the clarification of the relationship between defense investments and sustainability goals in accordance with the Opening Ordinance (SFDR). This clarification is intended to improve access to private capital for defense companies, especially for SMEs. As already discussed, a differentiated view of dual-use technologies and a SME-friendly interpretation is crucial here.

Flexibility of cohesion funds

Another financial policy lever that the white book suggests is the replacement of funds from the EU's cohesion funds in favor of defense and security priorities.

This measure could have regionally differentiated opportunities, but also risks. Cohesion funds are traditionally aimed at reducing regional inequalities in the EU and strengthening economic, social and territorial cohesion. The replacement of defense purposes could mean that regions with an existing or potential defense industrial basis and corresponding SME clusters benefit from additional investments. This could contribute to the creation of jobs and to strengthen the local economy in these regions. On the other hand, this approach has the risk that funds will be deducted from other important regional development goals, such as education, infrastructure or environmental protection. It could also lead to a concentration of defense investments in certain regions, while others who may also be able to contribute but do not have the same industrial history are neglected, or fundamentally withdrawn from other development areas. In order to minimize negative effects, clear criteria for the use of funds, transparent allocation and strict control will be decisive. It must be ensured that this flexibility is not at the expense of the original cohesion targets and that SMEs in all regions that can make a relevant contribution to strengthening European defense skills are given fair opportunities for support.

EU funding and support mechanisms for SMEs in the defense sector: status quo and outlook

EU promotional and support mechanisms for SMEs in the defense sector: Status quo and outlook- Image: Xpert.digital

For small and medium -sized companies (SMEs) in the defense sector, the EU offers various funding mechanisms that enable support from research, development and innovations, but at the same time bring challenges. The European Defense Fund (EVF/EDF) aims to promote cross-border F&E projects in the defense area, with specific tenders and bonuses for SMEs. However, the high administrative effort, the complexity of consortium formation and the long processing times are a hurdle. The budget for the period 2021 to 2027 amounts to 7.9 billion euros, and there is synergies with national subsidies and Eudis projects.

The EU Defense Innovation Scheme (Eudis) focuses on disruptive technologies and innovations, especially SMEs and start-ups. With hackathons, business coaching and pilot project financing, it offers visible initiatives, but is characterized by strong competition and challenges in scaling after a successful pilot phase. Eudis is part of the EVF and other EU programs and often serves as a preliminary stage for larger EVF projects.

The Fund for Acceleration of Supply Chain Transformation (almost) supports SME in the modernization and transformation of supply chains in order to strengthen their resilience and competitiveness. The exact design and the budget are still pending, but care is taken to keep the criteria of SME-friendly. Almost should strengthen supply chains that are important for EVF projects and edip initiatives.

A planned omnibus regulation aims to reduce bureaucratic hurdles, accelerate approval procedures and to facilitate SME access. However, there is a risk that new complexities arise if the implementation is not in line with SMEs. As a legislative framework, the regulation will not provide a direct budget, but will serve as a substructure for other funding instruments.

The also planned safe instrument enables EU-supported loans to member states for joint procurement projects. Although SMEs only indirectly have access via supplier rolls, possible tax advantages such as an VAT exemption could be passed on. However, the dependence on main customers and ensuring fair conditions remain challenges. The volume could reach up to 150 billion euros and finance major projects based on EVF or edip preparations, as well as strengthening demand for SMEs that are almost supported.

After all, the European Investment Bank (EIB) plays an expanded role in investments in safety and defense, including drones, space travel and cyber technologies. This could potentially better access to loans and guarantees, even in the dual -use area. However, the EIB focus is often on larger projects, which can make the bankability of SME initiatives difficult. However, the annual investments are to be doubled to 2 billion euros. At the same time, EVF/EDF projects can be co-financed and the capital requirements of SMEs, which are supported by Eudis or almost funded, can be supported.

Innovation and new technologies: SME as a driver in the defense sector

Focus on AI, quantum technology and other disruptive technologies

Technological superiority is a crucial factor for future defense and security ability in Europe. The white book “Readiness 2030” therefore focuses on the promotion and development of key technologies. Artificial intelligence (AI) and quantum technology are explicitly prioritized. To strategic control of these developments, the Commission plans to submit a “European defense technology roadmap”.

