In core OECD countries, the defense industry is a preferred sector for government-supported development of advanced R&D and engineering capabilities, which are then diffused to civilian applications, e.g. airplanes and power turbines. This profile of government involvement and high tech makes defense system development attractive also for emerging economies, where policy makers strive to upgrade independent R&D capabilities. Within the defense sector, fighter jets are a particular demanding area in terms of system complexity, long life-cycle and extreme operational conditions. Also, fighter programs require large investments for long period of time: typically 10-20 years. Products are tightly integrated with all subsystems developed for a particular use. In contrast to consumer durables such as white goods, new entrants cannot start with reverse engineering and assembly to gradually move up the technology frontier, but have to compete with world leaders directly. Moreover, the global aerospace industry is an oligopolistic sector with cut-throat competition and very high switching costs for customers.
This paper seeks the answers of the following questions: Which are the main factors leading up to the formation of new types of international partnerships in jet fighter development? A second question is: Which are the specific challenges related to such partnerships involving firms both from established and emerging economies? In order to answer these research questions Turkish jet fighter program is used as a case study.
The paper shows that the chances to succeed are highly uncertain in this sector dominated by USA. Although Turkey developed some level of R&D capability in previous defence R&D programs, the complexity of jet fighter development poses new challenges. Previous experiences indicate that technical capabilities are not sufficient, equally important is the formation of local management capabilities. During the pre-development (concept) phase, Turkey chose to collaborate with Swedish Saab. The paper discusses several challenges in this type of collaboration for the future program development, concerning intra- as well as inter-organizational management, i. e. both the organization of the technical development projects, and the design of appropriate industry governance structures.
2014. 100-101 p.