Defense Companies Research Articles

The impact of COVID-19 on A&D industry

Subject. The article considers global aerospace and defense companies operating in conditions of COVID-19 pandemic. Objectives. The focus is on systematization of experience in combating the pandemic and analysis of changes in the global aviation market that need to be reflected in the development strategy of the Russian aviation industry. Methods. The research methodology rests on the comparative analysis. Results. The analysis showed that COVID-19 pandemic had practically no impact on the military segment of the aircraft industry. Restrictions on international transportation changed the ratio between international and regional air transportation in favor of the latter. At present, narrow-body jet aircraft with a capacity of 120–150 seats, regional aircraft of medium and large capacity, and general purpose aviation are the most popular. The business segment faces increased competition. The revenues of commercial aircraft manufacturers show a dramatic decline. Conclusions. Diversification of defense and aerospace companies enables to overcome the crises caused by the COVID-19 pandemic. However, a sharp drop in demand for air transportation entailed restructuring in the global aviation market.

Technology transfer and defence sector dynamics: the case of the Netherlands

ABSTRACT State defence and security policies rely mostly on their military capabilities. The latter are ensured through research and development (R&D) as well as procurement, which are subject to defence industry dynamics. Furthermore the defence sector is heavily dependent on public funds; the latter can be more easily allocated if related R&D has a spill-over effect on the civilian sector, creating the potential for a bigger and more globally (or regionally) integrated market. This article investigates, then, how technology moves, and whether defence sector innovations create spin-offs in the civilian sector in the Netherlands. We aim to provide an industry-centred perspective on defence sector dynamics and potentials. For this, the article attempts to answer the following questions: Are defence technologies transferred to the civilian sector? What lessons can be derived from the Dutch case? To address these research puzzles the article’s theoretical framework builds on the technology-transfer literature in analysing the case study of the Netherlands. The basis for this is 23 interviews with representatives of Dutch defence companies that were carried out both in a workshop and in one-to-one settings in May and June 2020.

New Industrial Models and Management Systems in of State Corporation «Rostec» Companies

The article aims to systematize the characteristics of new industrial models that have developed in the divisions of «Rostec» Group of Companies. The transition to new control systems and industrial models are illustrated by the ongoing changes in the aviation cluster of «Rostec» Group (Russian Helicopters Holding, United Propulsion Corporation) and the United Aircraft Corporation (UAC). The author considered the measures of massive institutional and investment support from the state for defence companies implementing new industrial models. When working on the material of the article, the author used methods of comparison and systematization. Also, the methodological apparatus of factor, structurallogical and institutional analysis was applied, proving the consistency of state policy and the activities of defence companies transforming their industrial models.

Некоторые аспекты развития европейской оборонной промышленности

As a result of the analysis of defence spending in European countries for the period 1990–2022, the author reveals a trend towards underfunding of their defence-industrial base. Due to the fall in defence spending, there is a reduction in European defence companies in Europe, some companies go into the commercial sector, the other part is trying to consolidate. The armed forces of European countries conduct exercises and fight on a multinational basis, and purchase weapons on a national basis. This situation does not allow industrial enterprises to consolidate demand, which makes it possible to increase production volumes. By researching the state of the defense-industrial base of European countries, it becomes evident that there are disagreements between the states of Europe about which is better to buy samples of weapons. Some are in favor of purchases in the United States, others – for joint European projects, and others – for national ones. For example, for fighters, we are talking about choosing between the F‑35, Eurofighter Typhoon, Dassault Rafale or SAAB. A study of data on arms exports from the United States to Europe shows that Europe has lost its status as the main export destination of the United States. The results of research illustrate that the procurement of weapons is a long and complex process, the programming of the construction of the armed forces and the costs are planned, taking into account the threats of tomorrow, in advance. The research findings indicate that the prevailing conditions of peace and stability of the last 30 years have shaped the image of the defense industrial base of European countries unable to produce military products in large quantities and in a short time. The author comes to the conclusion that the ambitions of Europe exceed the available resources.

