The document analyzes changes in the defense technology market and military strategies since World War II, highlighting the necessity for continuous R&D and adaptation in response to evolving threats. It discusses the shift towards privatization and outsourcing in the defense sector, emphasizing the impact of national systems of innovation and the challenges posed by budget constraints. Additionally, it forecasts potential gaps between military operational demands and the capabilities of the defense industrial foundation due to future financial limitations.

1. Military Threat, Defense Technology Market Driver
Mohammad Aljeemaz, DBA researcher
Introduction:
The purpose of this article is to explore
the trend of the defense technology
changes in global market according
with
military
shaped
the
Production.
threat
changes
Industrial
And
if
the
that
Military
defense
technology approaches communicate
with today’s business representation of
the
defense
industry.
If
defense
technologies act in response to an actual requirements needed to meet a critical threats. If
defense technology move toward the applicable requirements even after the Cold War
period. Does the defense companies focus on maintain defense technology industries
domination?
During World War II each side of the fighting parties (Blue Party) Vs (Red Party) where
trying to maintain the battle superiority to win the war. Since then, the requirement to
enhance the defense technology becomes essential. The defense industries start to grow up
very rapidly in parallel with research and development (R&D) process. “Despite the end of
Cold War, armed forces continue to allocate a large share of their investment effort to defense
R&D, particularly in arms-producing countries” (Bellais, R. 2013).
Technology Defense Driven Market:
As Väyrynen (1983, p. 63) states, “the invention of the atomic bomb modified entirely the
importance of technology towards national military policies”. The 21 century defense
technology paradigm reflects the major changes and the shift in the Ministries of defense
foreign procurement approaches as driven by defense technology changes and R&D. The
industrial approach also stayed after the fall down of the Soviet Union 1n 1991. The mass
production of high tech military products in all platforms drives the defense market and
able to deliver the required capabilities that ministries’ of defense require for today’s

2. confutations. This explains why the defense company’s predominance and survival through
the years as they dealing with ongoing and expanding confrontations which seems to
remain a core business strategy constraint in up to date and potential technology defense
process.
Military Transformation:
The military transformation visionaries says “If Cisco system makes vital networking
equipments for Wal-Mart, Perhaps Cisco can and should make similar equipments for the
military” (Dombrowski, & Gholz, 2006). This type of argument reflects the level of defense
technology affordability for the commercial firms which could lead to out sourcing the R&D process
and save cost.
More than that the privatization of the governmental defense activities start to become
more frequent practice “For much of human history, armies were privately organized, and
arms were produced by craft workers for pay or barter or in feudal arrangements. With the
rise of the nation state that twin notions of the state’s right to the monopoly of force and
the citizen soldier evolve” (T. Adams; Avant 1999).
The NSI Concept:
A national system of innovation (NSI) described as “the network of institutions in the
public and private sectors whose activities and interactions initiate, import, modify and
diffuse new technologies” (Freeman 1987, 1). This type of description would explain the
defense technology network between the commercial and defense firm’s coordination and
exchange in the military market. However each of the elements that mentioned could lead
to problematic issue in some practices like the defense technology transfer and
distribution. However the definition on the other hand included the important elements of
the National System concept.
The most important advantage of the national system of innovation concept is the influence
that provided to firms. While the traditional economic assumption describe the innovation
in the institutions as the process of enhancing (machine running on automatic pilot), and
looking forward to initiate standard business models of defense technology distribution
around the institutions, besides it provides a cretin freedom for the function of government

3. strategy, legal firms, learning and schooling firms. So the accomplishment and malfunction
in innovation could be caused by any of the ingredient fundamentals of the integration
system.
The Defense Industrial foundation:
The Deputy Under Secretary of Defense for Industrial Policy cleared in 2007 and stated the
defense industrial foundation as “the Department of Defense, U.S. Government, and private
sector worldwide industrial complex with capabilities to provide professional services,
perform research and development, produce, deliver, and maintain Defense systems,
subsystems, or components to meet military requirements necessary to fulfill the National
Military Strategy” (Krieg 2007). Another author also descript the defense industrial
foundation as “those industrial assets which provide key elements of military power and
national security: such assets demand special consideration by government” (Hartley 2007).
Due to the ongoing changes that keep happened to the defense industry and its association
with the national defense government. And the fall in defense market causes due to
budgets cuts in the early 1990s, Market recession and demands reduction of the military
production occurred caused to decrease so many of military production firms and merged
or transferred into the larger military production firms that still survive until today. The
other side of changing is happening to financial departments that budgeting the
requirements as they should revise their strategy towards the defense competition. The
outsourcing or the privatization could be the best practice now recently to achieve the
target of reducing cost and improve the performance and maintain long life competition. “It
is virtually certain that defense budgets of the future will be lower, due to the growth in
entitlement spending and projected federal deficits” (Walker 2004).besides the alteration
of the reflection for the defense industrial foundation in the future will be more toward the
financial cuts. And because of this fact, a severe gap will be created between future 21
century military operational necessities and the current capability of the defense industrial
foundation.

4. References:
Bellais, R. (2013). Technology and the defense industry: real threats, bad habits, or new (market)
opportunities?. Journal of Innovation Economics & Management, (2), 59-78.
Dombrowski, P. J., & Gholz, E. (2006). Buying military transformation: Technological innovation and
the defense industry.
Markusen, A. R. (2003). The case against privatizing national security. Governance, 16(4), 471-501.
Reppy, J. (2000). The place of the defense industry in national systems of innovation.
Markusen, A. (2000). Should we welcome a transnational defense industry?. The Place of the
Defense Industry in National Systems of Innovation, 25-47.
King, D. R., & Nowack, M. L. (2003). The impact of government policy on technology transfer: an
aircraft industry case study. Journal of Engineering and Technology Management, 20(4), 303-318.
Gansler, J. S. (2011). Democracy's arsenal: Creating a twenty-first-century defense industry.