An increase in defense spending in Poland’s budget has not translated into higher investment in the domestic arms industry. Despite government declarations that at least 50% of spending would go toward equipment produced by Polish industry, this threshold was not reached last year. This risks marginalizing Poland’s defense sector. “We must follow the example of countries like France, which invest long-term in their own solutions and defense industry,” argue the authors of a report from the Sobieski Institute on the realities and prospects of the Polish defense sector.
The report, “How to Move from Being an Importer of Arms to Becoming an Exporter of Security? Prospects for the Development of the Polish Defense Industry”, prepared by Sobieski Institute experts, comprehensively evaluates the current state of Poland’s defense industry and outlines the actions necessary to end its ongoing development problems and build national defense capabilities based on domestic solutions.
Buying “Off the Shelf”
The military prefers to buy ready-made solutions from abroad, which hampers the development of the domestic industry—an industry that could become a driver of the entire economy. The Borsuk project was a success, but it remains more of an exception than the rule. “We must follow the example of countries like France, which invest long-term in their own solutions and defense industry,” said Leszek Skiba, coordinator and co-author of the report, in an interview with Gazeta Polska Codziennie.
“In 2024, orders worth around 2 billion PLN were placed with the PGZ group, and another 1.3 billion PLN went to other entities—including private companies. It should be remembered, however, that the Support Inspectorate has a much smaller budget than the Armaments Agency, which is responsible for new purchases. In 2024 alone, the Agency signed contracts totaling 57 billion PLN, of which 25 billion PLN went to Polish industry—19 billion PLN to PGZ and 6 billion PLN to private firms. These figures clearly show that despite enormous defense spending, the share of domestic industry in public procurement remains unsatisfactory and requires deep, systemic changes. Without a doubt, as much of the defense budget as possible should be executed within the Polish defense industry. Domestic production of military equipment not only supports economic growth and job creation but, above all, increases national security by building our own technological and operational competencies. This means the ability to quickly service, modernize, and—if necessary—resume production in times of threat,” the report states.
The figures demonstrate that last year’s promises of allocating at least 50% of equipment purchases to Polish industry were not fulfilled. The typical response to emerging challenges is to look abroad for “off-the-shelf” weapons. After the drone attack on Poland, for instance, calls immediately arose to buy a German anti-drone system—even though the domestic system, once modernized, has already proven effective in defending Ukrainian skies.
The Agency: Not Just About Procurement
The report highlights systemic gaps in equipping the army effectively while also building the potential of the domestic industry. One such gap concerns the role of the Armaments Agency.
“The Agency’s activities focus strictly on acquiring weapons, while support for building industrial capacity lies outside its current legal responsibilities. Meanwhile, financial support decisions for the state-owned defense sector were made after the outbreak of full-scale war in Ukraine, but with some delay. As early as March 2023, PGZ declared investment needs of several billion PLN, but within twelve months only 1.45 billion PLN was allocated from the Capital Investment Fund to support two PGZ plants—Huta Stalowa Wola and Bumar-Łabędy. In the latter case, implementation required a corrected application, which is still being processed in 2025. Another major program, the long-planned medium-range air defense system Narew, contracted in 2023, was only launched in June 2024,” the report notes.
Too Little for Research, Too Much for Salaries
The authors also analyze the structure of defense spending—how much goes to R&D and how much to personnel. “Polish defense spending is now among the highest in NATO, exceeding 4% of GDP. In 2024, it reached 4.1% of GDP, and in the 2025 budget it is planned to rise further to 4.7% of GDP. The key spending categories are as follows: equipment purchases and R&D—set at 2.4% of GDP in 2025, or over 90 billion PLN; personnel costs—mainly salaries for professional soldiers and pensions for uniformed services—around 1.2% of GDP (almost 50 billion PLN); military infrastructure—about 0.3% of GDP (10 billion PLN); and other expenditures—mainly maintenance and servicing of equipment—0.7% of GDP (around 30 billion PLN).
The structure of Poland’s defense spending raises serious concerns. Compared to allied states, personnel costs are worryingly high. Forecasts are not optimistic—by 2035, these costs are expected to reach 1.7% of GDP, meaning that by the mid-2030s they will consume 45% of Poland’s entire defense budget. For comparison: in France, personnel costs make up around 39% of the defense budget, while in the United States they are about 22%.”
Learning from Others
The report recommends changes in how Poland plans and organizes military procurement. “Short production runs with tight deadlines create constant uncertainty for defense plants, discouraging investment in forward-looking R&D. This keeps the industry reactive rather than innovative. It is also weaker than its counterparts in countries like Germany or France, where cooperation between the military and industry is different. There, long-term armament programs are common, with emphasis placed on reducing reliance on foreign suppliers. This is extremely important in times of crisis, as we see in Ukraine, which has launched its own production of ammunition and drones. That capability allows it to survive disruptions in foreign aid,” said Leszek Skiba.
Therefore, the authors recommend reforms in Poland’s defense approach, including:
- Passing a law regulating the defense industry as a sector of the national economy with special significance for state security;
- Mandating the Council of Ministers to regularly adopt a strategic document on developing the domestic industrial and technological base, setting objectives and methods in military, economic, political, and R&D areas, using all resources at the government’s disposal (including a planned spending ceiling for four-year budgetary cycles);
- Creating a list of “strategic projects” under this document that fulfill key objectives for expanding the operational capabilities of the Polish Armed Forces, along with identifying their sources of financing.