The Modern Defense Industry

Review of Bitzinger, Richard A. (ed.) (2009). The Modern Defense Industry. CA: Praeger Security International. Review by Tangguh Chairil (2011)
Challenges Facing the Global Arms Industry in the 21st Century The Defense Industry in a Global Context The Defense Industry: Regional Perspective The Defense Industry and the Arms Trade

Challenges Facing the Global Arms Industry in the 21st Century

Five main factors affecting the global defense industry today: 1. The hierarchical nature of the global process of armaments production 2. The impact of military spending upon the defense industry 3. The effect of the international arms trade 4. The process of defense-industrial globalization 5. The emerging information technologies-based revolution in military affairs

Technology and RMA

Hierarchical Nature

Globalization of Arms Production

Defense Spending

Global Arms Market

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Challenges Facing the Global Arms Industry in the 21st Century

The Hierarchical Nature of the Global Arms Industry

Critical innovators Adapters and modifiers

Copiers and reproducers

Largest & most technologically advanced defense industries Worlds arms production

Keith Krause (1992: 26-33)

etc.

Domination of global defense R&D process

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The Modern Arms Industry

Challenges Facing the Global Arms Industry in the 21st Century

Defense Spending
Peace dividend: More capacity to produce than capacity to afford Rationalization and consolidation of arms industry

1800 1600 1400 1200 1000 800 600 400 200 0

1989-1999: falls 30%

40000 35000

30000
25000 20000

2000-2009: grows 50%

Series1

15000 10000 5000 0

1989-1999: falls 30%

Series1

2000-2009: grows 23%

1988 1990 1993 1995 1997 1999 2001 2003 2005 2007 2009

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

World total military expenditure 1988-2010 (US$ b.) Source: SIPRI military expenditure database
Expand and greatly upgrade armaments production
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Total arms exports 1989-2009 (US$ m.) Source: SIPRI arms trade database

The Modern Arms Industry

Challenges Facing the Global Arms Industry in the 21st Century

The Growing Criticality of the Global Arms Market Defense Firms
BAE Systems (UK) Thales Group (France) Dassault Aviation (France) EADS (Ger, UK, Fra, Spa)

Overseas Business Sector

18% international business (2008) 52% international subsidiaries (2008) 43% export orders, 80% export net sales (2010) 85% gross orders out of Europe (2010)

National Defense Industries Exports

Russia US 72% (2009) 15% (2007)

US weapon systems now produced solely for export:

F-15 10/3/2011 F-16 The Modern Arms Industry M1 Abrams 5

Challenges Facing the Global Arms Industry in the 21st Century

The Globalization of Armaments Production
Transnational mergers and acquisitions
Arospatiale-Matra DASA CASA Merger (2000)

Nuclear power

Multinational defense R&D and production

Main center fuselage: Right wing, leading edge slats: Front fuselage, etc.: Eurofighter Typhoon Left wing, etc.: GPS

Dual-use technologies International joint ventures

(technologies for both peaceful and military aims)

Commercial-off-the-shelf (COTS)
Joint Strike Fighter program 10/3/2011 The Modern Arms Industry (in US) technologies with commercial support sold in commercial marketplace that can be procured under government contract 6

Challenges Facing the Global Arms Industry in the 21st Century

Technology and the Revolution in Military Affairs

Armaments production and arms industry

dramatically change the way wars fought, managed, and organized

What new technologies? How traditional defense industry will fare? What role of commercial dual-use enterprises? Will new suppliers arise?

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The Modern Arms Industry