A N A LYS I S Defence Industry in Central Eastern Europe The Defence Sector in the Czech Republic: Past, Present and Future Zdeněk Rod 1. Introduction The Czech defence sector has constituted a core pillar of the national economy since the establishment of Czecho ­slovakia in 1918, drawing on the industrial base developed in the Czech lands during the Austro-Hungarian Empire. Over the 20th century, it underwent a succession of pro ­found transformations: from the interwar period, through the upheavals of the Second World War, to the Communist era, during which far-reaching state centralisation curtailed the sector’s private, innovative, and market-led character. Following 1989, the industry once again operated within a liberal democratic and market-oriented framework. Few states possess a defence industrial trajectory shaped by such turbulence and historical layering(Rod, 2025, pp. 1–2). Today, the Czech defence industry represents rough ­ly 1% of national GDP and generates around€3 billion in annual turnover, approximately€2 billion of which derives from exports to 98 countries(Czech Chamber of Com ­merce, 2025; Novák& Kozelský eds., 2025). The sector builds on a long-standing Czech industrial tradition, as a result of which it consistently ranks the Czech Republic among the top five most industrialised countries in the EU (Vejskal, 2025). The sector is thus more than 90% ex ­port-oriented. Comprising some 400 firms, it directly em ­ploys about 20,000 people and indirectly sustains a further 50,000, offering stable, highly skilled employment across a broad spectrum of technical fields(Czech Chamber of Commerce, 2025; Novák& Kozelský eds., 2025). Moreover, in the Czech Republic, more than 1,000 industrial compa ­nies are registered in the Czech Republic as contributors to the defence industry(oneindustry, 2025). Since 2022, the sector has experienced a striking and largely unexpected resurgence. Defence policy has moved to the forefront both in Prague and across Europe, with cer ­tain companies more than doubling their revenues in re ­sponse to soaring demand triggered by Russia’s war against Ukraine and acute shortages – particularly of am ­munition – which have strengthened the competitive posi ­tion of Czech firms(Rod, 2025). This elevated demand has produced notable spillover effects for the wider Czech economy, still recovering from the post-COVID-19 downturn and grappling with the relative decline of the automotive The Defence Sector in the Czech Republic 1