At the same time, the announcement of the SME Europe event emphasizes that small and medium -sized companies in particular play a key role in developing disruptive technologies. At the same time, however, the considerable challenges with which SMEs are confronted with high -qualified specialists in these specialized fields when accessing.

How SMEs can contribute to development and implementation

SMEs have specific strengths that make them valuable partners in the development and implementation of new defense technologies:

• Agility and specialization: Compared to large companies, SMEs can often react faster to new technological requirements, implement innovative ideas more flexibly and develop highly specialized niche solutions that can be crucial for larger defense systems.
• Spin-offs and spin-ins: SMEs are often pioneers when transferring civil innovations into the military application area (spin-in) and vice versa in the commercial use of military research results in the civil sector (spin-off). This dual-use approach has a considerable potential for innovation.
• Participation in testbeds and pilot projects: As part of initiatives such as Eudis and the planned technology roadmap, SMEs can participate in test environments (testbeds) and pilot projects in order to test their technologies under realistic conditions and to lead to market maturity.

Importance of the “European Defense Technology Roadmap”

The announced “European Defense Technology Roadmap” will be an important instrument to set clear priorities for technology development in the European defense sector. It is intended to bundle investments and focus on research and development activities on the strategically most important areas. It is crucial for SMEs that this roadmap not only defines large projects for established main customers, but also provides specific options, support windows and tenders for smaller companies. This is the only way to effectively mobilize the innovation potential of SMEs for the European defense goals.

The simultaneous emphasis on disruptive innovation, which is often promoted by agile SMEs, and the need to build up safe and resilient supply chains, can create a field of tension for SME. By definition, disruptive innovation means questioning established processes, technologies and sometimes also supplier structures and replacing them with completely new approaches. This is a core competence of innovative SMEs. On the other hand, the requirement for “safe supply chains” and the need to quickly get production up can lead to public clients and large system integrators on proven, standardized components and established, often larger suppliers to minimize risks regarding delivery reliability and quality. An SME with a groundbreaking, but possibly not yet tried out or extensively certified technology could have difficulty demonstrating the production maturity, certification and proven resilience of its supply chains required for long -term delivery contracts and integration into complex defense systems. There is therefore a risk that the legitimate focus on “safe supply chains” and rapid scalability dampens the willingness to take the (initial) risks associated with really disruptive SME technologies. The EU programs such as Eudis and Fast as well as the design of the technology roadmap must therefore contain mechanisms that actively support not only the pure invention and early development, but also the merging, certification, standardization and integration of disruptive SME technologies into larger defense systems and their supply chains. This could be done, for example, by special support lines for the industrial scaling of SME innovations or by creating “sandboxes”, in which new technologies can be tried out under relieved conditions and qualified for use.

The event “European defense and the integration of SMEs”: expectations and implications

Analysis of the agenda and the key players of the event

The working meeting “European Defense and the integration of SMEs: innovation and new technologies” on May 20, 2025 is strategically scheduled and prominently occupied, which indicates its importance as a platform for the dialogue between politics, industry and SME.

• The opening by Riho Terras MDEP, chairman of the EPP SME Defense Initiative and deputy chairman of the Sede Committee, is expected to present the political perspective of the European Parliament and the European People's Party (EPP) on the role of SMEs in European defense and underline the need for its stronger integration.
• The main lecture by Guillaume de la Brosse, head of the unit for defense policy and innovation to the European Commission, will be of particular interest. He is expected to explain the commission's plans to implement the Weißbuch and specifically explain how SMEs can integrate into these plans and benefit from the new initiatives. His explanations will be interpreted as a direct reaction of the executive to the goals and measures formulated in the white book.
• The subsequent statements of members of the European Parliament and representatives of the economic sector will offer an important opportunity to bring a variety of perspectives, experiences and concrete demands into the discussion, in particular from the perspective of SMEs. Specific challenges and solutions from practice can be addressed here.
• The moderation by Horst Heitz, General Secretary of SME Europe of the Epp, will make sure that the discussion focuses on the concerns and needs of small and medium -sized companies.

What specific steps and discussions are to be expected?

