Ambiguous effect of arms export on the development of the Russian high technology industry

Abstract

The paper reviews the role of military products export in the development of the Russian science-intensive and high technology sector. The conflict between the government defense order and export orders, which are the driving factors behind the development of Russian defense industry enterprises, is analyzed. The authors examine the key trends of the development of global arms markets with the focus on the Russian arms and military equipment share and estimate the prospects for growth of the most significant market segments in 2014–2016. It has concluded that in the conditions of the new round of crisis in the world economy comes, the only Russian defense industry enterprises will have the growth opportunities, which are now integrated in the transnational sector of the Russian economy. However their capability to develop successfully will be hugely dependent on both export orders and production for the domestic market. Thus in the near-term the development of the Russian defense industry should be oriented towards the support for the transnational sector, which in the long run will contribute to the technological retooling and production capacities growth of the Russian science-intensive and high-technology production sector.