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France to Increase Investment in SMEs

Focus on national sovereignty interests
Speaking to the fifth annual Innovation Forum organised by the Direction Générale de l’Armement (France’s defence procurement authority) at the École Polytechnique near Paris last week, Defence Minister Jean-Yves Le Drian announced a further investment initiative to support French small and medium sized enterprises (SMEs) in the defence technology arena.
The defence and finance ministries are discussing the establishment of an investment fund of “several million euros” to invest in SMEs that have a “national sovereignty interest,” the minister said. The fund, to be set up in the first quarter of 2017, will identify strategically relevant companies and seek minority equity stakes to “support and guide their development.”
Mönch Comment:
Both France and Britain have active and far-sighted programmes of support for SMEs, though finding sufficient funding is difficult for both ministries in current austere budget circumstances. India is also starting to encourage smaller companies with strategic or innovative assets for aerospace and defence, though the current focus is, to be honest, on gaining knowledge and technology transfer for the larger, better-established concerns.
The French defence ministry has pushed for more investment in SMEs for some years, pointing to the underlying support such companies give to the export of French defence products and services, which last year amounted to almost €17 billion. In the UK, the Centre for Defence Enterprise has a number of programmes aimed at stimulating and encouraging SMEs.
Funding, support for R&D and moral encouragement are laudable government activities and go a long way towards increasing the health of this segment of the industry. But more is needed: particularly in streamlining and perhaps even short-circuiting the tedious and frequently daunting process of pre-qualification, qualification, certification, compliance – the ‘red tape’ beloved of old-style bureaucracies. Innovation in development needs to be matched by innovation in the acquisition process, otherwise the SMEs – more often than not run by driven visionaries, who are not renowned for patience as a breed – find another outlet, more easily penetrated, for their companies.

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