Industrial diplomacy: How the defence industry builds a country’s standing on the world stage

Allies, much like potential customers, are far more interested in what we have in our warehouses, factories and production lines than in what we have written in yet another official statement. Paradoxically, the tank thus proved to be a diplomatic bargaining chip, ammunition an instrument of security policy, and the ability to produce and maintain armaments a highly practical means of building influence. The only question that remains is whether Poland can turn this lesson into a system, or whether we will first buy weapons, then devise a strategy, and finally wonder where our defence industry fits into the whole picture.

Why has the defence industry become an instrument of foreign policy?

Since 2022, security has ceased to be something that can be postponed until later. The war has demonstrated that what matters is not only what a country possesses, but also what it can manufacture, deliver and keep operational. First, production capacity has become more important. Second, supply chain resilience has become an element of national security. Third, weapons have ceased to be merely commodities and have become instruments for building lasting relationships and dependencies between countries.

Contracts, technology transfers, maintenance and joint production create ties that extend far beyond the purchase of equipment itself. Diplomacy operates through declarations, whereas the defence industry speaks the language of deliveries. A diplomat negotiates a commitment, while a contract gives it tangible form. This is precisely why an arms agreement can have consequences that last much longer than the moment it is signed. An arms contract does not end when it is signed. That is when its real power begins to take effect, binding technologies, supplies, maintenance and the interests of both countries together for years to come.

The importance of defence industrial diplomacy

Industrial diplomacy encompasses co-production, technology transfers, the localisation of production, supply chains, maintenance, training, and joint research and development. Its essence lies in transforming industrial capabilities into lasting relationships and dependencies between countries. However, this requires coordinated action not only by businesses but also by the state and public institutions, which use industrial and technological potential to pursue economic, security and foreign policy objectives. This is particularly important in the defence sector, where the ability to manufacture, deliver and maintain weapons directly affect a country’s security and international standing.

The issue is therefore not simply one of imports and exports, nor of military cooperation alone. In the defence industry, an individual contract is not merely a commercial document, but neither does it, by itself, constitute industrial diplomacy. It can become an instrument of industrial diplomacy when a transaction forms part of a broader framework encompassing production, technology, maintenance and strategic interdependence. Only then can it become a lasting mechanism for linking countries« military capabilities and, consequently, an instrument of their foreign policy.

Weapons as an instrument of state influence

Weapons become an instrument of foreign policy when their value extends beyond their technical specifications. A country then exports not only equipment, but also standards, technologies, expertise and logistical solutions. Joint research and development programmes are particularly important because they can elevate cooperation from the level of purchasing equipment to the level of jointly developing capabilities.

Beyond the initial purchase of weapons, the mechanism that creates long-term dependence on a particular technological ecosystem may include training, infrastructure, spare parts, ammunition, maintenance, modernisation and, eventually, further purchases. The more system components become integrated, the higher the switching costs. And the higher the cost of moving away from a given solution, the more enduring the relationship between the country, the manufacturer and the country of origin of the technology becomes. This is a by-product of deep interdependence, which extends beyond the industrial sphere. As a result, an arms contract begins to function not merely as a transaction, but also as a mechanism for establishing a lasting strategic relationship.

Exports can also strengthen security indirectly by maintaining production capacity, increasing production volumes, supporting industrial expertise and potentially lowering unit costs. At the same time, exports create a network of users operating similar systems, making interoperability and cooperation easier. An exporting country therefore builds not only industrial revenue, but also its own strategic environment.

This is precisely where „innocent” trade comes to an end. The more weapons require joint training, maintenance, ammunition, modernisation and technology, the less they resemble a product and the more they become a long-term instrument of foreign policy.

Who actually conducts industrial diplomacy: The state or the company?

Probably neither of these actors can do it effectively on its own. A company has a product, technology and business expertise, but it does not possess the full range of instruments available to the state. The state has political relationships, diplomacy, financing, guarantees, regulations and security instruments, but it cannot manufacture a weapons system by itself.

The defence sector requires coordination between the state, public administration, financial institutions and industry. The President and the Chancellery of the President of the Republic of Poland establish political channels of engagement; the government, together with the Ministry of Foreign Affairs, the Ministry of National Defence, the Ministry of State Assets and the Ministry of Development and Technology, provides political, regulatory and security instruments. Export support institutions provide financing and guarantees, while companies contribute technology, products and implementation capabilities. Finally, there are foreign partners with whom this entire framework must be translated into concrete cooperation.

