The rise in defense spending is transforming the military industry. At this moment, this industry can stand as a key variable in Spain’s territorial economic reconfiguration. In its development, the regional dimension is fundamental; this is demonstrated both by the policy pursued by the Ministry of Defense and by the nascent industrial policies of the autonomous communities that are beginning to take a security interest. Where industrial capacities are located, which territories concentrate projects, and how their economic effects are distributed have become central questions of public policy. At the same time, the great challenge is that this budgetary impulse and its indirect impacts —employment, technology transfer, or development— do not derail the fundamental objective: the industry must serve defense policy.
Indeed, geopolitical instability, threats to European territory, the pursuit of strategic autonomy and technological acceleration have placed defense at the center of the political agenda. In this context, the Spanish defense policy aims to link the modernization of the Armed Forces with the strengthening of a competitive industrial base. However, this process is conditioned by factors such as the levels of military spending —and the very debate about what counts as defense spending—, the inertia derived from industrial programs designed in cycles —decades— and the incorporation of lessons from ongoing wars, the increasing blurring between civil and military industries, the limited investment in R&D in Spain, as well as the sector’s own corporate structure.
“The Spanish defense industry appears as an emerging opportunity for the autonomous communities”
In this framework of technological revolution and allied investment commitments —with all its hesitations— the Spanish defense industry appears as an emerging opportunity for the autonomous communities, in the search for a balance between industrial efficiency and a geographic distribution that can reinforce local clusters and innovations in dual-use technologies. There, the defense industry has reinvented itself as a phenomenon that, in public policy, we call YIMBY (from the English, yes in my backyard, “yes, in my backyard”); this is, a good that is demanded and backed by the actors close to its implantation.
The very configuration of the sector in Spain reinforces this reinterpretation. In terms of volume, the industry records a record turnover well above 16 billion euros, with a significant trade surplus derived from the weight of exports. Its contribution to gross domestic product (GDP) stands at around 1.4%. Its weight in the manufacturing sector reaches approximately 12.9% of the industrial GDP, in addition to having a relevant impact on the generation of skilled employment. A foreign capital presence also adds to this, present in a substantial part of the sector.
The industry’s structure responds to a pyramidal arrangement in which a few companies lead the market —Indra, Navantia, Airbus…—, while a dense network of SMEs configures the auxiliary or niche industry. Although the impact on employment explains, to a large extent, the local embedment of certain firms and plants. Madrid concentrates the largest number of companies and corporate offices, being the main hub of the defense industry. Nevertheless, other clusters in Andalusia, Galicia or Murcia reflect the economic importance of the sector in particular autonomous communities. The aerospace industry, for example, constitutes one of the leading industrial sectors in Andalusia, representing around 1.2% of the regional GDP and roughly 14% of its industrial GDP.
The geographic distribution of the industry is therefore a central factor. Thus, regional political-institutional, union, and social conditions can decisively influence project configurations. Indeed, academic research has shown that the Defense committees’ agendas in the Congress of Deputies and the Senate —especially on issues related to industry— are heavily conditioned by these economic-social dimensions rather than by pure military politics. Factories and R&D centers are perceived by local actors as sources of employment, investment, and development. What is significant is the growing social acceptance of this industry, which does not respond so much to ideological adherence to military spending, but to a pragmatic evaluation of its economic and technological impact, particularly in territories affected by previous deindustrialization processes or by a strong dependence on the services sector.
“Autonomous and local elites compete to attract investments, while the Ministry of Defense pushes for greater reach of the industry”
For this reason, the conceptualization of the defense industry as a public good of the YIMBY type constitutes one of the most relevant novelties in this public policy. Thus, autonomous and local elites compete to attract investments, while the Ministry of Defense pushes for greater capillarity of the industry — even though the core of decision-making and economic activity remains concentrated in Madrid, as noted. This approach, which seeks to extend prior dynamics at the same time, translates into the inclusion of clauses in public procurement aimed at promoting a broader geographical distribution of activity.
The organization of the military industry and the Catalan context
The Defense Industry Strategy organizes the sector around three industrial corridors —North, Central, and Levante-Sur— with the aim of strengthening that territorial entanglement through the concentration of strategic projects and the development of specialized clusters. By boosting cluster creation, the goal is that the YIMBY effect not only preserves employment but acts as a talent-attraction factor and as a driver of dual-use technologies. This capillarity is therefore conceived as a potential competitive advantage.
The intention is to consolidate these regional ecosystems so that in those corridors tractor or specialized companies concentrate, together with the appearance of new technological hubs —Aragon, Murcia, Córdoba— in regions seeking to position themselves in the sector. Recently, we have observed how these types of initiatives around defense hubs are taking place through public-private cooperation formulas.
“The main challenge for Catalonia is political in nature: to define whether the defense industry is understood as an opportunity or rejected for ideological reasons”
It is noteworthy that Catalonia does not appear explicitly in this corridor configuration. This absence responds to industrial planning criteria, but above all to political and institutional constraints that have hindered its integration into the state’s strategic axes, despite having a relevant technological base. In this sense, the main challenge for Catalonia is political: to determine whether the defense industry is understood as an opportunity or is rejected for ideological reasons. “In my backyard” or “not in my backyard”.
All the same, there is a structural tension in the design of this policy that can clash with those dynamics. Ultimately, the aim of defense policy requires balancing strategic objectives and socio-economic considerations; the industry must be a means to that end, not an end in itself. The impact of a factory on local employment or on the economy of a region weighs heavily in decision-making, so project localization does not respond solely to criteria of efficiency or technical specialization, nor, ultimately, to serving defense. On the contrary, the defense industry is conceived first and foremost as a tool of territorial economic policy, where the defense budget contributes to sustaining those strategic industrial poles in certain communities. Therefore, efficiency, effectiveness and economy do not always coexist in harmony in all circumstances.
Likewise, defense industrial policy is deployed within a multi-level framework that requires increasing alignment among levels: regional, national… and increasingly, European. Even more so in a country like Spain, whose elites and society still maintain a strong pro-European inclination. Both the pressures of the international system and the war itself, as well as the incentives and requirements derived from European programs, add tension to those other public policies related to employment, territorial cohesion or social stability.
“The industry can act as a territorial engine, but its consolidation requires maintaining standards of competitiveness and technological excellence”
On this question of where the “general interest” lies, the development of the defense industry in Spain depends on its ability to manage this ambivalence. The industry can act as a territorial engine, but its consolidation requires sustaining standards of competitiveness and technological excellence in a demanding international environment, which seeks to provide military capabilities and with clear tendencies toward corporate concentration and leadership of large corporations.
Under these circumstances, the YIMBY character of the industry should serve as a basis for regional administrations to foster innovation ecosystems in dual-use technologies, integrating universities —including social sciences, essential to understanding the military phenomenon—, technological centers and enterprises. Likewise, it would be necessary to facilitate the incorporation of SMEs and startups into the value chain through financing instruments and access to European programs that allow scaling and increasing competitiveness through specialization, volume, or a critical contribution to the value chains.
Finally, and crucially, regional strategies should be developed in line with national and European defense policy, identifying niches of specialization and strengthening ties with lead companies, always in coherence with defense needs; that is, a bottom-up push that, nonetheless, requires coordination and alignment among the different political levels.
