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The future of the defence firm: the case of the UK aerospace industry

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  • Ian Jackson

Abstract

The focus of this paper is the future of the defence firm within the context of the UK aerospace industry and its supply chain. The analysis considers aerospace markets and the aerospace industry in the UK before assessing the future of the defence/aerospace firm as a case study. The paper concludes that its future in terms of the strategic and important aerospace industry is uncertain. The corporate governance of the defence firm will have to change to reflect the hollowing-out of the firm as the industry experiences significantly less vertical integration. The emphasis of the future defence/aerospace firm will be on 'buy' and not necessarily 'make'. There will also be fewer independent defence aerospace firms as horizontal integration will occur across air, land and sea platforms as well as civil and defence aerospace firms. Indeed, conglomerate integration may even occur with cost pressures and market forces ensuring that merger activity goes beyond defence and aerospace into wider manufacturing industries and, in some cases, service industries in global markets.

Suggested Citation

  • Ian Jackson, 2004. "The future of the defence firm: the case of the UK aerospace industry," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(6), pages 519-534.
    • Handle: RePEc:taf:defpea:v:15:y:2004:i:6:p:519-534
    DOI: 10.1080/1024269042000246675
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    1. Sandler,Todd & Hartley,Keith, 1999. "The Political Economy of NATO," Cambridge Books, Cambridge University Press, number 9780521630931, November.
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    4. De Fraja, Gianni & Hartley, Keith, 1996. "Defence Procurement: Theory and UK Policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 12(4), pages 70-88, Winter.
    5. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
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    Cited by:

    1. Ozgur T rpan, 2019. "Analyzing the Enablers for Turkish Defence Industry Supply Chains: An Interpretive Structural Modelling Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 205-212.
    2. Carlos Martí Sempere, 2011. "A Survey of the European Security Market," Economics of Security Working Paper Series 43, DIW Berlin, German Institute for Economic Research.
    3. Mohammad Nourani & Wen‐Min Lu & Irene Wei Kiong Ting, 2020. "Vicarious warfare and dynamic efficiency of companies in the aerospace and defence industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 641-650, June.

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