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Preface to the Special Issue from the editors
The post-Cold War world is changing rapidly. The COVID-19 pandemic, the Russian invasion of Ukraine in 2022, the military operation of Azerbaijan in the Nagorno-Karabakh and the renewed Palestinian-Israeli conflict are just manifestations of such rapid change. The European Union (EU) had already begun to increasingly focus on defence and security – including industry and procurement – before this series of consecutive crises and security concerns in Europe and worldwide. The paradigm change began with the Russian annexation of Crimea in 2014. This continued with “Brexit,” which implied losing a major partner in EU defence and security. Then, the COVID-19 pandemic disrupted life and economics, draining away resources from all other sectors (including defence). Subsequently, Russia’s full-scale invasion of Ukraine on 24 February 2022 was a major wake-up call for European decision-makers, who quickly had to realize that security and defence must not only be stepped-up but also become more integrated and expanded in the European level, including and possibly starting with the defence industry. The launching of the European Defence Fund (EDF) and the creation of the Permanent Structured Cooperation (PESCO) until the recent proposal of the Commission to establish common procurement were tangible signals of the possibilities opened by the renewed security landscape. Even though they represent important evolution of practice in the European contest (i.e. the Parliament devoting resources to defence in 2014, the indirect support to Ukraine via the European Peace Facility (EPF), etc.), they now seem awfully “too little, too late,” and with largely unclear connections to NATO. The current state of affairs means that security in Europe will soon likely have a rather different structure – in terms of policy, planning, organization, and industrial innovation.
Our special issue addresses a number of highly salient issues pertaining to contemporary developments of the European security and defence industrial landscape. More specifically, contributions concern the status of the defence market of EU member states including innovation and concentration; the investigation of the state of the art of the European market for defence through the implementation of the precursor programmes of the EDF; the security-defence nexus, military-civilian connections, and dual-use policies of the EU and its member states; outer space, cyber, and critical infrastructure as increasingly salient domains of the European defence architecture.
If Europe, while still committed to Trans-Atlantic partnership and alliance, would also be capable of “strategic autonomy” as many European leaders seem to demand, such a goal can be achieved only if supported by a technologically advanced and highly integrated defence and security industry. This special issue hence aims at shedding some light on the feasibility of such scenarios and what an integrated European defence will be like. In this special issue, we collected data from several European countries (incidentally all EU member states) and managed to identify key actors and networks that qualify for a “common market for defence.” Moreover, we explored the evolving role and, potentially, changing practice in the relation between EU institutions and the wider topic of defence.
It is evident that the whole European security and defence realm is at a crossroad; there is an urgent need to rethink how common defence may more efficiently function, beginning with its funding instruments and its financial profile. The future of the European defence seems directly consequential to decisions made by the Europeans today.
The special issue is the result of a three-year research project, funded by the European Investment Bank (EIB) to take stocks of what was the positioning and structure of the whole European defence sector, before the crisis series started, in 2018. The goal of the project was first to assess the dimension and articulation of the European defense sector, and second, to provide some understanding of how technology transfer and innovation may move from the defense to the civilian sector. Overall, from the European (that is, as a whole) standpoint, this was, indeed, a rather understudied topic, as not much has globally been published. This is the intellectual deficiency that we hope this special issue will help to correct.
The structure of the special issue
This special issue on European defense presents a comprehensive exploration of the multifaceted landscape that is crucial not only to the European Union’s security but also to the industrial prosperity of its member states and the future of an EU market for defence. We have seven contributions, each offering a unique perspective on European defense, creating a mosaic of insights into this complex field.
In the first article, the groundwork is laid for the subsequent discussions by addressing a fundamental challenge: the scarcity of reliable data on the European defense industry. The authors acknowledge the laborious process of understanding this sector, where data is often contradictory and fragmented, and where comparisons are typically made at the national rather than European level. The article offers a fresh approach by focusing on the collection and organization of data related to the geographical concentration and location of EU defense industries. This represents an essential step toward addressing these shortcomings and sets the stage for subsequent research on how these companies contribute to technological integration within the EU. It provides a robust basis for better comprehending the articles to follow in this special issue.
