THE IMPACT OF DEFENCE INTEGRATORS AND STANDARDS ON VERTICAL AND HORIZONTAL INNOVATION IN THE DEFENCE INDUSTRY

This paper analyses the extent and character of product innovation in defence technologies where there are strong network effects, but where there is not a generally accepted system of open standards. Specifically, we examine the implications for innovation from the development of network-centric defence agencies accompanied by the creation of system integrators in the defence industry. The results show that although these developments are expected to have a number of positive impacts, such as enhanced security and gate-keeping of the relevant technologies, they are also likely to have an adverse effect on the available variety of new defence products.