Belgium’s defence industry could double in size within the next eight years if it aligns with global growth trends, according to a recent study by Agoria, the technology federation.
The report highlights the potential for significant expansion, driven by increased investments and a broader strategic focus. The current state of the industry is substantial, with over 80 companies generating an annual turnover of €2 billion and providing 5,000 direct jobs.
When considering all companies involved in defence-related activities, the sector encompasses nearly 900 firms, contributing a €5 billion turnover and supporting 16,300 direct jobs.
Agoria’s research department estimates that if the sector successfully doubles, it could create over 4,000 additional direct jobs and another 4,000 indirect jobs.
Diverse and Balanced Sector
The Belgian defence and security industry is notably diverse, with a broad range of activities. Weapons systems, ammunition, and land vehicles account for 28% of jobs, while digital services and cybersecurity make up 20%, and the aviation industry contributes 16%.
The employment distribution is also balanced regionally, with Flanders and Wallonia each holding 44% of the positions and Brussels providing the remaining 12%.
Pascal Acket, a defence specialist at Agoria, emphasized the importance of a diverse portfolio. “The diversity within the sector is a strength.
It not only spreads risk but also allows for synergies between different fields, such as digital security and traditional defence manufacturing,” he noted.
Challenges to Overcome
Despite its potential, the industry faces significant challenges that could hinder growth. One major issue is the sector’s image, which, according to Acket, still suffers from outdated perceptions.
Many do not view defence companies as essential for national and international security, a perspective that could limit both political and financial support.
Moreover, financial institutions remain cautious about extending loans to defence companies, despite the evolving geopolitical landscape that underscores the need for robust defence capabilities.
“The hesitancy of financial institutions is a bottleneck. We need a framework that encourages investment in this strategically important sector,” Acket explained.
Another critical challenge lies in the regulatory environment. Agoria’s report calls for a smoother and more legally certain export and transit framework, pointing out that Belgium’s regulations are currently stricter than those of other European nations.
Streamlining these regulations could enhance the competitiveness of Belgian defence companies on the international stage.
Investment as a Catalyst
Agoria suggests that targeted investment plans could serve as a catalyst for growth. By focusing on both traditional defence sectors and emerging fields such as cybersecurity and drone technology, Belgium could significantly boost its defence capabilities and economic impact.
The federation advocates for increased government support to bridge funding gaps and improve the industry’s public perception.
Looking ahead, the potential doubling of the defence industry presents a promising opportunity for Belgium to enhance its strategic autonomy and economic resilience.
However, realizing this potential will require addressing the sector’s financial and regulatory challenges promptly.
