Netherlands defence market ranking among the top 20 in the world

Press release   •   Apr 29, 2013 11:16 BST

The Netherlands defence market had a budget allocation or $10.1 billion in 2013, making it one of the top 20 defence markets in the world.

Through to 2018 the industry has been forecast to decline at a negative compound annual growth rate (CAGR) of -0.31%, predominantly due to military modernisation programs, the coast guard and internal security.

This decrease in spending is expected to be primarily due to the European debt crisis, which will force the Netherlands to cut its defence budget over the next few years. The country's defence imports and exports recovered in 2012 and are expected to grow once more, as the country is expected focus on acquiring equipment for maritime security, C2/C4ISR, and homeland security infrastructure.

The Netherlands' government has been criticised for giving inadequate support to its domestic defence industry over the review period, especially during times of economic crisis. Instead, the government reduced its defence budget, forcing the industry to rely on export orders for revenue. In addition, the government does not offer financial resources such as working capital funds to the industry in order to cater to export orders, which has forced many domestic firms to close.

Instances of human and hard drug trafficking have increased in the Netherlands recently. The country's Ministry of Justice follows a tolerance policy for the category soft drugs such as cannabis products and enforces a ban on hard drugs such as heroin, cocaine, and LSD. Although the government places high priority over fighting illegal hard drug trafficking, the location of the Netherlands makes it an important point of transit for international drug trafficking, and this is expected to drive homeland security expenditure.

The Dutch approach combines import substitution in the form of offsets, export promotion in the form of R&D investments, skill development, market access instruments and by supporting through procurement and R&D support a national champion in shipbuilding27. Thus it is difficult to pinpoint the Netherlands close to an extreme along the defence industrial policy scale.

DIS technology orientation reflects the Government's view that while the Dutch industry may lack the range and depth of industrial resources necessary to develop and produce major weapons systems other than naval ships, it possesses the requisite skills and expertise to be a strong participant in a wide variety of international programs from their development to their life-cycle maintenance.

For more information on the Netherlands defence industry, see the latest research: Netherlands Defence Industry

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