In view of the agenda and the current defense policy developments, the discussions at the event will concentrate on the following core areas:

• Practical implementation of SME funding measures: a detailed discussion of the funding instruments mentioned and existing in the white book such as EDF, Eudis and in particular the new fast instrument. SME representatives are expected to express their expectations regarding accessibility, bureaucracy effort and effectiveness of these instruments.
• Estimates for the “Omnibus Ordinance” and the Safe instrument: From a SME perspective, the potential effects of these far-reaching initiatives are assessed. There are concrete suggestions to be expected how these instruments can be designed to make SME-friendly.
• Solution approaches for a shortage of skilled workers and financing access: The participants are expected to discuss proven practices and new ideas on how SMEs can encounter the lack of qualified workers and improve their access to financial resources.
• Calls to politics: The event will serve as a platform to formulate clear political demands on the EU institutions and the Member States, which aim to improve the framework conditions for SMEs in the defense sector.

How the event can contribute to better integration of SMEs

The SME Europe Event has the potential to make a positive contribution to the better integration of SMEs into the European defense landscape on several levels:

• Direct feedback loop: As one of the first specialist events after the publication of the Weißbuch, the meeting offers an immediate opportunity for SMEs and its representatives to give feedback on the plans of the Commission and Parliament. This feedback can flow into the ongoing design of the new defense policy initiatives.
• Networking: The event brings SME together with high-ranking political decision-makers, representatives of the EU institutions and potential partners from industry and thus promotes the establishment of important networks.
• Formulation of concrete recommendations: By bundling the expertise and the concerns of the participants, specific and practical recommendations can be developed at the event that can serve as the basis for political initiatives and for the strategic orientation of SMEs.

The high -ranking political goals and the announcements of massive financing flows, as shown in the white book “Readiness 2030”, encounter the lived reality of small and medium -sized companies at the SME Europe Event. These are confronted with very specific problems every day, such as access to qualified staff, securing financing and dealing with bureaucratic hurdles. The Weißbuch presents a top-down vision for “REARM Europe”, which is equipped with ambitious goals and instruments. SMEs, on the other hand, typically operate bottom-up and have to face these concrete, operational challenges. The event brings together these two levels - the strategic vision and the operational reality. The statements of Guillaume de la Brosse for the European Commission will be measured on the reactions of the business representatives and the experiences of the SMEs described. If the solutions proposed in the white book, such as the Fast instrument or the Omnibus regulation, do not address the actual needs of SMEs or even create new hurdles, this will inevitably be discussed at the event. The event thus acts as an important “reality check” for the ambitions of the white book. It can help to send warning signals at an early stage, identify potential pitfalls and to develop correction suggestions. The aim must be to bridge the gap between the strategic vision and the operational feasibility for SMEs and to ensure that the “REAR” strategy takes and promotes SME not only on paper, but also in practice as indispensable players.

Recommendations for political decision -makers and SMEs

Specific recommendations for action to optimize the framework conditions for SMEs

For political decision-makers (EU level and Member States):

• SME-friendly design of the “Omnibus Ordinance”: The early and continuous consultation of SME associations and individual SMEs in the development of the regulation is essential. A “SME test” should be carried out for all proposed measures to ensure that you take into account the specific needs and capacities of smaller companies and do not lead to disproportionate bureaucracy.
• Transparent and low-threshold access to safe funds: mechanisms must be created that enable SMEs fair access to the projects financed by Safe. This could be done by determining quotas for SME participation among main customers, by promoting SMEs-guided consortia for specific sub-projects or through direct funding for SMEs that make innovative contributions to the safe priorities. The advantages of VAT exemption should be demonstrably passed on to SMEs in the supply chain.
• Strengthening Eudis and Fast: These SME-specific instruments must be equipped with sufficient and predictable budgets. The application and reporting proceedings should be designed as unbureaucratically and quickly as possible. The focus should be on promoting real innovation and the fast market launch of new technologies.
• Specific programs should be put on specific programs in cooperation with educational institutions, industrial associations and regional development agencies in order to train and further develop specialists for the needs of SMEs in the defense sector, especially in high technology and cyber security. This could include scholarships, dual courses and specialized training modules.
• Fast and clear implementation of the SFDR declaration: The announced clarification regarding the treatment of defense investments under the SFDR must be made quickly and offer clear, practical guidelines for investors and financial institutions. In particular, care must be taken to ensure that SMEs and companies are not disadvantaged with dual-use technologies, but their contribution to European security is recognized. If necessary, specific guidelines for dual-use investments are necessary.
• Establishment of a central contact point (“Single Point of Contact”): For SMEs that want to gain a foothold in the complex defense sector or want to expand their activities, a central consulting and information center would be helpful at EU or national level. This could offer support in navigation through funding programs, in partner searches and with regulatory questions.

