President of the Spanish Association of Defense, Aeronautics and Space Technology Companies (Asociación de Empresas de Defensa, Aeronáutica y Espacio, TEDAE)
“Any nation that did not have this industry would be dead from the point of view of industry”
What does the defense industry contribute to Spain in industrial terms?
We represent 6 percent of industrial GDP, which stands at 16 percent in Spain. In this context, we are relevant. But I think that the qualitative aspect is the most important thing, and that is where we represent everything–or almost everything. There are other industries, but the defense industry is the one that contributes the cutting edge of knowledge in all spheres. Any nation that did not have this industry would be dead from the point of view of industry. You need to be on the cutting edge of knowledge in order to compete with your rivals.
Spain is among the NATO countries that spends least on defense.
When NATO or the European Council sets a benchmark of 2 percent of GDP, the logical thing to do is to reach this target because it is the right thing to do and because it is the threshold for the required investment. Secondly, given the nature of the industry, we ask states for clarity, continuity, and celerity. In other words, we need them to tell us clearly what demand is like, as well as ensure that there is continuity (given that the periods needed to amortize such investments are very long) and that decisions are taken quickly. We do not induce demand; rather, we serve it.
What role can Spain play in the definition of European industry?
We are the fifth most important country in Europe in quantitative terms. Qualitatively, we have an even better position due to our development capacity. In my humble but frank opinion, we can contribute a great deal. Our engineers and industries are perfectly competitive. We need to observe how the wider context is changing and adapt ourselves to the situation.
We export some 65 percent of what we produce in defense. What are our strong points?
Our strong point lies in the quality of our products and our capacity to cover other markets. Institutional support is of prime importance to the latter. For example, the previous government introduced mechanisms for government-to-government export. When we participate in a trade fair we receive the appropriate support. The Ministry of Defense has increased and reorganized its support for export activity. These strengths do not represent a limit but a target. There are also weaknesses: if Europe or Spain exports 70 percent of its production this means that its domestic market is constrained. There should be a balance between the domestic market and exports. The United States exports some 15 percent. Here we have to find a balance.
Should the state control the defense industry?
The state should set out the demand that it is disposed to commit to so that companies can adjust their plans to these needs. This would be the most practical and functional mechanism. The opposite would mean going back to the dark ages. What’s more, we need to remember that we have to be profitable. If the demand is taken care of, we’ll make sure we adapt to it.
Do we need a Spanish strategy for the defense industry?
It is a good thing. Important steps have been taken and we are working on further steps with government authorities. Industrial capacities have been established by the Ministry of Defense. It is necessary to have a strategy that involves both government and industry. The more solid the collaboration from each of these in their respective role, the more efficient the industry in the long run.