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Armed Forces & Industry

Past and current experiences show that interaction between the Armed Forces and the defence-related industry benefits both parties. Therefore our policy aims at supporting and developing a strong synergistic relationship between the Armed Forces, the R&D community and industry.

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To cover the Armed Forces' demand for equipment, the government invests in excess of !1 billion yearly. This sizable expenditure has a considerable impact on our economy. Due to the complexity of military equipment, large defence procurements involve a multitude of technological areas. As a result, the defence sector contributes significantly to technological and industrial development, as well as generating employment and export opportunities.

 

The Norwegian Government views defence acquisitions as a tool for the realization of an overall industrial policy. In accordance with our manifesto, Industrial Cooperation Agreements are used to ensure that the procurement of major defence materiel abroad also benefits Norwegian industry. This policy reinforces the important relationship between the Armed Forces, the R&D community and industry.

 

The administration is currently also evaluating the defence procurement policy. One of the goals is to ensure openness in defence acquisitions, enabling industry to adapt and respond to military demands in a more timely and effective manner. To ensure this, the Armed Forces must communicate its needs and demands explicitly to industry. A proactive-oriented policy implies that the Norwegian Armed Forces take initiatives to involve the defence-related industry as early as possible in the acquisition process.

 

Domestic industry can either be contracted to supply products to the Armed Forces or awarded foreign contracts through industrial cooperation. Historic evidence indicates that this industrial policy has been successful. During the 1980s and 1990s many products were developed and produced by domestic industry for our Armed Forces as well as for the export market. Local defence ventures have succeeded in becoming leading actors in their field. 

 

The restructuring and modernization process of the Armed Forces towards more specialization to curb costs has resulted in a decreased demand for some military products. As a consequence, countries have strengthened international armament cooperation. An effect of strengthened cooperation is a stronger emphasis on harmonization of operational demands. This is both militarily sound and politically desirable, although it obviously also reduces the need for unique national solutions and thus may have a negative impact on domestic industry.

 

This does not imply that Norwegian industry will lose business opportunities due to the transformed operational environment. To the contrary, new and promising markets are constantly emerging. The Government firmly believes that cooperation has positive ramifications for society as a whole.

 

Protectionism is still prevalent in the international armaments market. However, we welcome the establishment of the European Defence Agency (EDA) and Code of Conduct as a step in the right direction towards a more open market. Although Norway is not a member of EDA, I believe that through our Administrative Arrangement with the Agency we can maintain a pragmatic relationship and contribute to a strengthened European defence market.

 

The Norwegian defence industry has always proved very adaptable and highly capable of engineering solutions that meet specific technology requirements imposed by extreme climate, challenging topography or other unique characteristics. This ability to interpret and accommodate the customers’ operational requirements is decisive to success in the international marketplace.

 

To sum up, it is vital that the Armed Forces and defence-related industry communicate well and maintain an excellent working relationship. This Government will support this important interaction by acting as a key driver and facilitator in the process.

 

Anne-Grete Strøm-Erichsen
The Norwegian Minister of the Defence

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