Strategic advice for SMEs to use the new opportunities

• Proactive information and preparation: SME should actively and early on the new funding instruments (EDF, Eudis, Fast, Safe participation options), the planned Omnibus Ordinance and the Technology Roadmap should inform themselves and adapt their strategies accordingly.
• Network formation and consortia: The formation of national and cross -border consortia and networks with other SMEs, research institutions and also larger companies is often essential in order to be able to participate in larger tenders and achieve the necessary critical mass.
• Focus on specialization and innovation: SMEs should play their strengths in niche markets and the development of innovative solutions in the skill and technology areas priorified by the white book (e.g. KI, quantum, cyber, drones, specialized components).
• Investment in skills: The structure and further development of internal skills required for future fields such as AI, quantum technology and cyber security are crucial. Cooperation with universities and research institutions can support.
• Clear communication of the value contribution: SME should confidently communicate your specific contribution to European security, technological sovereignty and industrial basis. This is important to both potential clients and financiers.
• Use of platforms to represent the interests: Events such as the SME Europe Event should be actively used in order to network with political decision -makers and other actors, to put their own concerns and to participate in the design of the framework conditions.

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On the way to a resilient and innovative European defense union, including the SME

Summary of the most important knowledge

The analysis of the “Joint Weißbuch on European Defense - Readiness 2030” and the associated implications for small and medium -sized companies in the European defense sector leads to several central findings:

• The white book marks an unmistakable paradigm shift in European defense policy. In view of a strategic environment that is rapidly deteriorating, it is aimed at massive increasing European willingness to defend and expenditure. This has far -reaching financial, industrial and technological implications.
• Small and medium -sized companies (SMEs) are explicitly recognized in the white book and in the accompanying political discussions as innovators and important components of the European defense industrial exposure (EDIB). Their agility, specialization and ability to develop disruptive technologies are considered essential for the future competitiveness of Europe.
• Despite this recognition, SMEs continue to face significant challenges, especially when accessing financial resources, qualified specialists and complex procurement markets. These hurdles must be actively addressed to raise the full potential of SMEs.
• The new EU instruments (such as safe and almost), the planned Omnibus Ordinance and the increased role of EIB offer considerable opportunities for SMEs. At the same time, however, you also cover the risks of unintentional marginalization, especially if the measures are primarily tailored to large system integrators or if the specific needs of SMEs are not sufficiently taken into account when designed.

The future role of SMEs in European defense

The successful integration of small and medium-sized companies is not an ancillary aspect of the European defense agenda, but a critical prerequisite for the success of the “Rearm Europe” strategy and the establishment of a resistant, innovative and competitive European defense union. SMEs are not only suppliers of components, but often the germ cells for those technological breakthroughs that Europe needs to achieve its security -political goals and to maintain its technological sovereignty.

A continuous and structured dialogue between political decision-makers at the EU and national level, the large industry and the SMEs is crucial for success. Events such as the upcoming working meeting of SME Europe play an important role here by offering a platform for exchange, feedback and the joint development of solutions.

Strengthening SMEs in the defense sector will not only increase the security of Europe. As the Weißbuch indicates in its conclusion, it will have positive spill over effects on innovation, economic growth and the creation of high-quality jobs throughout the European Union. The path to a real European defense union based on strength and unity leads to the consistent integration and promotion of their most agile and most innovative actors: the small and medium -sized companies. The coming months and years will show to what extent the ambitious plans of the white book can be implemented into concrete, SME-effective measures.

Markus Becker

I would be happy to serve as your personal advisor.

Head of Business Development

Chairman SME Connect Defense Working Group

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Konrad Wolfenstein

I would be happy to serve as your personal advisor.

contact me under Wolfenstein ∂ Xpert.digital

call me under +49 89 674 804 (Munich)

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