The Economic Imperative of Europeanizing Defense Innovation

Abstract

Security of supply and the mastering of defense innovation are the grounds for strategic autonomy that is at the heart of true sovereignty. This is the reason why many European countries have chosen to develop and maintain a domestic defense industrial base. While such policy was relevant for decades, the rising costs of defense capabilities and budgetary constraints should push these countries to gather resources. This is notably the case for defense innovation, which requires a certain level of investment to be effective due to threshold effects. The need to Europeanize defense innovation also results from the reliance of defense industry on non-defense innovations and from the impacts of the fourth industrial revolution on arms manufacturing. In this context, the Europe Defence Fund could provide the right incentives to achieve both transformations through a true Europeanization of defense innovation.