Good morning. It’s great to see you all.
Let me start by thanking Germany for hosting our conference this year.
And for being a major driver in technology and innovation.
Let me also thank all of you for being here and for joining us at this NATO Industry Forum. A very important platform for strengthening the cooperation between NATO, NATO allies and Industry which is so important for the whole Alliance.
I would also like to thank commissioner Elżbieta Bienkowska for being here today I think that’s a great example of how we are strengthening the cooperation between the European Union and NATO.
The NATO-Industry Forum plays a critical role in our long-standing engagement with industry.
And it is important that we continue to work hand in hand as we prepare for the future.
You are helping NATO to translate our standards and capability targets into practice.
Meeting you gives us all a clearer picture of how to increase our cooperation.
This is especially important as NATO continues to adapt to fast-changing security challenges.
At the Brussels Summit in July, we took significant steps to further bolster deterrence and defence.
With a new readiness initiative – Which we call the Four Thirties:
30 mechanised battalions
30 air squadrons, and
30 combat vessels
Ready to use within 30 days or less.
And this readiness initiative comes on top of all the other things we have done to increase the readiness of our forces. With tripling the size of the NATO response force and also by the fact that for the first time in our history we have combat ready forces, four battlegroups in the three Baltic Countries and in Poland and we also increased our personnel in the South East of the Alliance. So we are now in the midst of the biggest adaptation of the Alliance since the end of the Cold War and working with Industry is an important part of that adaptation.
We also decided at the Summit in July to adapt our command structure.
With a new Atlantic command in Norfolk, Virginia.
And a new command for support and logistics here in Germany in Ulm.
Both commands will help our forces become more mobile enabling rapid reinforcement within the Alliance ensuring the right forces in the right place at the right time, with the right readiness.
For our forces to be ready, they must be well-trained but also well equipped. And again the Industry is key to make sure we have the right equipment.
Our biggest exercise since the end of the Cold War, Trident Juncture, Has been taking place in Norway.
All 29 Allies participated.
Along with our closest partners, Finland and Sweden.
This is a defensive exercise.
Not directed against any country.
But it sends a clear message to any potential adversary that NATO is there to protect and defend all Allies. That we have the resources and capability to do so and by doing that we prevent conflict.
Trident Juncture included around 8,000 German troops. Because Germany will lead NATO’s Response Force next year. And through Trident Juncture we were able to test and certify the German troops being the lead troops for Very High Readiness Joint Task Force in 2019.
And it also included thousands of troops from the United States and Canada.
Demonstrating the enduring strength of bond between Europe and North America.
Trident Juncture was also a showcase of NATO’s ability to innovate.
From micro-drones and robotics to 3D printing.
For instance our commanders noticed that vehicles were breaking down more frequently due to the cold. It was actually not so cold but it was colder than in Brussels. It can be cold in Norway, that’s what I’m trying to say.
We started using 3D printing to make spare parts. These could be distributed immediately so we avoided the wait for spare parts to arrive from distant suppliers.
We also tested one of the smallest drones in world. A drone which can see in the dark.
Many of these technologies are about reacting and responding more quickly, seeing further and detecting threats well in advance.
Technologies like these could change the way we protect troops and conduct our operations.
We must continue to ensure that our skills and equipment are second to none.
NATO is likely to shape future of the defence industry in many different ways.
But let me mention three:
How much Allies spend on defence.
What we spend on.
And how efficiently we spend the money we have.
First, how much we spend.
As you all most likely know, we made a defense investment pledge at the Summit in Wales, in 2014. We promised to stop the cuts, gradually increase, and then move towards spending 2% of GDP on defence within a decade.
And to be honest, just to be able to stop the cuts was a great promise. Because you have to understand that the starting point was that almost all Allies had cut defence spending, almost every year, for many years, since the end of the Cold War.
At the end of the Cold War we spent almost 3% of GDP that was the normal level of spending across Europe. 3% of GDP on Defence.
And now we are below 1.5%.
And it is extremely difficult to get political support on Defence because then you have to spend less on something else. It is easy to be in favour of spending more on something, it is much more difficult to identify what will get less, or to advocate for higher taxes.
So actually, just to stop the cuts was really a change. We have delivered, meaning that all Allies have stopped cuts, all Allies have increased.
And more and more Allies meet the 2 % target. And the majority of Allies have put forward a credible plan to reach 2% within a decade.
We also have to remember that we did not promise 2% next year, we promised within a decade.
So I am not saying we have delivered everything we shall already but I am saying that the whole Alliance have really turned a corner from reducing defence spending and now starting to increase defence spending. We have made significant steps in the right direction. The picture is still a bit mixed but at least it is much better than it was just a few years ago. In 2014 it was three Allies who met the 2% guideline now it’s 9 Allies. And the majority has put forward plans to be there within a decade.
