National Interests: Priorities and Security
 

Improving performance indicators of the military-industrial complex by expanding the civil production

Vol. 14, Iss. 7, JULY 2018

Received: 3 April 2018

Received in revised form: 26 April 2018

Accepted: 19 May 2018

Available online: 16 July 2018

Subject Heading: NATIONAL INTERESTS

JEL Classification: C22, L64, O25, O49

Pages: 1199–1219

https://doi.org/10.24891/ni.14.7.1199

Varshavskii A.E. Central Economics and Mathematics Institute, Russian Academy of Sciences, Moscow, Russian Federation
varshav@cemi.rssi.ru

https://orcid.org/0000-0001-8229-3692

Makarova Yu.A. Central Economics and Mathematics Institute, Russian Academy of Sciences, Moscow, Russian Federation
mak-yuliya@mail.ru

https://orcid.org/0000-0003-2695-717X

Importance This study analyzes changes in performance indicators of the military-industrial complex through the expansion of civil high-tech production. The reasonable combination of military and civil production will enable defense enterprises and entire sector to increase their effectiveness.
Objectives We examine practices of the countries which attained the best results in diversifying the military-industrial production. We also evaluate how the civil production and respective output influence performance indicators of the military-industrial complex.
Methods Analyzing the most advanced countries’ expertise (USA among them), we study how the expansion of civil production influences performance indicators of the military-industrial complex.
Results Increased output in civil production is showed to influence and improve performance indicators of the military-industrial complex.
Conclusions and Relevance We prove that both expertise of the most advanced countries and Russian distinctions should be taken into account in order to successfully implement the production diversification program. As the analysis of the U.S. aerospace industry shows, an increase in civil production output contributes to performance indicators, thus providing the rationale for diversification of the Russian military-industrial complex. The military and industrial enterprises shall set up market-oriented manufacturing of civil products, majoring in high-tech lines. The civil production output will not increase without an appropriate industrial and protectionist policy focused on the priority development of domestic mechanical engineering.

Keywords: reform, military industrial complex, national security, civil production, performance indicators

References:

  1. Varshavskii A.E. [Issues arising from the use of achievements in military technology and civil sector]. Ekonomika i matematicheskie metody = Economics and Mathematical Methods, 1990, vol. 26, no. 4. (In Russ.)
  2. Achasov O.B., Babkin G.V., Kosenko A.A. [Diversification as a factor of better performance of the military-industrial complex]. Vooruzhenie i ekonomika, 2016, no 4, pp. 19–29. URL: Link (In Russ.)
  3. Varshavskii A.E. [Determining the level of military spending in Russia in line with the stability factors: Macroeconomic assessment]. Voprosy Ekonomiki, 1996, no. 11. (In Russ.)
  4. Vikulov S.F. Konversiya voennogo proizvodstva [Conversion of military production]. Moscow, State Financial Academy Publ., 1991, 25 p.
  5. Fal'tsman V.K. [Dependence of the Russian defense industry on oil prices: Conversion]. Problemy prognozirovaniya = Problems of Forecasting, 2017, no. 5, pp. 31–38. (In Russ.)
  6. Bagrinovskii K.A., Bendikov M.A., Khrustalev E.Yu. [On methods for improving the efficiency of science-intensive machine building conversion programs]. Ekonomika i matematicheskie metody = Economics and Mathematical Methods, 1998, vol. 34, iss. 1, pp. 57–67. (In Russ.)
  7. Vikulov S.F., Rassadin V.N., Khrustalev E.Yu. Kontseptsiya razvitiya sotsial'no-ekonomicheskogo i oboronno-promyshlennogo komponentov natsional'noi bezopasnosti Rossii [Concept of development of socio-economic and military-industrial component of Russian national security. Work Paper #WP/2011/02]. Moscow, Moscow Academy of Social Sciences Publ., 2011, 57 p.
  8. Khrustalev E.Yu., Tsymbal V.I. Ekonomicheskie problemy obespecheniya voennoi bezopasnosti Rossii [Economic problems of ensuring military security in Russia]. Moscow, CEMI RAS Publ., 2000.
  9. Varshavskii A.E., Makarova Yu.A. [The need to consider contemporary trends in the development of the military-industrial complex]. Natsional'nye interesy: prioritety i bezopasnost' = National Interests: Priorities and Security, 2016, no. 12, pp. 4–18. URL: Link (In Russ.)
  10. Giroux H. University in Chains: Confronting the Military Industrial Academic Complex. Boulder, CO, Paradigm Publishers, 2007.
  11. Smurov A.N. [Problematical issues of the State defense order implementation and possible methods of their solution]. Izvestiya Sankt-Peterburgskogo gosudarstvennogo ekonomicheskogo universiteta = News of St. Petersburg State University of Economics, 2017, pp. 27–35. URL: Link (In Russ.)
  12. Varshavskii A.E., Dubinina M.G. [Synergy of the military and civilian production: A case study of the aircraft industries]. Natsional'nye interesy: prioritety i bezopasnost' = National Interests: Priorities and Security, 2017, vol. 13, iss. 1, pp. 20–33. URL: Link (In Russ.)
  13. Hartley K., Sandler T. Economics of Alliances: The Lessons for Collective Action. Journal of Economic Literature, 2001, vol. 39, iss. 3, pp. 869–896. URL: Link
  14. Kleiner M.M., Leonard J.S., Pilarski A.M. How Industrial Relations Affect Plant Performance: The Case of Commercial Aircraft Manufacturing. Industrial and Labor Relations Review, 2002, vol. 55, no. 2, pp. 195–218. URL: Link
  15. Esaulov V.N. [20 years of defense industry enterprises in the market economy]. Vestnik Tomskogo gosudarstvennogo universiteta. Ekonomika = Tomsk State University Journal of Economics, 2012, no. 3, pp. 11–18. URL: Link (In Russ.)
  16. Zakharov A. [Integration of military and civil production in the market-driven environment]. Voprosy Ekonomiki, 1996, no. 11, pp. 97–104. (In Russ.)

View all articles of issue

 

ISSN 2311-875X (Online)
ISSN 2073-2872 (Print)

Journal current issue

Vol. 14, Iss. 10
October 2018

Archive