Repurposing European Idle Industrial Capacities for Defence Production

Why It Matters

Repurposing idle capacity tackles industrial decay and bolsters EU defence self‑sufficiency, cutting reliance on external suppliers.

Key Takeaways

• Four-step framework matches idle capacity to defence needs
• Uses proximity and relatedness metrics from economic complexity
• Identifies sectors with transferable manufacturing capabilities
• Policy incentives accelerate conversion of idle plants
• Enhances EU strategic autonomy and job creation

Pulse Analysis

Europe faces a dual challenge: a lingering industrial slowdown and an escalating demand for defence equipment amid geopolitical tensions. Traditional manufacturing hubs have accumulated significant idle capacity, a costly symptom of shifting global supply chains. Converting these dormant assets into defence production not only recycles existing capital but also aligns with the EU’s broader strategic autonomy agenda, reducing dependence on non‑European suppliers and strengthening the continent’s security posture.

The proposed four‑step framework draws on economic‑complexity theory, using proximity and relatedness indices to map how closely a sector’s existing know‑how aligns with defence product requirements. By quantifying idle output and overlaying it with these metrics, policymakers can identify low‑hanging conversion opportunities—such as aerospace components, precision machining, and advanced composites—that require minimal retooling. The methodology also incorporates a cost‑benefit layer, evaluating investment needs against projected defence contracts, thereby ensuring that repurposing decisions are economically viable and strategically sound.

Implementation hinges on targeted policy instruments: fiscal incentives, streamlined permitting, and workforce reskilling programs. Governments can accelerate plant conversions by offering tax credits for capital upgrades and by coordinating with defence ministries to secure guaranteed purchase agreements. Successful repurposing promises a cascade of benefits, including job preservation, revitalised regional economies, and a more resilient defence supply chain. While challenges remain—such as aligning standards and managing transition costs—the framework provides a data‑driven pathway for Europe to turn idle factories into engines of security and growth.