Written by Sebastian Clapp.
The United States (US) Defense Industrial Base (DIB) is the world’s largest, comprising over 60 000 companies and 1.17 million employees. It is dominated by five major corporations – Lockheed Martin, RTX, General Dynamics, Boeing and Northrop Grumman – which together account for around one third of US Department of Defense (DoD) contracts and half of the revenue of the top 100 defence companies in the world. While the DIB sustains US technological dominance, it faces challenges linked to market consolidation, supply chain resilience and workforce shortages. The 2023 Biden administration’s National Defense Industrial Strategy seeks to address these issues, among other things, through enhanced supply chain resilience, workforce development and flexible acquisition. However, experts expect vast changes, including for the DIB, in strategy under the new Trump administration’s national defence strategy that is currently being developed.
By contrast, the European defence technological and industrial base (EDTIB) remains fragmented, and has been under-invested in for decades. In 2024, EU defence spending reached €343 billion, roughly 2.5 times less than the US level (around €864 billion in 2024), with a large part of procurement sourced from the US. The 2024 European defence industrial strategy and the European defence industry programme aim to strengthen European defence industrial sovereignty, promote collaborative procurement, and emphasise a ‘Buy European’ approach. The European Parliament supports close EU–US cooperation but insists that EU programmes must primarily reinforce the EDTIB and increase strategic autonomy.
Read the complete briefing on ‘United States Defense Industrial Base: How does it differ from the European defence technological and industrial base?‘ in the Think Tank pages of the European Parliament.
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