Влияние Brexit на отношения Великобритании и ЕС в сфере безопасности и обороны

The article deals with the dynamics behind the post-Brexit European Union-UK security and defence engagement which is particularly relevant and critical to understanding the key dimensions and structural features of regional and global security in the foreseeable future. The urgency of the problem is determined by the fact that the decision to leave the UK from the EU, coupled with the subsequent negotiation process in security and defence spheres, taking into account global and local issues, is a serious challenge to the further functioning of the EU as an integration association. To achieve article goals, a structural-functional version of the system analysis is used, aiming at structural characteristics of the UK exit from the EU. The specificity of the object under consideration also predetermined the use of the decisional method, which allows to focus on the decision-making centers (the European Union and Great Britain), the process of developing and implementing decisions in EU_UK security and defence interactions. The empirical base of the study is made up of several groups of official documents that are directly related to the problem. The first group is represented by official treaties and declarations on the Brexit issue. The second group includes materials from the British Foreign and Commonwealth Office, the Prime Minister's Office, analytical reports, the official parliamentary documents. The third group is represented by the documents of the European Union: strategic documents, materials of the European Council, the EU Commission, speeches and interviews of the official representatives. It should be underlined that currently there is no legal framework with which the parties could develop and coordinate joint responses to emerging foreign policy challenges and threats in military security. The question remains whether prospective cooperation will be ad hoc, caused by the need to respond to each specific threat or challenge, or the approach will be more strategic, planned, long-term and proactive. A special factor increasing the entropy of the post-Brexit British-European dialogue on security and defence is the creation of the trilateral military-political association AUKUS with the participation of the United Kingdom, the United States and Australia. The main outcomes of the article include the points that, for the EU, the main challenges of post-Brexit security and defence relations are the inability to use London's scientific and technological potential, its significant experience in countering terrorism, the capabilities of the British naval forces, a high degree of coordination with the US intelligence services. For the UK, significant risks are the restriction or even complete cessation of participation in the CSDP missions, the European Defence Research Program, PESCO projects, the breaking of a large number of technological chains for defence companies.

체계공학 기반 안티탬퍼링 프로세스

Recently, advanced weapon systems such as 3000-ton-class submarines and 4.5-generation fighters are being localized, and exports of various weapon systems are increasing significantly. Our defense science and technology level was ranked ninth in the world, and weapon system exports were ranked ninth in the world in 2020. On the other hand, cyber attacks targeting advanced weapon systems are also on the rise, so the need to protect the technologies of defense companies while protecting the technologies of weapon systems for export is growing. The Defense Industry Technology Protection Act, enacted in 2015, defines defense technology as a technology that needs protection among defense science and technology, and compels defense companies to build a defense technology protection system. However, the focus is only on the defence industry’s technology protection system, and there is no system for protecting the weapon system technology, which is being exported, and the related research is insignificant. In this paper, we studied a weapon system anti-tampering process that can be applied to the defense weapon system R&D procedure as a way to protect the defense technology of the weapon systems. The proposed method linked the anti-tampering process to the technical review meeting for each stage of systems engineering procedure. Also we defined the anti-tampering secuity grade so that the target level to be implemented, and the process of determining the anti-tampering technology based on the identification of the defense technology and the risk assessment, and also the identification procedure for applicable anti-tampering technologies.

방위산업 생산성 향상을 위한 PMS 제도에 관한 연구

This study was conducted to encourage the dissemination and spread of PMS system to defense companies in order to systematically develop and foster the national defense industry. Based on Article 27 of the Industrial Development Act, the current Productivity Management System(PMS) system is implemented to improve the livelihood of businesses under the leadership of the government, and the productivity management system has been applied and utilized for large enterprises/medium-sized enterprises/public institutions since 2013. I n the defense industry sector, the results of a survey other than financial statements showed that i t has not only sought to increase sales and improve productivity of defense companies but also contributed directly or indirectly to strengthening competitiveness since 2013 when the PMS system was introduced. Through this, it was possible to encourage the spread of the PMS system in the defense industry and to present policy suggestions to improve the productivity of defense companies and improve management performance dramatically.

Product lifecycle management application selection framework based on interval-valued spherical fuzzy COPRAS

Digitalization is the key trend of the Industry 4.0 revolution. Industrial companies are transforming the way they design and maintain their products and solutions. The user requirements become more demanding. Competition among the manufacturing companies is at its limits and transforms the products to be more complex. Yet, other challenges such as faster time to market, higher quality requirements and legislation force enterprises to provide new ways of design, manufacture and service their end products. Product Lifecycle Management (PLM) is a key solution to track the entire lifespan of the product from idea to design, design to manufacture and manufacture to service. Besides the complexity of products and production, the selection of the right PLM solution which will become the backbone of enterprises is an open problem. In this paper, a thorough literature review is conducted to analyze the most important features for selecting the right PLM solution for manufacturing firms. Moreover, to overcome the challenge of decision makers’ (DM) subjective judgments, a novel interval value spherical fuzzy COPRAS (IVSF-COPRAS) multi-criteria decision making (MCDM) method is introduced. The paper aims to help enterprises rapidly identify the best alternative vendor/solution to be selected based on the need of the organization. In order to show the applicability, DM inputs are collected from a leading defense company where the PLM selection process is ongoing. The industrial case study is provided to demonstrate the success of the proposed selection framework.

