How can NATO optimise its industrial base for readiness and deterrence?

Now more than ever, it is crucial for NATO member states to work together to send a clear and united signal to adversaries of their enduring strength. But deterrence involves not only demonstrating present readiness but also maintaining credibility during prolonged, attritional conflicts and adapting to dynamic threats. To achieve this, NATO members need to work as a unified organisation to expand its defence industrial capacity, build resilience into its supply chains, and streamline its approach to capability development.

From interoperability to industrial coherence

NATO’s strength derives from the scale and diversity of its collective force, yet interoperability remains a challenge. Member states often invest in similar capabilities but follow different procurement cycles, and lack a unified framework for force development. This can hamper coherence and weakens the alliance’s ability to respond rapidly and effectively to emerging threats.

A shared capability language and hierarchy, informed by technology that goes further than the NATO Defence Planning Process to develop interoperability, would offer a structured way to categorise and assess force development across the alliance. Such a system would allow member states to align their capability development to NATO’s broader strategic posture, considering industrial capacity, technological specialisation, and operational experience.

This would mean nations with established competencies in areas such as electronic warfare, cyber defence, or heavy logistics could assume lead roles in those domains. Conversely, other nations could contribute in ways that complement rather than replicate existing strengths. This model recognises national sovereignty over defence policy and enhances its effect through a framework, ensuring that collective investments yield collective utility.

Planning with live data and moving away from static models

Cyclical planning is ill-suited to an era where capability gaps can emerge from changes in adversary doctrine, technological disruption, and shifts in domestic industrial policy. A more dynamic and data-driven planning framework would enable NATO to track member state readiness and industrial output in real-time.

Introducing a common capability categorisation language and hierarchy would make such a system feasible. It would allow for a granular mapping of capabilities across NATO, identifying where shortfalls exist, where redundancy persists, and where there is scope for co-ordinated investment. It would also support using predictive analytics and scenario modelling, providing NATO planners with more than a retrospective view of readiness.

For example, the Force-Centric Capability Management (FCCM) approach is a new governance structure that seeks to ensure military capabilities are designed and procured with integration and interoperability as guiding principles. It also prevents these features from being traded out during delivery. FCCM ensures that forces are ‘integrated by design’ and provides a coherent thread from conceptual design, such as how the force will fight, to more technical system design and enterprise-level technical standards needed to drive interoperability across domains and with allies. FCCM for NATO would be a step change in embedding integration and interoperability at the design phase, across the alliance, and crucially, across its industrial base.

Specialisation without stratification

A common concern when discussing specialisation within multilateral defence frameworks is that it risks hardening divisions between ‘core’ and ‘peripheral’ members. However, if approached correctly, a taxonomy-led system does not stratify, it rationalises. It enables smaller states to focus on niche but vital capabilities, such as counter-disinformation, critical infrastructure protection, or digital resilience, without the pressure to emulate larger nations across every capability area.

A successful taxonomy would reflect traditional domains, as well as areas where contemporary conflict is playing out, including in space, cyberspace, and information environments. By mapping contributions across these dimensions, NATO can build a comprehensive force model that is balanced and adaptable.

A taxonomy would make it easier to identify and address critical gaps, which can then become focal points for investment, collaboration, and targeted development. The result is a more resilient and responsive alliance, not defined by uniformity but by complementary competence.

Our work leading Project CRENIC demonstrates the power of prioritising partnership. It ensures defence forces have the right suppliers, with different specialisms and flexibility in contracts to evolve with the threat and stay at the edge of technological advancement, ultimately keeping soldiers safe. New relationships between defence and industry, and improved procurement processes, are crucial to scaling up production and facilitating the economic growth that the defence industry can bring to Europe. Both technological and cultural integration is key to optimising NATO`s industrial base. A common capability language will make the forging of such partnerships much easier.

Deterrence through strategic responsiveness

Ultimately, the value of a shared capability framework lies in its ability to enhance NATO’s responsiveness. Strategic deterrence is not only a function of mass or modernity; but also, of clarity.

With a taxonomy in place, NATO can institutionalise that clarity. It will know, with precision, which members can provide which capability, at what scale, and with what speed. This reduces the time and friction associated with coalition building and ensures that integration of new technologies, whether in AI, quantum computing, or unmanned systems, is not an afterthought but a baked-in feature of capability development.

A common taxonomy helps NATO move from a deterrence model based on readiness snapshots to one based on sustained responsiveness. It builds the scaffolding for an alliance that can adapt to dynamic threats without sacrificing cohesion or coherence.

NATO stands at a critical juncture. To maintain its relevance in a world marked by contested domains and strategic ambiguity, it must evolve its industrial model accordingly. The adoption of a common capability taxonomy is not a simple fix. However, it is a pragmatic and scalable solution to increasingly complex problems. It enables smarter investment, better alignment, and a more federated approach to readiness and resilience.

Crucially, it reorients NATO’s military-industrial complex around the principle of endurance. In doing so, it sends a clear signal to adversaries: this is not merely an alliance that can respond; it can outlast.