The rising unit cost of defence equipment — The reasons and the results

Abstract

This paper constructs a conceptual model for the selection of defence equipment providing best value for money. It then shows how the unit cost of the chosen equipment increases between one generation of equipment and its successor because of developments in the perceived threat, the available technology and industrial productivity, and demonstrates that unit cost increases can arise from a logical and rational procurement policy and are not necessarily caused by technological chimeras and military vainglory. The resulting persistent rise in unit cost is unlikely to be significantly slowed by any of the counter‐measures yet proposed. The paper then discusses the policies which nations have adopted to accommodate past increases in unit cost, and the options which confront any nation at the point when it can no longer afford to re‐equip a particular element of its armed forces.