The state and the macro-industrial economy--The use and abuse of offset

State intervention to establish, develop and retain particular industrial sectors in the world economy is widespread, often stimulated by the perceived threat to sovereignty posed by foreign based macro-industrial enterprises. The paper examines a particular form of such intervention, known as offset, which is widely used in major purchases of aerospace products. In this the State, in consideration of such a purchase from a foreign based company, requires that a proportion of the contract value be placed as work in its own related manufacturing sector. Current examples of how widespread and complex these have become are given and analysed by reference to a matrix of possible types of offset and levels of industrial development of the purchasing State. On the assumption that the efficient diffusion of appropriate industrial capabilities to all nations of the world is a desirable goal, the use and abuse of offset to this end is discussed and conclusions drawn.