Lately, it’s being bandied about a lot in terms of defence investments – to the obvious discomfort of anyone serving as chief executive of a national defence industries association. Nevertheless, there are ways in which the development of dual-use civil-military synergies can – at a time of scarce public resources – actually have a positive impact on jobs in Europe. They can increase the customer base of European companies, double the effect of a company’s investment, and award companies with access to public R&D funding from different sources.
Let’s start with the customer base. European companies are renowned more for high-tech and reliability than for low-cost products. To maintain this cutting-edge approach, they need customers ready to pay the extra for such goods and services. Traditionally, armed forces were willing to invest substantially to gain a technological advantage over potential adversaries. In a changing world with increasingly blurred lines between civil and military applications, the range of potential customers now includes homeland security forces, the police, border guards or even NGOs. A very recent example is the Austrian-made surveillance drones now patrolling the Mediterranean to spot refugee boats.
Serving a broader customer base brings a greater potential return on investment. Companies can double or triple the effect of investments by marketing the same technology to a broader range of clients. Light armour, for example, requires substantial R&D investment to replace steel plating with carbon structures with comparable protective properties. However, with threats like roadside bombs or terrorist attacks at home, this is needed for both military and civilian applications.
R&D is vital to keeping a technological lead. Without constantly improving products, you will simply not survive in a competitive global market. Any design will sooner or later be copied by competitors in a country with more modest labour costs. To keep their businesses alive, European companies need to get the next generation of their technology on the market by the time that happens. Public money, EU or national, can support European industry in this constant battle. Giving business the ability to apply civil or military funding to innovation in both fields would be a real synergy benefit.
Dual-use synergies can have a positive impact on companies’ performances, and hence on jobs in Europe. However, synergies should not be used as an excuse to underfund any sector, especially not defence and security industries, which are so highly dependent on their public sector clients.