Despite being a great unknown, the Defense sector is a strategic sector for the socioeconomic development of Spain, being essential for the strengthening of the industrial and technological base. Companies with recognized international prestige that have weathered the impact of Covid by maintaining their commitment to R&D and are now facing a decisive moment in which several large draft tractor projects (8X8 wheeled combat vehicles, F-10 frigates, F-Cas fighter …) and European funds can catalyze the journey towards digitization.
All these aspects will fly over Feindef, the great event in the sector, which will be held between November 2 and 4 at Ifema. The meeting point to analyze opportunities and challenges of a future towards which progress is made from a good starting point: in 2020 the sector had a turnover of 6,720 million and the total economic activity linked to its companies contributes directly and indirectly to the economy in 8,500 million, which means an impact equivalent to 0.8% of the national GDP, according to data from a recent report prepared by KPMG for Tedae (the employer’s association of the sector) on the economic and social impact of the Defense, Security, Aeronautics and Space industry.
«A year characterized by the pandemic and its effects. Despite the global health crisis, the sectors that Tedea represents have been resilient contributing 16,500 million to Spain’s GDP in 2020, 1.5% of the total », highlights Jorge Sainz, Deal Strategy partner of KPMG in Spain. “This sector not only has a key direct contribution, it has a significant knock-on effect on other industries. An additional indirect impact of 2,700 million must be added to its turnover, as well as an induced impact of 1,400 million ”, highlights the consultant. In addition, at the level of job creation, the Defense sector has a multiplier effect of 2.9, so that the 23,000 direct jobs hold more than 69,000 additional jobs indirectly and induced.
The pandemic led to a 6% contraction in the consolidated billing of the Defense sector, below the fall experienced by the Tedea industries as a whole (19%). This sector reduced its investment in R + D + i by 4%, “which translates into a lower contraction than at the income level, confirming the sector’s commitment to continue developing”. As a whole, Tedae industries invested directly more than 670 million last year, 10% of its turnover. «In particular, defense aeronautics has a particularly relevant role, with a investment of 480 million (70% of investment in R + D + i in the Defense sector), even though investment in R + D + i between 2019 and 2020 increased by 6%, despite the contraction in billing, “explains Sainz.
The sector is in good health thanks to the work done by the companies. Indra, for example, leads Spanish participation in European Defense programs and, within them, it is part of twelve consortiums of the EDIDP (European Defense Industrial Development Program) program, coordinating three of them. The company recalls that its technological product (radars, electronic defense, command and control, mission systems, etc.) is highly recognized, as well as its ability to tackle complex projects around the world. As highlighted Ignacio Mataix, CEO of Indra’s Transport and Defense business, the firm “is among the leaders in its sector according to the EU Industrial R&D Investment Scoreboard. Only in 2020 has dedicated 265 million to R + D + i, which represents an innovative effort on sales of 7.8%, the highest of the company in the last decade, despite the Covid crisis. If we take into account the last six years, the investment figure in R + D + i exceeds 1,200 million and since 2000 it has reached a cumulative investment of 3,157 ».
The Spanish multinational has numerous defense projects, one of the most outstanding being the development of one of the most advanced air defense radars in the world for the Air Force. 3D lance, prepared to detect any type of target », Mataix says. Furthermore, these radars are a central element of the NATO air defense network “which protects the airspace of the whole of Europe against all kinds of threats”. Another program in which Indra works is the NGWS/FCAS, the new European combat air system, of which he is the Spanish national industrial coordinator. Within the program, Indra leads the Sensors pillar.
Mataix believes that the Defense industry has a lot to contribute to the Spanish reindustrialization strategy, «Since it is an eminently technological sector, intensive in R&D, with high tractive capacity, high export rates and an important generator of highly qualified employment, with an emphasis on technical or STEM training, the most requested in Europe. The sum of these factors explains its multiplier effect on national economic activity: each euro invested in Defense generates 2.5 euros in the economy as a whole ”.
International companies are also betting on Spain. The French company Thales has a recognized experience as a provider of defense technologies and a great knowledge of the challenges and challenges faced by the Spanish Armed Forces. “Thanks to the quality of our sensors (sonars, radars, etc.), as well as our communications and command and control systems, we are developing comprehensive systems that serve as the basis for digital transformation, applying the key technologies of digital transformation (‘big data, artificial intelligence, connectivity-BIoT and Cybersecurity) ”, explains the company’s spokesperson, Francisco Simon. Thales Spain is also evolving its Production and Maintenance Center incorporating Industry 4.0 technologies and in particular ‘blockchain’ technology to improve the monitoring and security of avionics equipment such as Display Keyboard Unit del NH-90 (DKU) that is produced in the Center of Leganés. “Having a production and maintenance center capable of manufacturing high-tech defense equipment allows the group to host production transfers such as the TUUM-6 Submarine Telephone with which the F-110 frigates will be equipped,” he says. .
He considers that the most powerful sectors of the industry are its engineering with the capacity to design, develop and engineer information systems based on software and the capacity to integrate sensors with communication media. In this section, Thales has been integrating its own developed command and control systems with sensors and communication equipment such as combat radio for 25 years. “The permanence of this competitive advantage depends on the investment capacity of the national client in particular in the capabilities of Information Systems and tactical communications that will benefit the National Industry”, highlights Simón. Thales Spain exports its solutions developed locally for its international clients. A firm commitment to our country, although the main challenge, Simón acknowledges, “is in the defense investment capacity in Spain, which limits the quantitative growth of Spanish defense companies, although not the qualitative one.”
Emerging companies with great innovative capacity also stand out in the industrial fabric of the sector. An example is Escribano Mechanical and Engineering, which offers defense solutions entirely manufactured in Spain. It is a partner of the Armed Forces, “proposing solutions for the three army corps and their joint units. Our mission, as a Spanish defense industry, is provide state-of-the-art technology, with products one hundred percent Spanish, that generate wealth, quality employment and that continue on the already open path of international competitiveness of our products and solutions “, says its CEO, Angel Escribano,
This Spanish company has established itself as one of the leading national manufacturers in the sector thanks to its commitment to innovation and engineering, “with state-of-the-art facilities and a continuously expanding product catalog. We have been able to adapt over the years to the needs of the sector based on the concept of Industry 4.0 and implementing it throughout the company’s value chain ”, says Escribano. One of the company’s biggest leaps was in 2011, when they began to offer their customers complex solutions tailored to their needs, designed and manufactured in-house ”. Currently Escribano Escribano M&E faces great challenges such as participation in the program VCR 8×8 Dragon. They also collaborate with the Army in the modernization of the Pizarro FASE II vehicles, installing new driving cameras that improve the vision and situational awareness of the vehicles.