Chapter 2: Transition and Readjustment in Second-Tier Defence Industries: Five Case Studies

Abstract

Despite professed goals of self-sufficiency, most so-called second-tier arms producers – i.e., the smaller industrialised countries and the major arms producers in the developing world – have largely failed to eliminate or even substantially reduce their dependencies on foreign technologies, due to continued deficiencies and weaknesses in these countries' R&D and manufacturing bases. Recent industrial readjustment strategies undertaken by many of these second-tier arms-producing countries point to their increasingly subordinate role in a more globalised and interdependent worldwide defence industry. Structurally, such a system could resemble a huge ‘hub and spoke’ model, comprising a few large first-tier firms operating at the centre – and providing the process of armaments production with its critical design, development and systems integration inputs – with lines of outsourced production of niche systems or low-tech items extending out to second-tier states on the periphery. Although such a global ‘division of labour’ in arms production will probably bring new economic and technological benefits to many second-tier arms producers, it is likely that it will entail the abandonment of their original objectives of self-sufficiency.