Illimar Ploom

Chair of Strategy and Innovation, Estonian Military Academy,

Riia 12, Tartu 51013, Estonia

illimar.ploom@mil.ee 

ORCID 0000-0003-2950-7553

Defence industries in small European states: Key contemporary challenges and opportunities

Tarmo Kalvet

Department of Business Adminsitration, Tallinn University of Technology, Akadeemia tee 3, Tallinn 12618,

Estonia

tarmo.kalvet@taltech.ee

ORCID 0000-0002-4895-4466

Marek Tiits

Department of Business Adminsitration, Tallinn University of Technology, Akadeemia tee 3, Tallinn 12618,

Estonia

marek.tiits@taltech.ee

ORCID 0000-0002-2484-5003 

Abstract. This study addresses the challenges and opportunities that small European states face when weighing their defence industrial policy options. The article builds on a technology–based small state industry governance model by adding a defence industry–specific layer. This model is used to analyse how defence industries of small states could contribute to the European Union common defence industrial policy, and how the latter could likewise be beneficial to small member states. The paper discusses defence industrial policy challenges and opportunities both from the wider European Union and small state perspective. Global and regional geopolitical trends are explored among other specific topics, as are aspects of regional and domestic governance like the market structure, procurement, and R&D. The article concludes that small European states could both win and lose with the establishment of a common defence market, depending on the market design. Ideally, it should be combined with the simultaneous creation of an EU defence industrial policy that enables smaller, and especially less developed, member states to maintain and advance their own industries, preferably participating within the value chains of defence industries of the larger countries.

Received: March, 2022

1st Revision: October, 2022

Accepted: December, 2022

DOI: 10.14254/2071-8330.2022/15-4/7

JEL Classification: F52, F55, H56

Keywords: defence industry governance, small states, EU defence industrial policy, geopolitics, strategic autonomy