Evolution of the European Defence Industrial Ecosystem. Geopolitical and Technological Drivers

Descripción

Europe is not immune to the growing geopolitical confrontation among major powers, marked by high‑intensity military conflicts and the expanding impact of hybrid warfare. The invasion of Ukraine made evident the urgent need for Europe to strengthen its defence industry by developing and adopting emerging technologies for military purposes, enabling faster and more effective responses.
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This book aims to provide a combined geopolitical and technological perspective on the current global landscape of the defence sector, as well as plausible evolutionary scenarios for the next decade. These two dimensions intertwine in complex ways to shape the future. For that reason, analyses of common European defence policy should be approached from an ecosystem perspective, rather than through isolated national viewpoints.
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I am fully aware that unpredictable events may alter the course of European history, just as technological disruptions arising from scientific advances may fundamentally reshape the foundations of military superiority. Addressing these challenges requires rigorous analysis and the committed involvement of all key stakeholders. I hope this book contributes meaningfully to that urgent endeavour.

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Europa no es ajena a la creciente confrontación geopolítica entre las grandes potencias, marcada por conflictos militares de alta intensidad y la expansión de nuevas formas de guerra híbrida. La invasión de Ucrania evidenció con claridad la urgencia de reforzar la industria europea de defensa mediante la adopción de tecnologías emergentes que permitan responder con mayor rapidez y eficacia.
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Este libro nace con el propósito de ofrecer una perspectiva conjunta —geopolítica y tecnológica— sobre la situación actual del sector de defensa a nivel global, así como posibles escenarios de evolución para la próxima década. Ambos factores se entrelazan de manera compleja para moldear el futuro, lo que exige abordar las políticas de defensa común desde una visión ecosistémica y europea, más allá de los enfoques puramente nacionales.
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Soy plenamente consciente de que los acontecimientos imprevisibles pueden alterar el rumbo de la historia europea, al igual que las disrupciones tecnológicas derivadas de nuevos descubrimientos científicos pueden transformar los fundamentos de la superioridad militar. Afrontar estos desafíos requiere análisis rigurosos y la implicación decidida de todos los actores relevantes. Confío en que este libro contribuya a esa tarea urgente.

