Small companies in defense will be able to receive European funding in four months to test their technologies.

The European Parliament and the Council have agreed on a 115 million euro program for start-ups and small enterprises developing defense technologies. Selected projects will receive funding more quickly, access to testing centers, and support to move from prototype to products used by armed forces.

Small and medium-sized enterprises and European start-ups developing defense technologies will be able to receive grants within a maximum of four months and quick access to testing centers through a new 115 million euro program agreed upon by the European Parliament and the Council.

In short

The European Parliament and the Council have reached a provisional agreement on the AGILE program, which will fund small and medium-sized enterprises, start-ups, and expanding companies. The program targets emerging and disruptive technologies, such as artificial intelligence, robotics, cyber systems, quantum technologies, and space applications for defense.

Selected companies are expected to receive funding within a maximum of four months and to be able to use testing, experimentation, and certification facilities more quickly. The program will connect small firms with large companies in the defense industry and will simplify the procurement of products developed with European funds.

The agreement must be formally approved by the Parliament and the Council, then legally and linguistically verified. The regulation will come into force 20 days after publication in the Official Journal of the European Union, and the program is expected to start at the beginning of 2027.

The program for agile and rapid innovation in the field of defense, known by the acronym AGILE, is aimed at firms that can quickly develop new products but face difficulties when trying to transition from prototype to production and operational use.

The budget of 115 million euros will be used for grants awarded through an accelerated procedure. The Parliament and the Council have maintained the four-month deadline proposed by the European Commission between the submission of an application and the granting of funding.

The program will focus on small and medium-sized enterprises, including start-ups and rapidly expanding companies. These firms often develop solutions in artificial intelligence, robotics, cybersecurity, communications, quantum technologies, and space systems, but have fewer resources for testing and certification than large companies in the defense industry.

AGILE will also be able to fund the adaptation of civilian technologies for military uses. A company developing sensors, software, drones, communication systems, or autonomous equipment for the civilian market could receive support to modify and test them based on the requirements of the armed forces.

Member states will be able to participate in setting the technological challenges that the program seeks to address. This involvement must direct funding towards the needs identified by national armies and reduce the risk that supported projects remain without users after the development is completed.

One of the main issues for small firms is access to facilities where products can be tested in conditions close to military use. The agreement provides for an accelerated procedure for using testing and experimentation centers, as well as access to certification.

The program will also organize activities through which small enterprises will be connected with large companies that dominate contracts in the defense industry. These collaborations can allow the integration of a technology developed by a start-up into a broader system, produced or delivered by a company with access to military contracts.

The Parliament and the Council have also agreed on simplifying procurement for products supported by AGILE. The institutions have not yet published the complete details of the procedure, but the goal is for the funded technologies to be able to be purchased more quickly by member states.

The program appears in a context where technologies with short development cycles have become more important for military operations. The European Parliament has explicitly linked the initiative to the war launched by Russia against Ukraine and the rapid use of drones, software, autonomous systems, and electronic warfare means.

"Europe cannot afford to be slow when the threat is fast," said Ivars Ijabs, the Parliament's chief negotiator for the Committee on Industry, Research, and Energy. He stated that the program must distribute funding quickly and reduce administrative burdens for innovative companies.

Tonino Picula, the chief negotiator of the Committee on Security and Defense, stated that the agreement must accelerate the transition from innovation to the actual use of products and limit dependencies on suppliers outside the partner states of the European Union.

AGILE will complement existing European programs for the defense industry, which primarily fund larger projects developed over longer periods. The new instrument has a smaller budget but is designed for projects that can advance quickly and respond to urgent needs.

The Council believes that the results of the program will be able to support the growth of funding for small firms in the next multiannual budget of the European Union. The multiannual financial framework is the EU's seven-year budget and sets the limits for European spending in each area.

The Parliament and the Council must formally approve the agreement before the regulation is adopted. The text will then go through legal and linguistic verification, and the program is scheduled to become operational at the beginning of 2027.

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