Trends and Challenges in Aerospace Offsets (1999) / Chapter Skim
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Panel II: The Policy Context for Military Aerospace Offsets
Panel II: The Policy Context for Military Aerospace Offsets
Pages 29-37
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From page 29... ...
Thus, economies of scale are very important. The higher the volume, the more fixed development costs and production costs can be spread across the entire production run and the greater the learning effects.
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From page 30... ...
and indirect by providing components for European weapons systems so that they do not need to develop a particular technology embodied in the component themselves. The United States has thus created a system in which it cooperates technologically while competing for sales.
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From page 31... ...
The intensified competition increases the transfer of advanced capabilities overseas, resulting in a heightened threat that then requires higher levels of domestic R&D to maintain a technological lead. There are two possible scenarios for the outcome of this dilemma: a much higher level of defense spending or a more unsafe world for the United States.
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From page 32... ...
Mowery, in that he believes there are a number of examples in which military technology transfer has had an impact on commercial aerospace technology. Western Europe started out with a high commercial aviation base and therefore was not as strongly impacted by military technology transfers.
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From page 33... ...
Countervailing would lead to a competitive spiral, because European governments and European industry cannot simply give up attempting to maintain their own domestic production. Therefore, a more complicated solution for the trading regime is needed.
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From page 34... ...
However, it is important to have some mechanism of cooperation to get out of this prisoners' dilemma without driving values to the bottom and continuing to proliferate weapons. A solution for future weapons systems may be to develop competing transatlantic teams in which we agreed in advance on the military needs for the alliance and on the percentage of the production that the United States and Europe will each buy.
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From page 35... ...
As was pointed out earlier, venture capital is especially important in commercial aerospace, whereas government procurement is key to military aerospace. Military aerospace is a less risky business, but more subject to government regulation.
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From page 36... ...
Johnson pointed out that, whereas export licensing is an important government export policy instrument, it is a case of easing a negative barrier on the industry rather than actively helping. In addition to the policy concerned, there is also an administrative problem with export licensing.
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From page 37... ...
It was explored in some depth by a previous National Academy of Sciences' study on trade in technology, although no consensus was reached on the issue. The STEP report, Conflict and Cooperation in National Competition for High-Technology Industry, summarizes the competing views and provides useful source material.3 A companion volume, International Friction and Cooperation in High-Technology Development and Trade has two relevant papers.
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