Since the end of the Cold War, Europe’s defense industry has undergone important changes. There has been a marked consolidation of the defense industry and a visible increase in intra-European collaboration. In 1993, only two European defense firms — British Aerospace and Thompson S.A. — were among the top ten defense firms in the world. Today, four European firms — BAE Systems, EADS, Thales, and Finmeccanica — are among the top ten. These developments have received relatively little attention outside the boardrooms of a few U.S. defense firms. The consolidation of Europe’s defense industry has largely been driven by a desire to compete with U.S. defense firms on the global arms market. With the partial exception of UK defense companies, European firms have had difficulty penetrating the U.S. defense market. However, if restrictive U.S. licensing polices make it difficult for European firms to compete on the U.S. market, they may have little choice but to sell to third countries such as China. Thus it is in the U.S. interest to revise some of its licensing procedures in order to facilitate greater transatlantic defense cooperation.
Originally published in: The National Interest, no. 82, Winter 2005-2006, pp. 62-68.
This report is part of the RAND Corporation reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.