The Italian defence industry

This chapter analyses the Italian defence industry by highlighting three fundamental aspects. First, the military industrial sector in Italy is characterized by two national champions. The two national champions are surrounded by a plethora of SMEs which often play the role of sub-contractors. The existence of national champions is not only dictated by strategic reasons but also to protect some ‘economic sovereignty’. The White paper on Defence (released in 2015) states that some technologies must be retained nationally in order to maintain some key ‘sovereign competencies’. The second point to be highlighted is that in spite of the emphasis posed by the Italian government, the military sector is rather small. In 2017 it employed only 50,000 persons. Thirdly, the military industrial complex poses a substantial constraint on the Italian foreign policy. In fact, the industrial relationships between state-owned Italian and US companies are to prevent Italy from a deeper relationship with other European allies. The case of F35 Joint Strike fighter program is emblematic in this respect.