Cover: Going Global?

Going Global?

U.S. Government Policy and the Defense Aerospace Industry

Published 2002

by Mark A. Lorell, Julia F. Lowell, Richard M. Moore, Victoria A. Greenfield, Katia Vlachos-Dengler

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Since the end of the Cold War, a dramatic decline in overall defense authorizations has led both the U.S. aerospace industry and that of Europe to undergo extensive consolidation — a trend that has led in turn to a significant growth in cross-border business relationships. Yet while globalization has the potential to increase competition, foster innovation, encourage fair pricing, and promote interoperability among NATO allies, it also poses potential challenges, particularly with regard to the proliferation of advanced U.S.-developed military technologies. Accordingly, this report examines aerospace industry globalization trends with a view toward determining how and to what extent globalization can best be managed to further the U.S. Air Force's economic and political-military objectives while minimizing possible risks. The report confirms that the recent proliferation of cross-border business relationships has significant potential to promote allied standardization while simultaneously reducing costs. At the same time, however, enduring concerns over technology transfer issues, together with the increasing competitiveness of European and other multinational firms, may well undermine standardization efforts by encouraging the formulation of indigenous solutions. The authors conclude that further research is needed to fully clarify the manner in which the Air Force should respond to the continued consolidation and globalization of the aerospace industry.

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