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

Listed author(s):
  • Renaud Bellais


    (SHS - ENSTA Bretagne - 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
    Publication status: Published in Journal of Innovation Economics & Management, De Boeck Supérieur 2013, 2013/02 (12), pp.59-78
    Handle: RePEc:hal:journl:hal-00947395
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    1. Rogerson, William P, 1990. "Quality vs. Quantity in Military Procurement," American Economic Review, American Economic Association, vol. 80(1), pages 83-92, March.
    2. 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.
    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. 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.
    5. 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.
    6. 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.
    7. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, July.
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