From National Champions to European Heavyweights: The Development of European Defense Industrial Capabilities Across Market Segments

Driven by dramatically reduced defence budgets and spiraling costs of weapons systems, defence firms on both sides of the Atlantic are seeking increased access to each other’s markets through collaborative ventures, teaming arrangements, or outright acquisitions. This book summarizes RAND’s research on the current structure of the European defence market, focusing on the five countries with the largest defence industries in Europe: the United Kingdom, France, Germany, Italy, and Spain. It examines key market segments and identifies major industrial players in each segment as well as significant market trends. The author finds that consolidation in the European defence market has led to the emergence of three dominant industrial players, each with its own distinct growth strategy. But while European firms have become more visibly competitive in the world defense market, they lag U.S. companies in overall size and U.S. firms seem to dominate sales in all defence market segments except land systems. Key concerns currently facing the European defence market include the future of intra-European and transatlantic consolidation, the ability of European players to successfully integrate their acquisitions, and the strength of government demand (and budgets) for defence goods.