Reinforcing Small MS' Defense Industry Within EDTIB in the Hungarian Case Study Presented by: Dr. Varga Date: 13 June 2024 Hungarian Defense Industry Is A Unique Case - - Building out of scratch: • ca. 2,000 employees (315,000 in Europe) • 30-40 meaningful companies in total, mostly SMEs • no supply chain • no tie-in to European networks • hardly any R&D • no meaningful arms export Capacities reconstructed and redeveloped, or just newly established after 2016, as complementary of the comprehensive armed forces modernization program Goals And Realization - Establish Hungarian defense industrial capacities that underpin defense modernization in an integrated way • - Lynx IFV in Zalaegerszeg Integrate procurement with new production sites in Hungary (joint ventures) + R&D&I • Lynx IFV by Rheinmetall Hungary + ZalaZone test facilities - Identify, develop and integrate SMEs into the supply and production chain - Develop a research ecosystem that creates an innovative edge (academia, R&D facilities, labs, start-ups, new technologies) • Lynx IFV + active defense, anti-drone technology, sensors, lasers Goals And Realization - Tie-in to Tier-1 European defense industrial networks • Bringing world-class firms to Hungary to save market entry costs and get access to cutting-edge know-how (Rheinmetall, Airbus) • Acquisitions abroad (Aero Vodochody, Hirtenberger) Defense spending trends, 2014-2024 (-2030) Goals by 2030 - 5,000-8,000 employees - 1.25 billion EUR output (vs. 900 million EUR dual-use export value in 2019) - Having covered the national defense modernization demand (i.e. 163/209 Lynx) - Having established a functioning defense industrial ecosystem - Having established production capacities for arms exports, identified demand (contracted sales) - Integration into European arms industry in some segments