Defense Industries in Small and Medium States:Drivers and Policy Challenges

*TOPIC *

Since the Industrial Revolution and especially after World War II, the Great Powers have invested heavily in military technology to maintain superiority and elicit innovation spin-offs. Consequently, state defense sectors have emerged as pioneers and primary drivers of global technological innovation. Innovations initially crafted for defense purposes later permeated into the civilian realm, fundamentally transforming human society. After the end of the Cold War, globalization and geopolitical shifts led to a gradual transfer of technological innovation's leadership from the defense sector to the civilian sector. Nowadays, a significant portion of innovation is driven by the private civilian domain, and the state defense sector increasingly depends on it, marking a notable shift in the center of gravity for innovation.

Notwithstanding this, the recent return of great power conflict, particularly evident in rising tensions in the South China Sea and the ongoing war in Ukraine, has sparked a resurgence of defense spending in various countries. This is compounded by economic development in the periphery, most notably Eastern Europe, the Middle East and Asia. As tensions between major powers escalate and geopolitical rivalries intensify, nations are prioritizing the strengthening of their defense capabilities to safeguard their interests and territorial integrity.

However, few states today possess the defense-industrial capabilities to produce all, or even most, of their armaments domestically. With rising costs, greater technological complexity, and intensified competition in global markets, the prospects for states aspiring to build up domestic defense industries look increasing poor. Yet in the face of these strong headwinds many small- and medium-sized states continue to pursue domestic arms production. Why is this case?

The reason why great powers (or aspiring great powers) try to produce their own weapons is over-determined. Arms production in medium-sized economies, however, does not carry with it the same self-evident military-political justification. Domestic arms production is intuitively attractive for multitudinous reasons. In addition to the national security benefits, many states believe there are economic incentives with domestic production, such as GDP growth, a boon to the wider industrial base and research universities, a source of jobs, and a means of creating intellectual property.

This bundle of incentives does not serve as a guide as to the actual motives of specific states pursuing defense industrialization; neither does it instruct us about the approaches that states are likely to take (or should take) in pursuit of greater domestic production. If the salience of different motives for defense industrialization varies from place to place, then so should the path taken. Because defense industrialization is hard and full of difficult choices, understanding states’ motives is critical.

*PURPOSE *

The purpose of this workshop is to examine so-called second- and third-tier arms-producing states, covering countries who are attempting niche armaments production to varying degrees (e.g., Israel, Bulgaria, Czech Republic, Poland), countries who are trying to replicate larger nations’ defense industrial bases, but on a smaller scale (e.g., Brazil, South Korea, Turkey), and countries who are trying to establish or reinvigorate their domestic arms industries (e.g., Argentina, Saudi Arabia, UAE).

The workshop is aimed mainly at young scholars. This field of study (research on defense industries, and especially in peripheral countries) does not have consolidated institutional or academic environments, such as research centers or dedicated journals. Also, researchers are mostly widely dispersed – literally – around the world.

Young scholars on this subject will have the opportunity to connect with each other, establish ties, share their research and exchange knowledge in different study agendas, backgrounds and points of view, as well as to receive feedback on their work from senior researchers and practitioners.

DRIVING QUESTIONS

Beyond shedding new light on the current policies and practices of various states, the workshop seeks to answer a range of broader questions about the defense industrial strategies on non-great powers, such as:

1) In the face of substantial obstacles, how does one explain the persistence of arms production among second-tier states? What drives arms-production policies in the face of intimidating technological and economic challenges?
2) What is the impact of intangible, non-economic and non-military factors as reasons to engage in defense manufacturing?
3) Can nations ever hope to escape reliance on foreign inputs in critical areas such as design, systems engineering, critical components, and subsystems?
4) If imported weapons are invariably cheaper and often less risky for most states, under what circumstances is there ever an economic rationale for domestic production?
5) How will increased spending and defense-led industrial policies impact development paths and center-periphery economic relations?

FORMAT

The YSI Economics of Innovation working group would like to invite everyone to participate in this two-day workshop, which will take place in Abu Dhabi, United Arab Emirates, at Khalifa University, on February 7th and 8th, 2024.

This workshop, sponsored primarily by Khalifa University, is focused on promoting Young Scholars to present their research projects and strengthen networks with fellow students and academics working on these topics.

Prospective Young Scholar participants are invited to submit an abstract or motivation letter (no more than 400 words) explaining how their research topic is related to the main subject and how participating will enhance their research.

This submission can be according to the driving questions listed above, but not limited to them, and can include papers from fields of study such as:

• Economics of innovation
• International political economy
• Economics of development
• Industrial policy
• Social studies of Science and Technology
• Economics of defense
• International trade
• International relations

The selection process will be based on the clarity of the proposal, research methodology and (preliminary) results. Besides academic considerations, the criteria for assignment would also weigh geographic representation and gender diversity.

The academic committee listed below will be in charge of selection.

For some of the selected young scholar researchers, YSI will provide grants to partly cover travel expenses and/or accommodation in Abu Dhabi. If you would like to apply for a grant, please indicate your interest in the application form.

Organizing and academic committee:
• Martin Novella, adjunct fellow teacher in the University of National Defense, Argentina.
• Ash Rossiter, associate professor of international security at Khalifa University, United Arab Emirates.

KEY DATES
• Deadline for abstract submission: December 8, 2023
• Notification of acceptance: December 22, 2023.
• Workshop: February 7th and 8th, 2024.

LOCATION
Khalifa University, Abu Dhabi, United Arab Emirates.

APPLICATION LINK: https://forms.gle/6wJo87nzbbPqnYJVA