Despite difficult conditions on a growingly turbulent global naval market – mainly caused by rising exports from Chinese, Russian and South Korean shipyards – Europe’s naval industry has managed to maintain its position as a highly competitive global player if not a world leader, notably thanks to its technological edge and strong exports, the EDA-commissioned ‘Study on Industrial and Technological Competences in the Naval Sector’ concludes.
The study, which was carried out by a consortium in 2015 and early 2016 (see box below), confirms that European naval industries are very strong in their respective domestic European markets – but also in international markets such as the Middle East, Africa, Asia and Latin America which all devote growing budgets to defence and often have no meaningful indigenous naval industry. Also due to decreasing defence budgets in Europe (at least over the past decade, whereas the trend has now started to reverse), export markets nowadays account for 42% of the European naval order book value.
Healthy successful industrial base, but…
Another positive characteristic of the European naval industry, according to the study, is its ability to design, integrate and produce the whole range of naval ships and almost the totality of its core systems and components. “Considering the complexity and sophistication of the products designed and built by these companies, they can be regarded as ‘system integrators’, dismissing once forever the old image of shipbuilders as mere assemblers of steel blocks”, it says.
The European naval industry’s supply chain is also considered both diverse and complete with no area in which a monopoly exists. Most importantly (with regard to Europe’s strategic autonomy in defence) there are European alternative suppliers and replacement options in place for all systems/components currently procured from outside Europe.
Business diversification is another trump card played by the European naval industry. The majority of the naval players are also successful players in the high-end segments of merchant shipbuilding (e.g. cruise ships and mega-yachts) and in the related maritime activities (e.g. offshore and marine renewable energies). “This diversification strategy has created a favourable cross-fertilization between civil and military technologies (dual-use technologies), both at the Prime Contractors and at the Supply-Chain levels, leading to cost-effective designs and solutions”, the study says.
The study’s overall conclusion could hardly be more encouraging: “The European Naval Industrial Base today is made up of healthy, capable, diversified and successful export-oriented companies”.
…more R&T investments needed
However, all forecasts in the study are not entirely rosy. The study also warns that some threats stemming from non-European competitors are on the horizon such as fierce price competition from non-EU countries, especially China, South Korea and Russia. Countries which very actively support their naval industries “as an act both of foreign and industrial policy”.
According to the study, the best way to counter this threat is by maintaining Europe’s technolog-ical lead at the Prime/System Integrators level as well as across the full supply chain “through increased, more supported, more coordinated and more focused investments in Research, De-velopment and Innovation (RDI) at national and European level”. In order to increase intra-EU cooperation in the naval defence and security domain, a dedicated area for naval related re-search should be secured within the next multi-annual Framework for Research, Development and Innovation starting in 2021, the study recommends: “This is essential to the long-term sus-tainability of the European naval industry”.
The European Commission’s upcoming Preparatory Action (PA) on defence-related research and the Defence Action Plan (scheduled for later this year) could also play a key role as political frameworks to increase the resources devoted to defence research activities, including in the naval domain, the study concludes. “Here, a distinct role of overall coordinator is foreseen and advocated for the EDA”, it says. The study also pleads for a regular exchange of ideas between the EDA and the major players in the naval shipbuilding sector in order to better coordinate and integrate the objectives of the future R&T programmes in this field.
Finally, the study has also led to a list of technologies considered of “primary importance” both to maintain the European competitiveness and technological lead and to ensure the required level of operational superiority. In total 13 high priority topics and 4 new items were identified.
The high priority list includes surface technologies topics (virtual ships, simulation, mainte-nance, oceanography, environmental protection, supply & support), subsea technologies (hydro-dynamics and UxV integration, modularity, UxV integration, vulnerability reduction, propulsor) as well as services and transversal technologies (uninhabited systems, propulsor & propellers).
The identified new R&T topics to be focussed on in the future are 3D printing, high capacity bat-teries, augmented reality and drones.