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The size and location of Europe’s defence industry

Author:
Alexander Roth

There is growing debate about a common European military policy and defence spending. Such moves would have major economic implications. We look at the supply side and summarise some key facts about the European defence sector: its size, structure, and ability to meet a possibly increased demand from EU member states.

With a turnover of over €100 billion in 2015, the European defence industry does not rank among the largest manufacturing sectors in the EU. Nevertheless, the industry employs around 500 000 people directly and indirectly generates 1 200 000 jobs (in 2014). This gives the industry an additional importance beyond its inherent security aspect.

The structure of the European defence industry, similar to other manufacturing industries, is highly dispersed with a few large players and about 1350 small and medium-sized enterprises (SMEs). While companies are scattered over almost the whole EU, a few countries (Austria, Czech Republic, France, Germany, Italy, Poland, Spain, Sweden, and the United Kingdom) host the bulk of SMEs as well as top companies.

 

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