“Middle powers must act together, because if we are not sitting at the table, we are on the menu.” When Canadian Prime Minister Mark Carney spoke these words at the World Economic Forum in Davos in January 2026, he outlined his strategic vision: In a world where “great powers use economic integration as a weapon,” medium-sized countries must build new forms of cooperation.
A paper published in Defense & Security Analysis by Walter Rauti ( SHIELD SDA Bocconi) and Justin Massie (Université du Québec) offers an innovative interpretation of defense industry resilience among allied middle powers, comparing Italy and Canada. The study argues that such resilience depends neither on full national autonomy nor on simple integration within alliances, but on the institutional capacity to govern dependence. The authors examine the cases of Italy and Canada, two Western middle powers that have devised very different models of industrial integration in the defense sector. Precisely because of the complementarity of their capabilities, these nations could provide a concrete example of the third path evoked by Carney in Davos: a network of partnerships among allied countries capable of strengthening economic security, decision-making autonomy, and the resilience of strategic supply chains.
When sovereignty is delegated
The pandemic showed how fragile global supply chains can be, while the war in Ukraine underscored how critical it is to maintain national and allied production capabilities in critical sectors. At the same time, as competition among major powers grows, they are more frequently using economic dependencies as tools of geopolitical pressure. In the defense sector, these dynamics are even more evident. Supply chains are long, highly specialized, and dependent on critical technologies, strategic raw materials, and complex integration systems. For this reason, terms such as “strategic autonomy,” “technological sovereignty,” and “industrial resilience” are now firmly embedded in the lexicon of policymakers.
The existing literature tends to focus on two options: consolidating national capabilities or building integrated industrial systems on a supranational scale, as in the European case. Instead, Rauti and Massie explore integration from a different perspective, asking under what conditions it fortifies industrial resilience among allies and when, conversely, it risks creating new forms of dependency.
To answer this question, the authors introduce the concept of delegated sovereignty , referring to situations in which a state relinquishes direct control over certain strategic functions of its defense industry while maintaining operational capabilities through privileged access to an ally’s industrial ecosystem. This model is a defining feature of Canada’s relationship with the United States. Italy, by contrast, represents a system that combines international integration while preserving autonomous capabilities in designing, incorporating, and managing complex systems.
Different but complementary
Italy and Canada share many characteristics: They are NATO members, advanced economies, and middle powers from in both military and political terms. However, they have developed profoundly different industrial architectures.
Canada has built its defense industry within the North American ecosystem, prioritizing interoperability with the United States. Today, in fact, many of its companies successfully do business in high-value-added niche markets, but the country has limited autonomous capability to integrate large-scale systems. More specifically, Canadian industry is deeply embedded in US supply chains and subject to American regulatory constraints.
Italy’s industrial ecosystem, by contrast, revolves around major national integrators such as Leonardo, a multinational defense contractor, and Fincantieri, a leading shipbuilding group. These industrial giants retain expertise in the design, integration, and management of the entire life cycle of complex platforms and systems, participating in European and international programs while preserving considerable technological and decision-making capabilities. Collaborating with these companies is a network of highly specialized suppliers and small and medium-sized enterprises that fuels innovation and competitiveness across the system.
As the analysis shows, resilience depends on the ability to maintain control over the most strategic functions of the value chain: design, intellectual property, maintenance, and platform upgrades. Within this framework, several interesting complementarities emerge between Italy and Canada. Specifically, Italy is particularly strong in shipbuilding and complex systems; Canada possesses advanced expertise in areas such as simulation, training, software, aerospace, and dual-use technologies. In addition, the two countries have something else in common: they both need to curtail certain industrial dependencies and diversify their technological partnerships.
Alliances for industrial resilience
According to the authors, this complementarity could be translated into genuine “industrial resilience alliances”: joint development programs, shared investments, and selective supply-chain integration that can bolster both sides.
The future competitiveness of the defense industry (from major players to SMEs) will increasingly depend on the ability to participate in international networks of collaboration based on industrial complementarity. The analysis therefore suggests that industrial policies should not focus exclusively on self-sufficiency. In many cases, it may be more effective to establish structured relationships with reliable and complementary partners, deconcentrating risk without giving up the benefits of international integration.
For an interesting test case, we can look to the possible involvement of Canada in the Global Combat Air Programme (GCAP, the project launched by Italy, the United Kingdom, and Japan to develop a next-generation fighter aircraft). According to the authors, Ottawa’s participation would allow Canada to diversify its industrial relationships beyond its traditional axis with the United States; at the same time, Italy would have the opportunity to further strengthen an industrial ecosystem built on cooperation among middle powers.
Walter Rauti , Justin Massie. “ Alliance integration and defence industrial resilience in Italy and Canada .” Defense & Security Analysis (08 June 2026). DOI: https://doi.org/10.1080/14751798.2026.2677962 .
