Saxony: Future in the defense industry - opportunities and challenges!

Saxony: Future in the defense industry - opportunities and challenges!

There is a lot of rumblings in Saxony when it comes to Germany's increased defense spending. The “Sächsische Zeitung” reports that Saxony is at a disadvantage when it comes to special funds for the Bundeswehr worth an impressive 100 billion euros. While 20 billion euros were awarded for various contracts in the previous year, Saxony was only able to claim 0.3 percent of this. That would be just 73 million euros from 25 contracts with Saxon main contractors. In the past there has been hardly any feedback from other eastern German federal states, which does not make the situation any easier.

But there is optimism in the Chamber of Commerce and Industry: IHK President Andreas Sperl emphasizes that Saxony has a lot of potential to gain a foothold in the arms industry and create new jobs in the process. The Free State could emerge as a driver of innovation - after all, the Bundeswehr's special funds should not remain unused, according to the chamber. A meeting in the fall will serve to bring stakeholders together and have a realistic debate about the development of the defense industry in Saxony while actively looking for new opportunities saechsische.de.

Military projects in focus

Among the planned military projects, the artificial model town “Schnöggersburg” in Saxony-Anhalt stands out for urban warfare exercises. This is considered to be the largest of its kind in Europe. The Military History Museum in Dresden and the Army Officers' School are also intended to help promote military training and interest in the history of the Bundeswehr. Not to be forgotten is the new location for the “Logistics Battalion 471” in Bernsdorf, where around 700 Bundeswehr members and 100 civilian employees will work. The wagon construction in Görlitz will also be taken over by the armaments company KNDS, which will produce assemblies for Leopard 2 main battle tanks and Puma infantry fighting vehicles from 2026. In addition, a startup on the outskirts of Dresden is working on a drone with lightweight carbon construction freitag.de.

It seems as if the industry is on the verge of a turning point. However, critics warn that there are large gaps between the Bundeswehr's needs and actual orders. This creates uncertainty for defense companies who are hesitant to make necessary investments. Alexander Sagel, head of Renk, makes it clear that economic investments require contracts and guarantees, while currently there are partial commitments rather than comprehensive orders. This is particularly true against the backdrop of the NATO summit in The Hague, where member countries are planning to significantly increase their defense budgets tagesschau.de.

Future of the arms industry in Saxony

The defense industry in Germany relies heavily on small-scale production, which is often viewed as inefficient. A rethink is required, demands the study by the Kiel Institute for the World Economy. Rafaela Kraus from the University of the Bundeswehr supports this demand and emphasizes that the existing engineering know-how should be better used. However, the path there is made more difficult by bureaucratic hurdles, as the position paper from the Chamber of Commerce and Industry for Munich and Upper Bavaria shows. Security reviews, which currently take eight to 10 months, should be accelerated to respond more quickly to needs.

It remains to be seen whether Saxony can achieve a breakthrough in the defense industry, because after all there is a lot of untapped potential. The will is there - now it is important to take the necessary steps to become (more) important as a location for the defense industry.