Methodology for selecting corporate information systems in the conditions of digital transformation of a defence company

A methodology of expert analysis of the market of alternative corporate information systems (CIS) is proposed in order to choose the platform for creating a CIS that fully meets the requirements of a particular defence company. The proposed methodology is based on a set of adapted methods of the decision support theory applied to the problems of multi-criteria collective choice of alternatives.

Current state of administrative legal relations in the field of execution of the state defense order

Problem setting. The article states that the state defense order is a kind of means of meeting the needs of defense and national security. Administrative and legal support of the state defense order is a kind of tool for regulating relations n the field of defense to develop a regulatory framework to protect the interests of the state. The Ministry of Strategic Industries has recently been established to shape and implement state industry and military policy. Cooperation between Ukraine and the North Atlantic Alliance in the field of defense is also very important. The target of research is to study and analyze the current state of administrative legal relations of executive bodies in the field of state defense order, to identify features of relations between participants in the state defense order, to determine the main principles of implementation, execution and control of state defense order. Analysis of resent researches and publications. Many leading domestic and foreign scholars have devoted their research works to solving the complex problem of national security. In particular, these are such scientists as V. Bogdanovich, V. Govorukha, O. Goncharenko, A. Kaczynski, G. Kostenko, D. Kuchma, M. Lytvyn, O. Litvinenko, V. Manilov, G. Perepelytsia, I. Rozputenko, E. Skakunov, A. Semenchenko etc. Article`s main body. Under the auspices of the Commission, there are a few joint working groups working in specific areas, including fruitful cooperation in the field of defense and security and armaments reform. The regulatory framework is gradually being modernized and national legislation is being brought closer to world standards, including those of the European Union and NATO. With the enactment of the Law on Defense Procurement, the systemic work of public authorities was expected to be improved, but orders, procedures, regulations, etc., which should have detailed the procedures described in the Law, have not been worked out yet. As new procedures for defense procurement at the level of bylaws have not been developed, this may significantly complicate or even make it impossible to meet defense needs with the necessary goods and services. In addition, until recently, the largest supplier of the latest weapons and services for the repair of military equipment for the Armed Forces of Ukraine was the state concern Ukroboronprom. However, recently, as a result of manipulations, the form of management of the concern has led to numerous corruption risks. Due to such opaque and politically dependent construction, defense companies lost funds, means of production, production facilities and other property. Such changes are being implemented in order to bridge the technological gap between the states of the national defense industry sector and the world’s leading defense companies. Thus, corporate governance models are introduced in enterprises – in accordance with the standards of the Organization for Economic Cooperation and Development, which is projected to minimize corruption risks and political pressure. Conclusions. It is planned to create joint projects, programs and enterprises with foreign partners, which will open new opportunities for enterprises of the defense-industrial complex of Ukraine. It is also planned to attract investments, including foreign ones, in order to modernize production and introduce innovations, etc. Branching and qualitative clarification of the regulatory framework are the main tasks today for the legislature and the executive in the field of public defense procurement.

Основні проблеми оборонно-промислового комплексу та шляхи їх подолання

Проаналізовано діяльність оборонно-промислового комплексу (далі – ОПК) за роки незалежності України. Окреслено основні проблеми оборонно-промислового комплексу України та запропоновано способи активізації та розвитку у сфері ОПК України. Здійснено аналіз зарубіжного досвіду щодо державної підтримки оборонних підприємств, метою якої є переоснащення Збройних сил. Наведено позитивні зрушення в управлінні комплексом загалом та оборонними підприємствами зокрема після створення ДК “Укроборонпром”. Розглянуто перспективи розвитку оборонно-промислового комплексу України в сучасних умовах. Доведено необхідність реформування, передусім на законодавчому рівні оборонно-промислового комплексу України. Визначено особливості правового, економічного та організаційного регулювання перетворення Державного концерну “Укроборонпром” в акціонерне товариство.

