| Abstract: |
Within the defence sector there have been marked changes in the nature of the
composite industries. This is particularly true of the electronics industry
which continues to grow in importance, with electronic components built into
nearly every weapons system and piece of equipment. Given the “Revolution in
Military Affairs” (RMA) it seems certain that this growth will continue,
impacting on both product and process. The result, however, may not be the
contestable open market many expect (and hope for) as Network Enabled Warfare
may result in new entrants, such as IT specialist and increased competition.
Alternatively the nature of the market may continue to benefit the incumbents.
This paper presents an analysis of the changes taking place in the industry
using firm-level, primary, survey-based, qualitative data on corporate
conduct. The results suggest that in practice the incumbents do seem to be in
a strong position. The new demands of the customer require much more than mere
technical capability. Specialists who do not have established industry
relationships, who do not understand industry “protocols” and who cannot
communicate effectively with the customer are unlikely to survive. This
suggests that rather than new entrants, there may in fact be exits from the
industry and further consolidation. |