The state’s role is therefore not to replace businesses, but to create the conditions under which their potential can be used as an instrument of foreign policy. In the defence industry, this means bringing industrial interests, security and foreign policy together under a single strategic direction, in which companies deliver the product and the state provides credibility. Only by combining the two can a contract be transformed into a strategic instrument.

PGZ as an instrument of Poland's industrial diplomacy

In Poland’s case, the Polish Armaments Group (PGZ) is a characteristic example of combining industrial potential with the country’s security interests. It is not merely a group of arms manufacturers. Its importance also lies in its ability to integrate production, technology, supply chains and international cooperation with the objectives of the state.

As an integrator of domestic capabilities, PGZ brings together manufacturing, research and development, and maintenance expertise, while also cooperating with private companies. Consolidating these capabilities can increase production scale, preserve domestic expertise and strengthen supply chain resilience.

A second dimension is cooperation with foreign defence companies. Joint ventures, licences, technology transfers, localisation of production and joint R&D make it possible to move from straightforward purchasing to the joint development of industrial capabilities. This matters because the value of a relationship lies not only in the equipment delivered to Poland, but also in what remains after delivery: technology transfer, industrial capabilities, maintenance and servicing capacity, opportunities for further weapons development, and long-term economic and strategic ties. In other words, what matters is not only what Poland purchases, but also the additional benefits, capabilities, and opportunities for cooperation that can be negotiated as part of the contract.

The third dimension is exports. PGZ need not be seen solely as an arms exporter, but rather as a potential builder of long-term defence-industrial relationships. Sales can pave the way for maintenance, modernisation, training, subsequent orders and technological cooperation.

This is where the fundamental difference between exports and industrial diplomacy becomes apparent. Exports end with a transaction; industrial diplomacy begins with the question of what that transaction will set in motion afterwards.

The instruments of Polish industrial diplomacy

The instruments of industrial diplomacy include both tools directly associated with a transaction and mechanisms that establish a lasting industrial presence in foreign markets. Contracts establish relationships of interdependence; loans, guarantees and financing make their implementation possible; and offset arrangements, technology transfers, joint ventures and the localisation of production enable cooperation to move from the level of purchasing to the level of shared capabilities. Joint R&D, in turn, develops expertise, while maintenance and MRO (maintenance, repair and operations) sustain a presence throughout a product’s life cycle. Training and interoperability strengthen the practical dimension of defence cooperation. Trade fairs, delegations and political diplomacy serve to open channels of communication and access to markets.

An individual instrument may secure a contract, but only a combination of these tools can create a lasting industrial, technological and strategic relationship.

From this perspective, a loan or guarantee is not merely assistance to an exporter, and maintenance is not simply an after-sales service. Each instrument can form part of a broader architecture of influence, provided that the state can deploy them as a coherent system rather than as a random collection of tools.

We buy equipment, we build dependencies

Arms deals are about more than weapons. They can build domestic industrial capabilities or lock a country into long-term dependence. Three examples show how the United States, South Korea, and Ukraine offer Poland very different opportunities.

The United States combines arms sales with industrial cooperation, training, and logistics. The July 2026 agreement between PGZ, WZL-2, and Anduril concerning Barracuda-500M missiles could mark a shift from the role of customer to that of manufacturer. Yet the American model still echoes a familiar principle: our equipment, our military presence on your soil.

South Korea focuses on localizing production, transferring technology, and developing maintenance and support capabilities. The K2, K9, and Chunmoo programs could give Poland an opportunity to secure more than just deliveries, although not every clause in the contracts will necessarily be equally advantageous. Only practice will tell.

Ukraine, in turn, offers something no manufacturer’s catalogue can provide: experience gained in a real war. Knowledge of how to manufacture, repair, and use military equipment is immensely valuable. The question is whether we have access to that knowledge and whether we know how to put it to use before buying yet another platform.

