Kickstarting the Hungarian defence industry in the 2020s – Synergies, opportunities, and obstacles for smaller member states within EDTIB

Since 2016, Hungary has embarked upon developing its national defence industrial capacities as part of a comprehensive homeland defence and armed forces modernisation programme. Once underfinanced and degraded, with minimal capacity remaining, the national defence technology and industrial base have been reorganised and developed over the past decade as an integral part of the defence modernisation programme. Meaningful production, research, and development capacities have been developed in close cooperation with Tier-1 European (particularly German) defence industry firms, with a focus on regionalisation; cooperation with Turkish, Austrian, and Czech firms; and various joint ventures. Relying on the opportunities offered by European cooperation initiatives (both within the EU and NATO), these projects aim to tie Hungarian and joint ventures to the European Defence Technological and Industrial Base, as well as to make use of joint technology development and available resources for multinational cooperation. Based on the thorough assessment of primary sources (strategic documents, expenditure data) and secondary literature (expert analyses and media reports) this paper provides an overview of these processes. The goal of the paper is to assess the synergies, opportunities, and obstacles for developing the Hungarian defence industry in the 2020s, presenting the lessons learned to its European allies. The conclusions of the research show that kick-starting a rapid, large-scale industrialisation and modernisation programme with an innovation edge by the early 2030s is a ‘high risk – high reward’ strategy. This ambitious goal is supported by sizeable midterm procurement programmes driven forward by a record-breaking defence budget; redesigned institutional, legal, and innovation frameworks; and an integrated long-term national industry development programme. Still, sustaining high-level investment, providing skilled and qualified workforce, and developing innovative capacities remain the most crucial pillars of developing the Hungarian defence industry.