Dutch central bank urges defense billions be directed to dual-use technology

The Dutch government would be wise to steer additional defense spending away from traditional weapons manufacturing and toward dual-use technology, economists at De Nederlandsche Bank (DNB) write in the policy journal ESB (link in Dutch). Technologies with both civilian and military applications align closely with the strengths of the Dutch economy and promise returns that are both strategically military and economically productive. Rather than attempting to replicate large-scale arms industries elsewhere in Europe, the authors contend, the Netherlands should build on what it already does best. In doing so, defense outlays could reinforce national competitiveness while strengthening Europe’s security architecture.

It’s unrealistic, the authors argue, to expect the Netherlands to assume a major role in producing tanks, ammunition or fighter jets. Such industries demand vast scale, deep and resilient supply chains and an industrial base that the country largely lacks. Germany, Italy and Spain are far better positioned to expand or establish production of heavy military equipment. Attempting to compete directly in those areas would stretch Dutch capabilities without delivering a clear comparative advantage.