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In from the cold: prospects for conversion of the defense industrial base
Science (New York, N.Y.)
|April 28, 1995
Summary
Manufacturing operations for military and commercial goods are more integrated than previously thought. Defense contractors leverage advanced technologies, giving them a competitive edge over commercial-only producers.
Area of Science:
- Industrial Organization
- Defense Economics
- Manufacturing Technology
Background:
- The end of the Cold War spurred a belief in the divergence of military and commercial manufacturing.
- Limited understanding existed regarding the technical and competitive overlap between defense and commercial industrial spheres.
Purpose of the Study:
- To analyze the extent of integration between defense and commercial manufacturing operations.
- To compare the technical and competitive conditions faced by defense and commercial producers.
- To identify factors contributing to a competitive advantage in defense contracting.
Main Methods:
- Analysis of 1991 survey data from a large sample of establishments.
- Focus on the machining-intensive durable goods sector.
- Comparative analysis of defense and commercial producers.
Main Results:
- Few technical and competitive barriers separate defense and commercial industrial spheres.
- Commercial-military production integration is common among defense contractors in this sector.
- Defense and commercial producers face similar competitive conditions and customer diversity.
- Defense contractors utilize more productivity-enhancing technologies.
Conclusions:
- The separation between defense and commercial manufacturing is less pronounced than assumed.
- Commercial-military production integration is a prevalent strategy.
- Technological adoption provides a key advantage for defense contractors.
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