Dr Panayiotis Philimis on building an SME-friendly defence ecosystem

Small and medium sized enterprises (SMEs) play a key role in bringing defence product development into the new era of modern warfare, according Dr Panayiotis Philimis, CEO, CYRIC, who suggests Europe should foster innovation through a more dynamic and SME-friendly defence ecosystem.

CYRIC specialises in developing advanced defence technologies and products that enhance security, operational effectiveness and defence capabilities. They include multirotors, fixed-wing UAVs and vertical take-off and landing (VTOL) UAVs equipped with smart munitions for effective and precise battlefield penetration, leveraging advanced modern warfare technologies.

It also works on unmanned ground vehicles for surveillance and intelligence gathering in hostile territory, as well as robotic systems and AI systems for missions without human intervention and autonomous/semi-autonomous aerial and ground vehicles. Other innovations include automatic stabilisation platforms for warships/military vehicles, along with Ground Control Stations and long-range C2 platforms featuring encrypted communications, anti-jamming techniques and custom state-of-the-art software.

Our part of the world has long been defined by conflict and uncertainty. Why do you believe that it has now become important for Cyprus to invest in the defence sector?

Recent conflicts in Ukraine Syria and the broader Middle East provide insights into the depth of security and defence challenges, underscoring the importance of situational awareness. The humanitarian crisis, which has grown worse during the recent events, along with Cyprus’ geographical location, has raised serious concerns about the security of both Cyprus and Europe’s borders. The ongoing conflicts in Europe and its surrounding regions impose a need for Cyprus to adopt a holistic and adaptive security and defence strategy by investing in local defence companies.

While European defence R&D spending increased significantly – it reached €11 billion in 2023, more than double the amount spent in 2016 – the US and China still outspend the EU. How does this disparity impact your ability to innovate and compete on a global scale? Are there any other structural issues on a European level that need to be addressed?

Beyond increased funding for defence product development, achieving global competitiveness requires a more agile and rapid approach to developing new technologies and products that meet the new era of modern warfare. SMEs play a key role in this transformation, as they possess the agility, efficiency and innovative capacity to drive rapid technological advancements. To this end, Europe should foster innovation through a more dynamic and SME-friendly defence ecosystem to accelerate the development of cutting-edge technologies and strengthen its industrial base.

On a local level, does the relatively small size of Cyprus’ defence cluster present challenges in competing with larger ecosystems or are there unique strengths you can leverage?

Cyprus’ ecosystem is currently small; however, it has been one of the most successful in Europe for competitive R&D projects under the European Defence Fund (EDF). This shows that Cypriot companies are highly innovative and are working on state-of-the-art defence products for the future. Beyond this, the Cyprus defence cluster currently faces many challenges in competing with larger ecosystems that have received considerable investment and funding from their own governments to develop infrastructure and capacity for the production of defence products, as well as receiving large orders for defence products which provides the necessary references for selling globally.

Cyprus is strengthening its defence ties with nations like the US and France and aims to allocate 2% of its GDP to defence spending. Has this impacted your work? How can Cyprus become a key player in Europe’s defence ecosystem?

Collaborations with nations like the US and France are very important, enabling the Cyprus Defence Ministry to adopt best practices and enhance the development of the local defence ecosystem. In addition, collaborating with major defence companies in the development and supply of components and systems is essential to boost local defence companies.

Finally, as drones, robotics and AI take centre stage in the theatre of modern warfare, what do you see as the next defining innovation?

Future warfare will likely revolve around autonomous swarming systems and directed energy weapons, integrating advanced algorithms into machines, areas on which our company is currently focused. AI-driven swarm warfare is a game changer in battlefield dynamics, as it enables autonomous coordination among airborne, land, surface and underwater systems. These swarms can operate with minimal or no human intervention, executing reconnaissance, electronic warfare, stealth operations and precision strikes while overwhelming enemy defences through adaptability and numbers. Laser and microwave-based directed energy weapons utilising advanced AI algorithms, will shift air and missile defence capabilities, allowing for the rapid, cost-effective engagement of multiple threats.

Collaborations

CYRIC has extensive experience in research and innovation projects funded both by the Republic of Cyprus, via the Research and Innovation Foundation (RIF), and by the European Union, primarily through the HORIZON Europe and European Defence Fund (EDF) programmes. Specifically, CYRIC coordinates two domestic dual use programmes supported by the Ministry of Defence and participates in five projects funded by the EDIDP/EDF in collaboration with the Ministry of Defence.

This Cover Story feature was first published in the February edition of GOLD magazine. To view it click here