By Laurent Benarousse, Manfred Hader, Oswald Perrin and Antoine Gizardin

To ensure the defense sector has the resources to successfully "do things differently", it is vital to anticipate the needs arising from current threats, align public and private players and adapt industrial resources. This publication is the first in a series in which our experts will share their insights into the sector, with the ultimate aim of transforming the French defense industry so it can address the challenges of our time.

A change of scale, restricted scope for action and new domains of conflict – the challenges facing Western forces

The current global context is dominated by resurgent rivalries between powers, leading to a proliferation of crisis zones around the globe. The resumption of war in Europe, as evidenced by the Russian invasion of Ukraine in 2014 and again in 2022, has revealed the vulnerabilities of Europe’s military capabilities and highlighted that the continent urgently needs to reconsider its political and industrial strategies in response to these developments.

The threats to our modern societies are multiple and dynamic. At the same time, the prospect of hybrid warfare, characterized by the combination of conventional and unconventional tactics, and the possibility of a high-intensity war lie ahead.

From cyber-attacks that disrupt essential infrastructure to disinformation campaigns that sow discord, democracies are having to contend with adversaries that exploit visible and invisible vulnerabilities.

Moreover, these threats are developing at an exponential pace. Technologies such as artificial intelligence and autonomous weapons simultaneously present opportunities and major risks for European democracies.

A paradigm shift offering the opportunity to transform defense systems and related industries

At present, European countries do not have the defensive capabilities to respond to all the continent’s security challenges. Traditionally, governments have focused on developing and procuring highly sophisticated systems with a view to ensuring technological superiority on the battlefield. Future platforms such as FCAS, MGCS and PANG remain the priorities for the defense industry, which often builds its growth strategy around these flagship programs (which will only be operational from 2035 onwards).

Rising procurement costs combined with falling budgets for military equipment since the end of the Cold War (despite an increase in the wake of the war in Ukraine) have led to a reduction in the number of operational systems available to the armed forces.

A vital transformation in response to these threats?

To address the challenges of military capabilities, European governments have taken steps to reorganize their defense equipment production, particularly in light of Russia’s invasion of Ukraine. In 2022, France announced its plans to switch to a “war economy” to transform its production capabilities. With this strategy, the country aims to produce military equipment more efficiently and more quickly.

The emergence of new hybrid threats and the challenges of high-intensity warfare underscore the need to adapt existing defense capabilities and develop new programs in a shortened timeframe. It is therefore essential that equipment production resources can be quickly mobilized and easily adapted. One key to success lies in the potential for mixed production of equipment by the civil and military sectors, thereby ensuring a continuous production cycle that can adapt to peaks in demand during periods of conflict.

Conclusion

Aware of the complex challenges facing organizations in the defense sector, Roland Berger is increasing its investment in this field. We aim to assist our clients in addressing their strategic and operational dilemmas. To that end in this regard, we are pleased to announce a series of publications that will serve as a platform for our experts to provide decision-makers with guidance. To be continued.