Military Threat, Defense Technology Market Driver


The purpose of this article is to explore the trend of the defense technology changes in global market according with military threat changes that shaped the Industrial Military Production. And if the defense technology approaches communicate with today’s business representation of the defense industry. If defense technologies act in response to an actual requirements needed to meet a critical threats. If defense technology move toward the applicable requirements even after the Cold War period. Does the defense companies focus on maintain defense technology industries domination?

During World War II each side of the fighting parties (Blue Party) Vs (Red Party) where trying to maintain the battle superiority to win the war. Since then, the requirement to enhance the defense technology becomes essential. The defense industries start to grow up very rapidly in parallel with research and development (R&D)
process. “Despite the end of Cold War, armed forces continue to allocate a large share of their investment effort to defense R&D, particularly in arms-producing countries” (Bellais, R. 2013).

Technology Defense Driven Market:

As Väyrynen (1983, p. 63) states, “the invention of the atomic bomb modified entirely the importance of technology towards national military policies”. The 21 century defense technology paradigm reflects the major changes and the shift in the Ministries of defense foreign procurement approaches as driven by defense technology changes and R&D.  The industrial approach also stayed after the fall down of the Soviet Union 1n 1991. The mass production of high tech military products in all platforms drives the defense market and able to deliver the required capabilities that ministries’ of defense require for today’s confutations. This explains why the defense company’s predominance and survival through the years as they dealing with ongoing and expanding confrontations which seems to remain a core business strategy constraint in up to date and potential technology defense process.

Military Transformation:

The military transformation visionaries says “If Cisco system makes vital networking equipments for Wal-Mart, Perhaps Cisco can and should  make similar equipments for the military” (Dombrowski, & Gholz, 2006). This type of argument reflects the level of defense technology affordability for the commercial firms which could lead to out sourcing the R&D process and save cost.

More than that the privatization of the governmental defense activities start to become more frequent practice “For much of human history, armies were privately organized, and arms were produced by craft workers for pay or barter or in feudal arrangements. With the rise of the nation state that twin notions of the state’s right to the monopoly of force and the citizen soldier evolve” (T. Adams; Avant 1999).

The NSI Concept:

A national system of innovation (NSI) described as “the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies” (Freeman 1987, 1). This type of description would explain the defense technology network between the commercial and defense firm’s coordination and exchange in the military market. However each of the elements that mentioned could lead to problematic issue in some practices like the defense technology transfer and distribution. However the definition on the other hand included the important elements of the National System concept.

The most important advantage of the national system of innovation concept is the influence that provided to firms. While the traditional economic assumption describe the innovation in the institutions as the process of enhancing (machine running on automatic pilot), and looking forward to initiate standard business models of defense technology distribution around the institutions, besides it provides a cretin freedom for the function of government strategy, legal firms, learning and schooling firms. So the accomplishment and malfunction in innovation could be caused by any of the ingredient fundamentals of the integration system.

The Defense Industrial foundation:

The Deputy Under Secretary of Defense for Industrial Policy cleared in 2007 and stated the defense industrial foundation as “the Department of Defense, U.S. Government, and private sector worldwide industrial complex with capabilities to provide professional services, perform research and development, produce, deliver, and maintain Defense systems, subsystems, or components to meet military requirements necessary to fulfill the National Military Strategy” (Krieg 2007). Another author also descript the defense industrial foundation as “those industrial assets which provide key elements of military power and national security: such assets demand special consideration by government” (Hartley 2007). Due to the ongoing changes that keep happened to the defense industry and its association with the national defense government.  And the fall in defense market causes due to budgets cuts in the early 1990s, Market recession and demands reduction of the military production occurred caused to decrease so many of military  production firms and merged or transferred into the larger military production firms that still survive until today. The other side of changing is happening to financial departments that budgeting the requirements as they should revise their strategy towards the defense competition. The outsourcing or the privatization could be the best practice now recently to achieve the target of reducing cost and improve the performance and maintain long life competition. “It is virtually certain that defense budgets of the future will be lower, due to the growth in entitlement spending and projected federal deficits” (Walker 2004).besides the alteration of the reflection for the defense industrial foundation in the future will be more toward the financial cuts. And because of this fact, a severe gap will be created between future 21 century military operational necessities and the current capability of the defense industrial foundation.


Bellais, R. (2013). Technology and the defense industry: real threats, bad habits, or new (market) opportunities?. Journal of Innovation Economics & Management, (2), 59-78.

Dombrowski, P. J., & Gholz, E. (2006). Buying military transformation: Technological innovation and the defense industry.

Markusen, A. R. (2003). The case against privatizing national security. Governance, 16(4), 471-501.

Reppy, J. (2000). The place of the defense industry in national systems of innovation.

Markusen, A. (2000). Should we welcome a transnational defense industry?. The Place of the Defense Industry in National Systems of Innovation, 25-47.

King, D. R., & Nowack, M. L. (2003). The impact of government policy on technology transfer: an aircraft industry case study. Journal of Engineering and Technology Management, 20(4), 303-318.

Gansler, J. S. (2011). Democracy’s arsenal: Creating a twenty-first-century defense industry.

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