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Technology and the defense industry: real threats, bad habits, or new (market) opportunities?

  • Renaud Bellais

    ()

    (Pôle SHS - Pôle Sciences Humaines et Sociales - ENSTA Bretagne)

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    Technology has been playing a central role in defense spending or arms-producing countries since World War II. Although there has been no major threat or conflict since the 1990s, defense R&D absorbs a large share of military expenditures, as well as public R&D. This technology-centric paradigm results from uncertainties surrounding defense matters and the need to avoid strategic surprises. However, one can wonder whether such a paradigm is still adapted to today's defense needs. This is a trend strongly driven by the supply side: defense firms have developed a business model that cannot survive without launching new programs, hence a high level of defense R&D. This explains both an overinvestment in technology, resulting in the development of unaffordable technologies or unsustainable performance targets, and the technology-centric model that defense firms favor in side markets like security.

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    Paper provided by HAL in its series Post-Print with number hal-00947395.

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    Date of creation: 02 Sep 2013
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    Publication status: Published, Journal of Innovation Economics & Management, 2013, 2013/02, 12, 59-78
    Handle: RePEc:hal:journl:hal-00947395
    Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00947395
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    1. Philip Pugh, 2007. "Retrospect And Prospect: Trends In Cost And Their Implications For Uk Aerospace," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(1), pages 25-37.
    2. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, June.
    3. William P. Rogerson, 1994. "Economic Incentives and the Defense Procurement Process," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 65-90, Fall.
    4. David Kirkpatrick, 2004. "Trends in the costs of weapon systems and the consequences," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(3), pages 259-273.
    5. Andrew Middleton & Steven Bowns & Keith Hartley & James Reid, 2006. "The Effect Of Defence R&D On Military Equipment Quality," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(2), pages 117-139.
    6. Rogerson, William P, 1990. "Quality vs. Quantity in Military Procurement," American Economic Review, American Economic Association, vol. 80(1), pages 83-92, March.
    7. Oren Setter & Asher Tishler, 2006. "A Brave Leap Or A Gradual Climb? The Dynamics Of Investment In R&D Of Integrative Technologies," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 201-222.
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