The second article also contributes to detecting the European market for defence through the implementation of the European Defense Fund (EDF) and its precursor programmes. It emphasizes the challenges posed by the lack of a unified European defense structure and highlights the European Union’s initiatives to address this, such as the Coordinated Annual Review on Defense, Permanent Structured Cooperation, and the European Defense Fund (EDF). However, the authors argue that despite these initiatives, a comprehensive understanding of the European defense market’s configuration and its evolution over time remains insufficient. This article endeavors to observe the market’s structure and trends toward consolidation. It identifies a positive shift toward consolidation, while institutional incentives continue to perpetuate market fragmentation. The authors provide a detailed analysis of funding allocation through the preparatory programs of the EDF and present insights from focus groups and expert surveys conducted in the Netherlands, Italy, and Sweden. This article not only offers a deep dive into the European defense market but also points towards areas for future research.
The third article provides a high-level overview of the intricate political and organizational structure of the European defense industry. The authors argue that the rapid development of dual-use technology and the blending of military and civilian dimensions within the broader security industry necessitate a reimagining of the classic military-industrial complex. This perspective offers a unique lens through which to view the evolving landscape of European defense.
The fourth article, meanwhile, tackles a crucial debate surrounding NATO and European defense – the relationship between industry structure, aggregate R&D activity, and the pace and quality of the resulting innovation process. Taking a standpoint rooted in industrial economics, the article adapts these principles to the specific context of the defense sector. It argues for the necessity of increasing the degree of concentration within the industry to enhance standardization, interoperability of defense systems, and the realization of scale economies. Drawing on the tradition of industrial organization theory, the article advocates for increased concentration as a means to boost innovation incentives and mitigate duplications in large-scale R&D projects. It also suggests that this concentration process can be facilitated through research joint ventures and R&D cartels to enhance spillover effects and reduce excessive investments.
The fifth article takes a broader perspective, examining how the changing global landscape, exemplified by the war in Ukraine and the shifting geopolitical dynamics between the United States and China, impacts the demand and supply sides of the European defense market. On the demand side, European countries are adapting their procurement plans to transition from crisis management to strategic competition against peer adversaries, resulting in evolving requirements. On the supply side, European defense industries are adapting to meet these changing demands in the short term while also positioning themselves for long-term innovation. The article investigates the complex interplay between demand and supply in the European defense market and provides insights into the trade-offs between short-term readiness and long-term innovation.
The sixth article delves into the intricate process and outcomes of the review and recast of the EU Dual-use Regulation, which concluded in 2021. This recast was marked by conflicts among EU member states and between the European Council, European Commission, and European Parliament, particularly concerning the expansion of human rights considerations and control of exports of “cyber-surveillance items.” The article offers a unique perspective by framing the recast as a competition between various constitutive and regulative norms grounded in humanitarian, economic, and national security concerns. It also explores the concept of “organized hypocrisy” and views the recast as a set of compromises aimed at addressing competing norms. The article suggests that these frameworks have broader applications for the study of export controls and export control regimes in other contexts.
Finally, the seventh article focuses on the contemporary defense sector, dominated by dual-use technologies with applications in both military and civilian spheres. The trade of these technologies is governed by export controls, effectively securitizing them. The article seeks to understand which actors desire the securitization or desecuritization of technology. This research has a twofold contribution, firstly in understanding defense and security in contemporary Europe, and secondly in identifying the roles of various actors in shaping security discourses around technologies. The article draws on securitization theory and explores EU-level export control regimes, with a case study on the Netherlands, which serves as a representative of smaller European states with a defense sector heavily composed of SMEs.
In sum, these seven articles collectively offer a nuanced and comprehensive view of the European defense landscape. They delve into the intricacies of data collection, market fragmentation, industrial structure, innovation incentives, shifting demand-supply dynamics, regulatory frameworks, and securitization of technology. Together, they pave the way for a deeper understanding of the challenges and opportunities within the European defense sector, setting the stage for a rich exploration in this special issue. Financial support came via the European Investment Bank (EIB) University Research Sponsorship (EIBURS) Action “The Economic Effects of a Joint European Security and Defence Policy” with the 2018-2020 grant “Joint Efforts for the European Defence Industry” (EIBURS-JEDI).
Disclosure statement
No potential conflict of interest was reported by the author(s).