VALUE CREATION OF A DEFENCE INDUSTRY IN A NEW COMMUNICATION AND INFORMATION ENVIRONMENT

An important tendency in managerial decisions is the focus on taking into account the law of the community and local communities. Managers, in accordance with the theory of stakeholders, should take into account the needs of various players. We also support for this in the concept of corporate social responsibility, sustainability or creating shared value. The aim of the article is to present the essence of the influence of secondary stakeholders on the creation of the value of defense enterprises resulting from public relations using digitization and socio-economic globalization. The results of the conducted research will allow to confirm the legitimacy of decisions made by defense companies, taking into account the maintenance of social relations, especially in the new communication and information environment.

Future Horizons

In a rapidly changing world defence companies have to contend with significant uncertainty as their industry is transformed.

A comparative analysis of foreign and domestic managers' profiles in the defense and aviation industry: The case of Turkey

This study examines and analyzes foreign and domestic managers’ profiles in the defense and aerospace industry. C-level managers and senior executives of leading defense and aerospace companies abroad are compared with senior executives in Turkey. In addition, short and long term solutions are outlined to address the skills gap that exists in the Turkish defense and aerospace industry, which has become one of the most important sectors in Turkey.

Institutional Arrangements and Processes Rotation of Assets of Defense Industry Corporation

The article assesses the place and role of institutional design in the processes of consolidation and restructuring of the assets of defense industry companies (defense industry complex), discusses the possibility of adjusting measures aimed at activating the activities of defense companies in the context of growing geopolitical tensions, forms and methods of effective institutional management of the process of modernization of the main economic entities of the defense industry: Rostec State Corporation, Roscosmos State Corporation, United Shipbuilding Corporation (USC), etc. Its scientific novelty consists in the development of a comprehensive view of the institutional design of the processes of consolidation and rotation of the assets of defense companies in the context of the ongoing sanctions regime. Among the directions of changes in the institutional structure for the development of defense companies are analyzed: the creation and dissemination of common requirements (universality and compatibility) to the processes of design and production of products; the emergence of new leasing programs for technological equipment for various industries with preferential treatment; improving the system of publicprivate partnership (PPP) in certain dominant areas of development (microelectronics, IT-technologies); participation of defense industry companies in investment projects in special economic zones (SEZ) and territories of advanced development (TOP); localization of production within the framework of import substitution; updated approaches to the financial recovery of defense industry enterprises against the background of the preparation of large-scale changes to the bankruptcy law; maintaining a favorable institutional background in the M&A market for defense enterprises, etc.

Increasing Return: Supply Chain Economic in the Development of Indonesia’ Defense Industry Independence

The purpose of this study discusses increasing returns: economic supply chain in the development of the independence of the Indonesian defense industry. This research is a qualitative research, the type of research uses a comprehensive analytical study and analytical normative approach. The concept of supply chain economics shows that integration and harmony between engineering fields with economic and social science are very important to be reconstructed to produce Indonesia's best economic competition performance. Independence in making defense equipment must continue to be utilized and developed. By making its own defense equipment, Indonesia will get various benefits, from the economic benefits of the emergence of defense industry clusters that will help drive economic growth, provide plenty of jobs, and enhance technological capabilities. Technology is an aspect that can distinguish a country's defense capabilities from other countries. If the mastery of technology can be carried out by defense industry players in Indonesia, this will be a big advantage for Indonesia's defense forces. Guiding corporations or defense companies is as important as industrial coaching. Defense industry companies actually become a vehicle and the spearhead of the formation of an independent, professional, efficient, modern, and innovative defense industry as well as implementing good corporate governance. Corporate development can include aspects of strategy, managerial, production, efficiency, and marketing

Influence of Financial Liquidity on the Competitiveness of Defense Industry Enterprises

Purpose: The aim of the article was to analyse the correlation between financial liquidity and the competitiveness of enterprises from defense industry enterprises. Design/Methodology/Approach: The solutions were developed on the basis of literature analysis, case study, document analysis. As part of the case study were used diagnostic and prognostic sheets, as well as the analysis of source documents. The analysis of financial liquidity was performed using the induction method, which includes examination of details, generalization in the form of conclusions, synthetic evaluation and diagnosis. The time scope of the research covered the period 2015-2018. Four defense companies in the world were selected for the purpose of the research. Findings: The analysis of four enterprises from the defense industry shows connection between the financial situation (measured by liquidity ratios) and the competitiveness of the surveyed companies. The most stable company, one of the leading defense in the world, is Northrop Grumman. In turn, United Aircraft is characterized by a large dispersion of results and negative values of cash flows from operational activities. The article is also an overview of competitiveness, showing the diversity in managing the resources of an economic unit, and indicates practical guidelines for the use of methods and interpretation of the financial liquidity ratios of enterprises. Practical Implications: The results of the research can be used by company managers, both from the defense industry and others, to create mechanisms that increase competitiveness. Originality/Value: The study is a new contribution to research into the competitiveness of defense companies. The aspects of the competitiveness of defense enterprises on the basis of liquidity ratios remained beyond the area of scientific interest.

