The development of emerging market defence enterprises: late industrialisation, catching-up, and the challenge of moving beyond linking and leveraging1

Abstract

We examine how emerging market defence entities, as industry latecomers, have internationalised and gained market share, and affected industry dynamics. It investigates the role that sectoral innovation systems and industrial policies have played, and whether and how these defence entities have been able to develop their indigenous innovation capabilities. Four in-depth country cases are analysed longitudinally, from the inception of their domestic military industries into the present - namely Singapore, South Korea, Turkey, and the United Arab Emirates. We find that the policy landscape through industrial policy and government support, combined with shifts in technology and demand, created conditions for emerging market defence entities to engage in limited catch-up with incumbents. We highlight the challenges they have had in moving beyond linking and leveraging in developing their indigenous industrial capabilities. We contribute towards our understanding of the interplay between sectoral innovation systems, industry latecomers and the role that internationalisation can play in taking advantage of possible windows of opportunity. We show how the industry specificities of the defence sector have restrained some of these opportunities and similarly how domestic sectoral innovation systems can either facilitate or impede the exploitation of these opportunities.