This paper analyses the extent and character of product innovation in defence technologies where there are strong network effects, but where there is not a generally accepted system of open standards. Specifically, we examine the implications for innovation from the development of network-centric defence agencies accompanied by the creation of system integrators in the defence industry. The results show that although these developments are expected to have a number of positive impacts, such as enhanced security and gate-keeping of the relevant technologies, they are also likely to have an adverse effect on the available variety of new defence products.
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