방산기술보호 인식 개선방안 연구 : 방산업체 및 방산협력업체 중심으로

본 논문은 2016년 6월 시행된 ｢방산기술보호법｣에 따른 방산기술보호 중요성에 대한 인식 개 선방안을 파악하는 연구이다. 정부는 방산기술보호를 위해 전문교육, 실태조사, 간담회 등 다양 한 노력을 하였다. 본 연구는 그간의 방산기술보호 인식 수준을 파악하기 위해서 대기업, 중견기 업, 중소기업 간의 기술보호 인식 현황을 설문조사를 통해 파악하였다. 설문조사의 분석결과 기 업규모에 따라 방산기술보호 인식수준에 유의한 차이가 있었으며, 연령에 따라 방산기술보호 인 식수준의 차이가 있는 것으로 나타났다. 특히 20대와 30대는 방산기술보호 중요성에 대한 인식 수준이 낮은 것으로 분석되었다. 또한, 개인이 생각하는 것보다 기업차원에서 방산기술보호에 대한 인식과 수준이 높게 나타났으며, 기업의 규모가 클수록 기업의 직원들은 회사차원에서 높 은 수준의 방산기술보호를 수행하고 있다고 생각하는 것으로 분석되었다. 마지막으로 방산기술 보호 종합계획 및 실행계획을 수립하는데 정부의 정책방향과 대민 교육정책을 수립하는데 시사 점을 제공한다.

Networked politics and the supply of European defence integration

ABSTRACT Defence integration is frequently in demand but hardly supplied. Sovereignty concerns and a desire for national control constrain integration of the core state power of arms production. The European Aeronautic, Defence and Space (EADS) company (today’s Airbus Group) stands out as an exception to this rule. How was this instance of defence integration supplied? We suggest a two-step network mechanism. First, the structure of national networks shapes the capacity for collective action. Centralised networks are better in forming a joint national position than fragmented networks. Second, networks also operate at the transnational level, shift domestic power balances, and enable agreements. Our process-tracing analysis demonstrates how Germany’s centralised network smoothly adopted a stance on a European firm under private control, whereas domestic negotiations stalled in France. However, a transnational alliance ultimately posed credible threats of exclusion and could overcome this deadlock. Therefore, EADS was both European and predominantly private.

Пандемия коронавируса и перспективы развития оборонно-промышленного комплекса Европейского союза

The article analyzes the impact of the current crisis on the defence policy of the EU countries. Coronavirus has had a negative impact almost on all industries. According to the forecast of International Monetary Fund the growth of the world economy is expected to be at the level of -4.9%. In such conditions where social sphere including medical is going to be the most important one, governments are faced with the problem of relocation of their expenditures. Therefore, the military expenditures probably would suffer cuts like it was during last crises for example financial crisis of 2007-2008. The EU defence industry is also influenced by coronavirus crisis, this was yielded in the downtime and supply dates shifts during lock down. However together with armed forces defence companies were engaged in fight with coronavirus: production of medical and protective equipment, disinfection, transportation and etc. But these efforts cannot be considered as an efficient measure to limit negative impacts of coronavirus crisis on the prospects of defence industry. The following coronavirus crisis consequences for the defence industry can be outlined: stock prices fall, civil aviation crisis, supply chain disturbance and difficulties for small and medium enterprises during lock down. Such effects of course can slow down the development of the defence industry and complicate the operation. However the most crucial one is military expenditures cuts, because such changes put defence industry in the new environment with reduced demand for arms. Defence cuts are also a threat to the joint EU defence industry development programs. The importance of these programs is that their goal is to contribute to the military capability of the EU and these programs could be used for coronavirus crisis consequences overcome. However the budget allocated for these programs was also cut, so their implementation is hampered. But defence companies and their associations are working on the plans to boost the development. The author believes that in such conditions the key point for the successful overcome of coronavirus crisis and further sustained development of the EU defence industry is the joint efforts in this direction. The current level of cooperation between member state in the sphere of defence industry is not enough not only for the overcome of coronavirus crisis, but also for the development even in the standard conditions. Therefore the deepen of the cooperation is required and important like never before. As a result current crisis situation is a chance for the EU defence industry to joint the efforts in the defence sphere and expend integration in defence and security.