The European Defence Market and Industry

Abstract

In an era of expensive equipment, rising weapons costs, and increasingly constrained defence budgets, the nations of Western Europe cannot avoid questioning the efficiency and competitiveness of their defence industries. Critics point to monopoly and the absence of competition for contracts, the gold-plating of equipment, cost overruns, delays in delivery, cancellations, excessive profits, poor labour productivity, labour hoarding, and a failure to export. In addition, the European defence industries are criticised for excessive and wasteful duplication of costly research and development (R&D) and for relatively short production runs. It is generally believed that these defence industries are inefficient and uncompetitive, especially in relation to the USA and that the situation can be improved through collaboration. Some of these issues were reflected in debates about the European Fighter Aircraft, the UK Westland helicopter company,and European involvement in the Star Wars Programme.The policy debate about efficiency, competitiveness and collaboration has generated an extensive list of questions for which there are few reliable answers.KeywordsDefence IndustryCost OverrunNational Defence IndustryPerfect CompetitionProcurement PolicyThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.