Arms and Innovation: Entrepreneurship and Alliances in the Twenty-First-Century Defense Industry

Arms and Innovation: Entrepreneurship and Alliances in the Twenty-First-Century Defense Industry

Arms and Innovation: Entrepreneurship and Alliances in the Twenty-First-Century Defense Industry

Arms and Innovation: Entrepreneurship and Alliances in the Twenty-First-Century Defense Industry

Synopsis

With many of the most important new military systems of the past decade produced by small firms that won competitive government contracts, defense-industry consultant James Hasik argues in Arms and Innovation that small firms have a number of advantages relative to their bigger competitors. Such firms are marked by an entrepreneurial spirit and fewer bureaucratic obstacles, and thus can both be more responsive to changes in the environment and more strategic in their planning. This is demonstrated, Hasik shows, by such innovation in military technologies as those that protect troops from roadside bombs in Iraq and the Predator drones that fly over active war zones and that are crucial to our new war on terror.
For all their advantages, small firms also face significant challenges in access to capital and customers. To overcome such problems, they can form alliances either with each other or with larger companies. Hasik traces the trade-offs of such alliances and provides crucial insight into their promises and pitfalls.
This ground-breaking study is a significant contribution to understanding both entrepreneurship and alliances, two crucial factors in business generally. It will be of interest to readers in the defense sector as well as the wider business community.

Excerpt

[Based] on current trends, the weapons of the 2030s might be roughly as bright as
chickens. Chickens may not sound too fearsome. But these will be single-minded, fully
networked, hunter-killer cyberchickens—with strength in numbers. Thanks to civilian
demand for smaller, quicker, better computers, they will also be relatively cheap.

Greg canavan, Los Alamos National Laboratory

The armaments industry is widely regarded as technologically intensive and often innovative. Since the end of the Cold War, it has also been the subject of several waves of consolidation, in most cases encouraged by the national governments that are its primary customers. Today, the industry appears dominated by a handful of large firms with annual sales of ten of billions of dollars: Boeing, the European Aeronautic Defense and Space Company (EADS), Lockheed Martin, bae Systems, Northrop Grumman, Raytheon, General Dynamics, Finmeccanica, and Thales. Indeed, there are good reasons for their success. the effects of scope and scale have increased with technological advances in weapons design and production. the larger firms have the resources for large marketing and lobbying campaigns; they have huge research and development staffs; and through the constant migration of military officers from active to retired service, they are generally assumed to have strong grasps of their customers' needs.

Small Business in the New Defense Industry

It may be thought remarkable, then, that some of the most innovative weapon systems that have debuted in the past ten years were developed by rather small businesses, small at least by the standards of the industry. This book is a study—a series of case studies—of six such combinations: small organizations that won contracts to develop or produce important, innovative systems for the U.S. Department of Defense and other military customers. the question of whether small or large firms should be better at innovation . . .

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