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Revolution in the Defence Electronics Market? An Economic Analysis of Sectoral Change

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  • Paul Dowdall

    ()
    (School of Economics, University of the West of England)

  • Derek Braddon

    ()
    (School of Economics, University of the West of England)

Abstract

Within the defence sector there have been marked changes in the nature of the composite industries. This is particularly true of the electronics industry which continues to grow in importance, with electronic components built into nearly every weapons system and piece of equipment. Given the “Revolution in Military Affairs” (RMA) it seems certain that this growth will continue, impacting on both product and process. The result, however, may not be the contestable open market many expect (and hope for) as Network Enabled Warfare may result in new entrants, such as IT specialist and increased competition. Alternatively the nature of the market may continue to benefit the incumbents. This paper presents an analysis of the changes taking place in the industry using firm-level, primary, survey-based, qualitative data on corporate conduct. The results suggest that in practice the incumbents do seem to be in a strong position. The new demands of the customer require much more than mere technical capability. Specialists who do not have established industry relationships, who do not understand industry “protocols” and who cannot communicate effectively with the customer are unlikely to survive. This suggests that rather than new entrants, there may in fact be exits from the industry and further consolidation.

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File URL: http://carecon.org.uk/DPs/0506.pdf
File Function: First version, 2005
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Paper provided by Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol in its series Working Papers with number 0506.

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Date of creation: Sep 2005
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Handle: RePEc:uwe:wpaper:0506

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