reduces its ability to improve its competitiveness55, with the majority of the cybersecurity companies in the EU being small and medium-sized enterprises (SMEs)56. Having a technologically sovereign industrial capacity is a cornerstone for the EU’s capacity to act. The EU is supporting the development of a strong EDTIB through a range of programmes and initiatives. Whereas the EDF is funding technological innovation for defence and supporting the development of technologies that eventually leads to jointly developed cutting-edge military capabilities and contributes to the competitiveness of the EU defence industry, Horizon Europe and the Digital Europe Programme support cybersecurity research and the development of dual-use technologies including quantum, encryption, secured cloud and AI57. Further actions related to critical technologies for cyber defence and industrial needs as identified by the technology roadmap for critical cyber technologies should be addressed. It is necessary to identify appropriate support streams, for example to stimulate common procurement efforts, such as through the future European Defence Investment Programme, or facilitate access to equity and loans through the European Investment Fund and the European Investment Bank. For a strong EDTIB, exploiting and leveraging synergies between civil and defence companies needs to be ensured. Innovation actions as proposed under the EU Defence Innovation Scheme (EUDIS), including outreach to SMEs and technology scouting, could have a positive impact for the EU defence industry and EDTIB. The Commission will also launch an industry dialogue with the purpose of developing the EU’s cyber defence industry, involving as appropriate EDA. The Commission and the High Representative propose to put in place several measures to make sure industry is equipped to deliver in the short and long terms. This entails, in the immediate term, an in-depth mapping of EU defence industrial manufacturing capabilities, to identify precisely gaps and areas where ramp up is needed. The reduction of critical dependencies in the field of cyber, such as may be identified in technological roadmaps, could also be addressed by the new European Sovereignty Fund announced by President von der Leyen in her September 2022 State of the Union address. The EU Foreign Direct Investment Screening Framework will continue to be used to mitigate the risks of acquisitions of European technologies or solutions that present risks as it comes to defence and security risks. Member States that have not yet set up national screening mechanisms should do so without delay. 3.3. EU cyber defence workforce Europe is facing a real and alarming cyber skills gap, with the European Cybersecurity Organisation (ECSO) estimating a total of 500 000 professionals needed already now in 2022. 55 As identified in the Joint Communication on the Defence Investment Gaps Analysis and Way Forward. The total number of SMEs in the EU, operating in the multi-layered and often trans-border defence supply chains, is estimated at 2 500. They are serving defence domain customers with 7.8% of their business relating to cyber. 57 The Horizon Europe programme envisages that synergies with the EDF will benefit civil and defence research, although activities under the Framework Programme will have an exclusive focus on civil applications. 56 16

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