The United States sells systems, South Korea potentially transfers production, and Ukraine provides lessons from the battlefield. Poland, meanwhile, has an opportunity to find out whether it can turn procurement into lasting capabilities or whether it will remain faithful to its tried-and-tested strategy: buy at a high price, become dependent for years, and declare success at a press conference.

A contract is only the beginning of a relationship. If it does not build domestic expertise, technological capabilities, and freedom of action, industrial diplomacy ends where the warranty service begins. Strategic sovereignty then turns out to be an exceptionally expensive proposition.

European Industrial Diplomacy: Strategic independence also requires partners

Europe’s strategic autonomy does not mean producing everything independently. It means having the ability to decide what should be manufactured domestically, what should be produced jointly, and what dependencies we do not want to become completely reliant on.

At EU level, the key elements include the European Defence Fund, research and development projects, consortia and European supply chains. For Poland, this means access to funding, technology and partners, but also competition for a share in these programmes. Submitting a project proposal is only the beginning; a complex process lies between the proposal and its implementation.

NATO contributes the dimensions of interoperability, standardisation and joint procurement. Equipment must not only function properly, but also be compatible with the systems used by allies.

Regional cooperation is also important, involving the Baltic states, the Nordic countries, Central and Eastern Europe, and Ukraine. Shared defence needs and geographical proximity make it easier to develop supply chains, projects and specialised capabilities.

European industrial diplomacy is therefore not a choice between Poland and Europe. Poland cannot build its security alone, but it can help shape European capabilities, without which Europe will not achieve strategic autonomy. The goal should be to secure a seat at the table for Polish industry as a co-creator of technologies, capabilities, and supply chains, rather than merely a recipient.

What model of Polish industrial diplomacy should we pursue

Ultimately, the mechanism should be straightforward. The state supports industry, industry delivers a product, the product builds cooperation, cooperation develops capabilities, and those capabilities strengthen Poland’s security and international standing. This is a form of diplomacy that does not end with a photograph in front of a flag, but translates into concrete interests, relationships and real capabilities.

In defence, a contract is not the end of the process, but its beginning. A purchase is followed by training, maintenance, spare parts, modernisation, ammunition and interoperability. Weapons can be delivered in a container, but the relationship with the supplier or recipient remains for decades.

Industrial diplomacy must therefore be more than export promotion. It must combine foreign policy, security, industry, procurement, technology and cooperation with partners.

Does Poland already have elements of such a system? Of course. The problem is that they are scattered across different institutions. Can the state-owned PGZ play a significant role in this system? Yes, but only if its relationships with the state, the Ministry of National Defence, the Ministry of Foreign Affairs, the Ministry of State Assets, the Ministry of Development and Technology, and the private sector are clearly defined. What is needed is coordination, expertise, financing, export instruments and, above all, a long-term strategy.

Polish industrial diplomacy still operates to some extent according to the principle of „everyone for themselves.” Responsibilities are fragmented, procedures are lengthy, priorities change, and the defence industry faces its own challenges, including production capacity, staffing, R&D, intellectual property and supply chains. Then there’s financing, guarantees, certification, and competition to consider. The ambition is there, but is the system to support it missing?

Similar barriers are also identified in the draft Defence Industry Development Strategy for 2026–2030. Can we really speak of industrial diplomacy if foreign policy, industrial policy and defence procurement continue to operate largely in isolation from one another?

Every major arms deal creates long-term technological, industrial, and political dependencies. The Polish Armaments Agency is therefore not simply choosing a weapons system today; in practice, it is also choosing Poland’s strategic partners for decades to come. One might reasonably expect decisions of this magnitude to require something more than comparing technical specifications, negotiating prices, and checking delivery schedules.

If arms procurement is an instrument of foreign policy, treating it like an ordinary purchasing exercise would be a rather peculiar way of conducting diplomacy. The question is not merely what equipment Poland buys, but whose technology it will depend on, whose industry it will support, and whose political goodwill it may need when circumstances become less convenient.

This raises an uncomfortable question about the independence and institutional positioning of the Polish Armaments Agency: what, exactly, determines its final choices? Surely an institution responsible for equipping the armed forces should operate under formally defined strategic criteria for selecting suppliers, rather than focusing primarily on the familiar procurement triad of technical specifications, price, and delivery schedules. Unless, of course, the strategic consequences of these contracts are simply expected to sort themselves out, as usual.