Currently, more and more countries are directing their defense industries towards export. There are several economic, strategic, and operational factors that have led to this trend, which emphasizes the importance of military exports in light of maintaining a sustainable defense industrial base. This article addresses the reasons for this phenomenon as well as the multiple forms of ideas associated with the export-oriented defense approach.
The shift to an export-oriented defense industry framework is well-documented in the current literature, where many studies examine the reasons that make this transition possible economically, strategically, and operationally. In fact, studies indicate that countries, especially in the post-Cold War era, have restructured their defense sectors to maintain competitiveness and cope with shrinking national defense budgets. For example, countries have increasingly seen exports as a source of revenue stability for both employment and economies of scale to support defense companies.
One of the very attractive factors for countries towards exporting defense equipment is the potential for significant economic benefits. With defense budgets declining at an alarming rate - especially in the United States, where the Department of Defense is expected to cut spending - defense manufacturers must seek other sources of income. Street and Peterson (1993) mention the strategies used by American defense companies to offset their national income losses due to military export sales - such as selling F-16 fighters to Taiwan for $5.8 billion, or selling F-15 fighters to Saudi Arabia for $9 billion. However, the ability to export has implications for the operational stability of defense companies and job security.
Moreover, defense exports can generate economies of scale, as producers reduce unit production costs. Kritskaya (2023) points out that the potential to increase the volume of goods produced through export allows for the distribution of fixed costs over a broader production base, enhancing cost efficiency. This cost reduction is particularly significant for countries like South Korea, which seek to maintain their price competitiveness in the global arms market.
Aside from economic reasons, strategic considerations also play an important role in the choice of an export-oriented defense industry. The post-Cold War security environment has prompted countries to reconsider their policies regarding arms trade, realizing what true operational compatibility with their allies entails. According to Wilson (2023), arms export is critically important because American military forces will be able to interact effectively with the military forces of allied countries, thus developing strategic partnerships.
According to Gold and Tishler (2023), the international arms market is highly competitive, thus its dynamics require countries to increase their export capacity. The consolidation of defense firms in the United States and Europe has led to a few major defense companies dominating the market. This is a situation that can only be sustained through a greater focus on exports. Since securing contracts will bring in significant international sales, competition requires innovation and improvements in defense products in countries.
Most of the literature so far focuses on how arms exports enable international partnerships and interoperability with allied armed forces in service of competitive positioning in a highly competitive global market. Countries like Turkey can radically shift from client states to competitive players in global arms markets through innovation and increasing their export potential to enhance their geopolitical influence alongside economic stability.
The contexts of international arms trade allow a country to build its technological capabilities through collaboration and joint research and development efforts. An export-oriented defense industry can, in turn, offer significant operational benefits. For example, the Spanish defense industry has greatly benefited from international cooperation concerning technological knowledge development and export-oriented growth (Fonfría & Duch-Brown, 2023). This cooperation not only provides the incentive to build advanced military technologies but also leads to reduced research and development spending through resource sharing.
Furthermore, this export enhances a country’s influence over its allies, as importing countries rely on the exporting country for defense support and training. Relationships like these lead to the formation of deeper forms of diplomatic relations and significantly contribute to regional stability (Kritskaya, 2023). The strategic consequences of arms exports go beyond mere economic transactions and touch on broader objectives in foreign policy and national security enhancement.
In other words, international arms trade fosters technological development and unifies the reduction of research and development costs through the formation of partnerships with foreign partners. This enhances national and regional security through deep diplomatic ties.
The global arms market is characterized by a high degree of competitiveness, as many nations strive to seize this market. U.S. arms exports are nearly $18 billion annually in military goods. Most of this has been achieved through new production, as Street and Peterson (1993) illustrate. To compensate for expected losses in domestic business, American manufacturers will need to export up to two or three times the current level. The need to increase exports becomes even more crucial in the face of most other countries striving to boost their military exports in a highly competitive global market. As they noted regarding what dictates the volume of military exports from the United States: "Countries facing economic recession are likely to cut their defense budgets, negatively affecting demand for military exports".
The export-oriented defense industry is multifaceted, with economic, strategic, and operational factors. As countries become aware of the characteristics of the international arms market, earning income through military exports has become increasingly important to maintain their defense industrial structures. In fact, enhancing international cooperation and interoperability with other nations may enable them to leverage their defense sectors for broader geopolitical purposes. Thus, the political orientation towards defense exports not only enhances national security but also boosts economic power in the defense industry.
This is an AI-generated English translation. The original text is in العربية
PhD Researcher in Defense Contracting and Cooperation Policies
