Summary: Security Policy and the Economy
Herbert Strunz/Monique Dorsch
After the end of the Cold War it became necessary to rethink the term "security”, as forces suddenly saw themselves confronted with a number of tasks that by far exceeded their original task spectrum. As a consequence they have to face the new challenges and adapt to the concrete threat scenarios. Comprehensive security is, however, not merely a military matter but has political, psychological, social, ecological, and economic components as well.
The economic dimension becomes evident from the impact securitypolitical decisions have on the macroeconomy on the on hand, and on the microeconomy on the other. Macroeconomically the vital but equally hard to answer question about the productivity of military expenditures comes up as well as the question of what military burden the state economy is able to bear. Microeconomically the role of the military is of relevance in point of demand, as this determines the development of the weapons industry. Military research and development also have an impact on the civilian sector and the economy equally profits from the special services the military provides as, for instance, disaster relief.
Procurement in the public sector including the military not only relies on commercial and technical aspects but also macroeconomic considerations, such as economy stimulating or labor market relevant measures. With outsourcing one has to bear in mind that maintaining security is one of the key obligations of a state. Offset deals on the other hand may be structured in such a way that both parties find themselves in a winwin situation, even though it might not always be easy to provide empirical proof of the economic implications of such deals.
Setting up the logistical framework needs to take securitypolitical aspects into consideration. The impact of logistics is not only derived from its importance for ensuring operational readiness but also from the high costs it incurs. The new logistical concept of the Austrian Armed Forces, in which economic partners play a decisive role, takes this factor into account, while the regional economic impact of military sites speaks for itself.
Of special interest are the spinoff effects in the field of research and development, in which the military medical sector shows the highest potential for knowledge transfer, followed by natural sciences and technological research, whereas humanities and social sciences range at the lower end of the scale. Reversely, the civilian spinoff effects on the Austrian Armed Forces are rather moderate. A mere 12% of the Austrian industrial research sector show a high potential of stimulating the military sector and 32% range in the middle field. Another important aspect of the interaction between the military and the economy is that of partnerships formed for the purpose of providing mutual idealistic and material support, which have a high potential of creating synergetic effects of security policy and the economy.
Giving up its neutrality would have substantial economic advantages for Austria, as this would make Austria a more attractive location for companies in the armaments sector. Likewise, securitypolitical considerations are essential to the attractiveness of a production location and, compared internationally, Austria’s ratings in this respect are good. The Austrian Armed Forces would be well advised to take systematic measures and intensify its efforts in the fields of research, information, advice and training at all levels of society, in order to play a role within the overall European context.
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