So we will continue to address the issue of Defence spending.
This year European Allies and Canada have boosted their combined defence budgets by 5.2%
And just over past two years, those same countries have spent a cumulated US$41 billion more on defence.
We will have the national plans by the end of the year. And how to reach the 2% guidelines will be discussed by Defence Ministers next February so we must keep up the momentum.
If all European Allies and Canada met the 2% spending guideline, that would mean an extra 100 billion dollars every year for defence across Europe and Canada. That is roughly the equivalent of the combined defence spending of the United Kingdom and France.
So we speak about big money and this is also money that will sooner or later end up in the defence industry. At least some of it, not all, because we have to pay some salaries to the soldiers too. But a lot of it will be spent on equipment and research and development.
This will ensure Alliance remains at the leading edge of military technology in a world remains competitive and unpredictable.
The second way NATO is shaping the future of defence industry is: what we spend money on.
What capabilities we buy and for what purpose.
Allies have committed to invest 20% of all defence spending on major equipment.
Including related Research and Development.
In fact, this year NATO Allies are expected spend over 250 billion US dollars on major equipment.
And associated Research & Development.
More than 60 billion will be invested by European Allies.
Which represents an increase of some 10 billion over the last year.
And even more expected in the coming years.
To make sure our armed forces have the right quantity.
But also the right quality of equipment.
We identify priorities for defence across the Alliance.
And provide guidance to nations about where they should direct their investments.
This is actually one of the most important thing NATO does and this is what we call the Defence Planning Process where we identify the different capabilities that different Allies are supposed to deliver into our collective defence efforts.
We need to maintain an advantage in key areas such as Joint Intelligence, Surveillance and Reconnaissance.
The alliance Future Surveillance and Control system.
Our Ballistic Missile Defence system.
And Alliance Ground Surveillance.
These projects are funded together, planned jointly and implemented cooperatively.
By several or all Allies.
And they bring together industries from both sides of Atlantic.
We also need to stay on top of new wave of technology.
Like artificial intelligence, machine learning, future computing techniques, and big data. This is a great challenge because we are challenged not only Russia but also China in these domains.
Restructured NATO Command Structure, we are setting up a Cyber Operations Centre in Mons, Belgium.
But we depend on our industry partners help stay ahead.
For example in the cyber domain we partner closely with industry to enhance capabilities.
So we can respond to increasingly complex cyberattacks.
Germany is a good example.
With the creation of Agency for Innovation on Cybersecurity.
Let me turn to the third point:
And that is how efficiently we spend our defence dollars, euros, pounds, and krone.
Many of you will have heard me say this before, but we must address the fragmentation of our defence industry, especially in Europe. We can and we must achieve greater efficiency by working more closely together.
For instance in Europe there are 17 different types of main battle tanks.
In the United States there is only one.
In Europe 13 different types of Air-to-Air Missile.
United States has three.
And European nations 29 different types of naval frigate.
United States has four.
This is something I addressed. But I also appreciate or welcome the fact that European leaders have addressed this again and again, the fragmentation of European defence industry. Difficult, political and sensitive but we need to address the challenge in one way or another.
By planning and spending together, we spend smarter.
For decades, through the tried and tested NATO Defence Planning Process.
We define requirements and set capability targets.
For individual Allies. And for NATO.
Better coordination of Allies’ requirements allows us to move forward on key capabilities.
Like precision-guided munitions.
And air-to-air refuelling.
We also coordinate capability development with the EU.
And I welcome the renewed initiative by the EU leaders to strengthen cooperation with industry.
This is an important element of the EU’s Global Strategy and the European Defence Action Plan.
It is essential that we work together to ensure new EU initiative is fully coordinated with NATO.
Which is one reason I very much welcome presence, once again, of Commissioner Bienkowska at this Forum.
Elżbieta, your participation underscores your commitment to transparency and collaboration with NATO.
And I appreciate that very much.
It is important for NATO and important the European Union.
NATO has long history of working with industry partners.
Which is underscored by the fact that NATO Industrial Advisory Group is celebrating its 50th anniversary.
It is essential we continue to work closely together.
Now and for many decades to come.
I put my trust in knowledge, skills and ingenuity of our partners in industry and academia.
Industry is full of extraordinary people.
By harnessing their talents and ideas.
By putting the most advanced technologies in hands of our brave men and women in uniform.
And by working effectively and efficiently together.
We will continue to defend our countries, uphold our values and preserve the peace.
So I wish you a successful debate at this Forum.