Restructuring the U.S. Defense Industry (original) (raw)
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In from the Cold: Prospects for Conversion of the Defense Industrial Base
Science, 1995
At the end of the Cold War, the manufacturing operations involved in making military equipment and commercial goods are commonly believed to intersect hardly at all. Our analyses of 1991 survey data from a large sample of establishments in the machiningintensive durable goods sector show that there are few technical and competitive conditions separating the defense and commercial industrial spheres. Commercial-military integration of production is now the normal practice among the majority of defense contractors in this sector. Moreover, we find little difference between defense and commercial producers in the competitive conditions they face or in the diversity of their customers. However, defense contractors have an advantage over their strictly commercial counterparts because of their greater use of productivity-enhancing technologies.
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L'Ifri est un centre de recherche et un lieu de débats sur les grands enjeux politiques et économiques internationaux. Dirigé par Thierry de Montbrial depuis sa fondation en 1979, l'Ifri est né de la transformation du Centre d'études de politique étrangère créé en 1935. Il bénéficie du statut d'association reconnue d'utilité publique (loi de 1901). L'Ifri dispose d'une équipe de spécialistes qui mène des programmes de recherche sur des sujets politiques, stratégiques, économiques et régionaux, et assure le suivi des grandes questions internationales. La série transatlantique des « Notes de l'Ifri » propose des analyses concises, en français ou en anglais, des principaux débats transatlantiques et des enjeux politiques menées tant aux États-Unis qu'en Europe. Elle reçoit le soutien du German Marshall Fund of the United States. Cette publication a également reçu le soutien du ministère de la Défense. Les opinions exprimées dans ce texte n'engagent que la responsabilité de l'auteur.
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Conventional wisdom holds that defense industry consolidation resulted from decreased defense spending. However, we maintain that understanding dynamic changes in key defense institutions helps provide a more complete explanation for observed consolidation. Specifically, we examine the interaction of evolving technology and changing institutions. Institutions reviewed include procurement policies, the weapons requirements process, and procurement organizations. We take an initial look at the industry, and highlight how these changes influenced transaction costs in the defense industry, more fully explain the forces driving consolidation, and provide greater insight to policy makers seeking to improve the performance of the defense industry. Further research is needed to build a robust institutional framework of the defense industry and the related government agencies to allow better policy prescriptions.
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Changes wrought around the end of the Cold War and particularly by the national security policies in the wake of September 11, 2001, including those that led to the “Forever War” in Iraq, Afghanistan, and beyond, require that the concept of a military-industrial complex be updated, along with the name applied to it. Such things as new forms of military privatization, the revolutions in digital technology, the post-9/11 tsunami of veterans, and the creation of the Department of Homeland Security, mean that the word "industrial" no longer captures the breadth of the activity and that the word "military" does not fully embrace the set of policies and interests involved. Instead, with myriad private enterprises, large and small, contracting for weapons, services, information technology, health care, and a host of other things across several bureaucracies responsible for parts of national security, a far more accurate designation for the military-industrial complex is the national security contracting complex. This chapter traces and analyzes this transformation, with an emphasis on the expansion of contracting activities within and beyond the Pentagon, with the inclusion of departments such as the Homeland Security, the Veterans Administration, and even State—in addition to the ongoing military programs in the Department of Energy—all tied to a diverse host of private enterprises providing an array of goods and services to all these departments.