MODELLING DEFENCE INDUSTRY GOVERNANCE IN SMALL STATES – BUILDING AN ANALYTICAL TOOL

Abstract

This study addresses the questions that small European states face when weighing the different ways to analyse their defence industrial policy options, i.e. when trying to mould their respective governance decisions. Although a wider industry oriented model has already been developed, addressing defence industry specificities reveals a research gap. This article builds a defence industry specific layer for a technology based industry governance model for small states. An earlier model for priority setting in small economies is amended with specific categories found relevant to the defence industry. The article draws mainly on the experience of Estonia. We argue that next to global R&D trends, geopolitical developments should not be ignored either. Also, in addition to existing technological and indus trial specialisation, one should also take into account the domestic defence industrial market features. Finally, while looking at growing markets, trends in modern warfare should also be carefully followed.