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Contents

PROLOGUE. 15

EXECUTIVE SUMMARY. 19

PREFACE: WHY WRITE THIS BOOK AND WHY DO IT NOW.. 31

Deep changes in the geopolitical context. 31

Opportunities in the evolution of defence budgets. 34

Interrelated levels of competence. 37

Look at the Future: What to do. 38

1. INTRODUCTION.. 41
2. PUBLIC POLICY DEVELOPMENTS IN THE EU DEFENCE SECTOR. 47

2.1. EVOLUTION OF EU INNOVATION PERFORMANCE. 47

2.2. EVOLUTION OF EU DEFENCE BUDGETS. 49

2.3. PUBLIC POLICIES FOR DUAL-USE TECHNOLOGIES. 59

2.4. TECHNOLOGY CHALLENGES FOR EUROPEAN DEFENCE. 63

2.5. GLOBAL FRAMEWORK OF DUAL USE TECHNOLOGIES. 76

2.6. TRANSFORMATION OF THE EUROPEAN DEFENCE SECTOR. 85

2.6.1. Towards a “new defence”. 85

2.6.2. The relevance of cybersecurity in the context of the hybrid warfare   94

2.6.3. The progressive militarisation of the space domain. 105

2.6.4. Challenges for new entrants in the defence market. 110

2.6.5. Structure of the European defence sector. 113

2.6.6. Policy balance between strengthening and transformation of the European defence sector. 127

3. COMPARATIVE SITUATION OF THE EU DEFENCE INDUSTRY IN THE GLOBAL CONTEXT. 131

3.1. MAIN PLAYERS IN THE EU DEFENCE ECOSYSTEM.. 131

3.2. FINANCING THE EU DEFENCE ECOSYSTEM.. 144

3.2.1. A general funding framework for defence. 144

3.2.2. The change of attitude in the banking sector. 147

3.2.3. Evolution of the VC funding for defence startups in Europe   151

3.3. MERGERS, JOINT VENTURES AND ACQUISITIONS. 159

3.4. EUROPEAN EFFECTIVENESS IN REDUCING EXTERNAL DEPENDENCES IN MILITARY SYSTEMS. 167

3.5. QUALITATIVE POSITION OF THE EU IN PRIO-RITISED DEFENCE AREAS  176

4. POLICY CONSTRAINTS FOR STRENG-THENING THE EUROPEAN DEFENCE INDUSTRY. 181

4.1. THE NEED FOR THE PLANNING AND IMPLEMENTATION OF A LONG-TERM ROADMAP FOR MANUFACTURING CAPACITY. 181

4.2. DYNAMIC EVOLUTION OF TECHNICAL REQUIREMENTS OF MILITARY SYSTEMS. 188

4.2.1. The evolution of system performance. 188

4.2.2. Towards efficient defence innovation ecosystems. 194

4.3. EU FUTURE POLICY EFFORTS FOR STRENGTHENING DEFENCE COORDINATION.. 195

4.4. NEW EU INNOVATION INITIATIVES IN COOPERATION WITH UKRAINE   209

4.5. THE CHALLENGE OF THE AVAILABILITY OF HUMAN RESOURCES FOR THE DEFENCE INDUSTRY. 214

4.5. CONSEQUENCES OF THE POTENTIAL REDUCTION IN DEFENCE SUPPORT FOR THE EU BY THE U.S. 221

5. FUTURE EUROPEAN SCENARIOS FROM THE CURRENT SITUATION.. 235

5.1. SCENARIOS FOR THE EUROPEAN DEFENCE INDUSTRY. 235

5.2. THREE POSSIBLE SCENARIOS. 246

5.2.1. Optimistic scenario: towards a fully integrated European industrial ecosystem.. 246

5.2.2. Pessimistic scenario: European fragmented industrial ecosystem    251

5.2.3. Realistic scenario. 256

5.2.4. Global assessment of conventional scenarios. 261

5.2.5. The impact of a technology-based disruptive defence. 264

6. CONCLUSIONS AND RECOMMENDATIONS. 275

6.1. CONCLUSIONS. 275

6.1.1. Europe in turmoil of geopolitical instability. 275

6.1.2. Role of dual-use technologies in defence. 277

6.1.3. Technology sovereignty as a tool to improve strategic autonomy  279

6.1.4. Rapid transformation of the European industrial sector. 281

6.2. RECOMMENDATIONS FOR ACTION.. 287

6.3. FINAL PERSONAL REMARK ON THE NEED OF STRONGER CITIZEN’S INVOLVEMENT. 300

7. REFERENCES. 305

ANNEX 1. ORIGINS AND SCOPE OF THE DUAL USE TECHNOLOGIES. 331

A1.1. CONCEPT OF DUAL USE TECHNOLOGIES AND THE NEED OF REGULATION   331

A1.2. DUAL-USE CONTROL REGULATIONS. 335

A1.3. IMPACT OF DUAL-USE CONTROL REGULATIONS IN THE EUROPEAN DEFENCE INDUSTRY. 345

ANNEX 2. ASSESSMENT OF THE EU VS U.S. MILITARY DEPENDENCE IN 2025 AND ITS FEASIBLE EVOLUTION TOWARDS 2030. 349

A2.1. OBJECTIVES AND LIMITATIONS. 349

A2.2. COMPARISON U.S.-EU MILITARY SYSTEMS. 351

ANNEX 3. PHASES IN THE EVOLUTION OF THE EUROPEAN INDUSTRIAL DEFENCE SECTOR. 377

A3.1. PHASE 1 (1945–1957): POST-WAR RECOVERY AND THE ROME TREATIES  377

A3.2. PHASE 2 (1958–1989): U.S.-LED NATO UMBRELLA DURING THE COLD WAR   380

A3.3. PHASE 3 (1989–2013): EXPANSION AND WESTERN DEFENCE UNDER AN ENLARGED NATO.. 384

A3.4. PHASE 4 (2014–2026): EUROPE’S RENEWED RESPONSIBILITY AMID THE RETURN OF WAR. 387

ANNEX 4. CASE STUDY OF MISSILE DEFENCE IN EUROPE. 389

A4.1. RATIONALE FOR EUROPE. 389

A4.2. MAIN TYPES AND COMPONENTS. 391

A4.3. THE STATUS AND EVOLUTION OF EUROPEAN MISSILE DEFENCE SYSTEMS  393

ANNEX 5. DIRECTED ENERGY WEAPONS. 405

A5.1. TYPES OF DIRECTED ENERGY WEAPONS (DEW) 405

A5.2. MARKET OF DIRECTED ENERGY WEAPONS (DEW) 409

A5.3. DEW SYSTEMS IN THE U.S. 412

A5.4. DEW SYSTEMS IN ISRAEL. 416

A5.5. DEW SYSTEMS IN TÜRKIYE. 417

A5.6. DEW SYSTEMS IN RUSSIA. 418

A5.7. DEW SYSTEMS IN CHINA. 419

A5.8. DEW SITUATION IN EUROPE. 422

ANNEX 6. THE EUROPEAN NUCLEAR DEFENCE SECTOR. 425

A6.1. THE GEOPOLITICAL CONTEXT OF NUCLEAR DETERRENCE. 425

A6.2. ACCESS TO URANIUM.. 434

A6.3. EVOLUTION OF THE CONSTRUCTION OF NEW NUCLEAR REACTORS  437

A6.4. MAIN EUROPEAN INDUSTRIAL ACTORS. 442

A6.5. GLOBAL ASSESSMENT OF THE EUROPEAN SITUATION.. 445

ANNEX 7. LIST OF ACRONYMS. 449