Among the crucial aspects of defense and security is the increasingly close link with technology and industry, or rather with the ability to develop advanced technologies and reproduce them in adequate quantities and times at sustainable costs. This makes it impossible to imagine a European defense that does not have an equally European industry as a stronghold of capability, a guarantee of interoperability, an opportunity for economic efficiency, and a tool for integration. To meet this need, a strategic vision is necessary that not only includes the industrial dimension but ensures that it truly serves collective security.
Unfortunately, the current situation highlights a serious criticality, with examples ranging from withdrawal from joint programs on the eve of their completion (such as France with the Eurodrone) or the choice of non-EU solutions (such as Spain’s choice of a Turkish jet for advanced training).
In building the future European industrial capability, it appears essential to guarantee four pillars of technological level, actual operational need, technological sharing, and production resilience. The importance of defense and security is necessarily reflected in the technological dimension, both in terms of qualitative levels and industrial capabilities. On the one hand, research and development of various technologies (to name a few: semiconductors, production processes, engines, satellites, and more); on the other, certain supply chains, stable production, quantitatively adequate and quickly scalable in case of necessity.
This requires avoiding the textbook solutions proposed by large consulting firms, but also the parochialism that puts the interest of national champions above all else.
INNOVATION AND PRODUCTION RESILIENCE
Among the most common arguments made for European defense is the alleged inefficiency of multiplying industries. Within certain limits, it is true that given the high non-recurring costs (research and development, testing and certification, setting up production lines, logistical and support infrastructures, etc.), the prospect of “spreading” them over a larger production helps reduce the unit costs of a given system. It is not uncommon for this objective consideration to lead to imagining “rationalizing” the defense and security industry in Europe through concentration into a handful of very large groups by product type (e.g., aircraft, helicopters, ships, military vehicles, etc.). On closer inspection, this line of argument not only shows nostalgia for the myth of the planned economy but also hides several vulnerabilities in terms of innovation and resilience.
First, economic theory teaches that the lack of competition means that monopolies or oligopolies result in less efficient markets. In this specific case, it must be considered that security and defense are a monopsony, i.e., markets dominated by a single buyer. In its most extreme form, where a monopolist sells to a monopsonist, economic inefficiency is compounded by the “revolving door” between buyer/user and producer, with associated ethical considerations. The objection that competition stimulus is still provided by export markets only partially solves the problem: it is clear that in a logic of competition between blocs, the main actors would not be inclined to purchase systems produced by their peers.
Second, the concentration of research and development activities reduces product and process innovation, in a trend completely opposite to what is happening in sectors such as space (with companies like SpaceX and Blue Origin offering access to space with revolutionary times and costs compared to traditional operators) or remotely piloted or autonomous systems. In any case, it is worth reflecting on how the USA first maintained a multiplicity of suppliers in leading sectors (think of Boeing, Lockheed Martin, and Northrop Grumman for military aircraft, or Bell and Sikorsky in helicopters) and today push for procurement regulation simplification precisely to stimulate the entry of new players and, with them, new ideas.
Third, the central assumption of European defense as a necessity to face new challenges – not only geopolitical but also hybrid/asymmetric modes – requires incorporating the variable of resilience into the industrial design. In this sense, the apparent efficiency of a single final assembly line for a given product clashes with its vulnerability to kinetic or hybrid attacks, political crises (from strikes to political unpredictability, with scenarios of detachment from the EU or passive obstruction, as with Hungary), and even natural events. In all these scenarios, to avoid the sudden unavailability of critical industrial resources, it is necessary to have backups in the form of design or production capacity immediately activatable. Fourth, one must consider the intrinsic efficiency of large numbers. In other words, the shift from the reductive post-Wall phase to an expansive revision allows aiming for productions of tens of thousands of units (e.g., for military vehicles) or thousands of units (for aircraft) and making multitasking lines sustainable in terms of efficiency. Further efficiency dimensions can be expected, in many sectors, from the standardization of plants, systems, and ammunition. This is the case for air defense missile systems, where the ammunition (the missile) does not substantially vary in applications launched from air, ground, or naval platforms.
With awareness of the peculiarities of the security and defense sector, economic and strategic doctrine therefore converge on the need for a flexible approach to the logic of efficiency at any cost.
TECHNOLOGICAL SHARING
To the strategic-economic dimensions, the political one must be added, linked to the political repercussions of the costs and benefits of redesigning an advanced industrial sector. It is indeed impossible to ignore how eliminating unnecessary overlaps leads to a distribution of competencies among actors that is not neutral in terms of social impact and development prospects. As is evident, a strongly asymmetric distribution would be as unsustainable as the hypothetical demand for perfect equality. For example, it would not be acceptable to compensate economic participation in the development and maintenance of common defense with the awarding of contracts for uniform tailoring or boot manufacturing. In this extreme hypothesis, moreover, the lack of satisfactory mechanisms to balance the different variables at play would allow propaganda – perhaps externally directed – to present common defense as an industrial monopoly strategy by one country or group of countries, to the detriment of others. Although the goal of overcoming the legendary rigidity of the juste retour mechanisms is well-founded, it is clear that the search for greater economic efficiency cannot result in excluding some countries from leading areas, thus also precluding them from the traditional civilian spillovers of military technologies. On the other hand, even without reaching an impossible “everyone does everything,” it is evident how the harmonious development of the sector on a continental scale increases margins of resilience and political flexibility. Among the possible solutions is the mechanism of second source, with associated mentoring, which pairs the company responsible for a certain component with one or more others capable of building it.
In this perspective, the analysis of supply chains should be understood, ensuring at the same time their continental distribution and general protection. In the first case, the articulation of a given European program in the largest possible number of countries would reduce the risk of instrumental opposition and thus contribute to its stability over the long time frame typical of defense programs. In the second, opening national tenders to competitors from all EU countries should be balanced by mechanisms protecting the weaker subjects and therefore at risk of being swallowed up. Only by respecting these two conditions can technological development and social protection, a pillar of the Union, be pursued together.
POLITICAL AND FINAL CONSIDERATIONS
Since exports constitute a central element of the sector’s economic sustainability, reorganization processes must go hand in hand with the adoption of common regulatory standards for the circulation of defense products and systems within the EU and, above all, for their export.
As in any other field, it is undeniable that creating a single market also requires equal and simplified, or even preferential, regimes for programs internal to the Union. Besides reducing compliance times and costs, this would increase opportunities for competition and innovation. Regarding export, the increasingly multinational dimension must necessarily include mechanisms aimed at avoiding both competitive distortion linked to internal regulatory inequalities and the unilateral veto of one partner to the detriment of all other participants. To the latter aspect, moreover, the second source policy would provide at least partial remedy, both as a pressure tool and as an alternative modality.
To maintain technological competitiveness and production resilience, it is appropriate to avoid concentrating knowledge and production in a few large structures. More than the Airbus or ESA model, to which the French-branded gigantism has imposed costly failures such as the civil four-engine A380 and the Ariane 6 rockets, best practices seem rather to be those of MBDA or Eurofighter, characterized by greater sharing of strategic choices. Similarly, a Soviet-style model, in which one company designs and others produce based on a build-to-print organization, with limited involvement in creating intellectual property and process or product innovation, would not be acceptable as it is not resolutive. The industrial dimension is not only the technical tool through which to implement strategic lines but also offers an important contribution to the concrete construction of a European political space. Just think of the political and security implications of creating mutual dependence to understand how much this relies on the guarantee of a solid relationship over an indefinite time, as it is no longer possible to assume this with the United States.
