The independent resource on global security

5. Arms production


I. Introduction

II. Developments in the arms industry, 2009–10

III. Motivations, barriers and capability in arms production

IV. The Israeli arms industry

V. The South Korean arms industry

VI. The Turkish arms industry

VII. Conclusions


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Despite the financial crisis of 2008 and the ensuing global economic recession, arms producers and military services companies continued their upward trend in arms sales. At the same time, large-scale acquisitions returned to the arms industry in 2010, while acquisition activity in general increased, including acquisitions by non-OECD countries in OECD arms markets. The military spending cuts proposed in 2010 in Western Europe and the USA are likely to have an impact on arms producers in the future, but to what extent remains to be seen.


Companies outside of North America and Western Europe—those regions that dominate the SIPRI Top 100 and the global arms industry overall—also displayed resilience in light of the economic recession.


As smaller OECD countries outside the Euro-Atlantic region with arms producers in the SIPRI Top 100 for 2009, the cases of Israel, South Korea and Turkey illuminate small state experiences in pushing for globally competitive arms industries. In each case, the underlying technological and industrial infrastructures have determined when and to what extent technological developments are integrated into domestic arms production and whether the integration leads to indigenous technological sophistication.


Access to arms technology via transfers is also a key factor in the development of domestic arms industries. A requirement for offset investment in return for large arms procurement contracts can lead to technology transfers, although limitations are imposed by the USA on re-exports of US technology. In contrast, domestically funded military research and development allows national control over the resulting technology.



Dr Susan T. Jackson (United States) is Head of the Arms Production Project of the SIPRI Military Expenditure and Arms Production Programme.

Dr Susan T. Jackson