Defense Industry participation in economic growth

Abstract

ABSTRACT: Upon conducting a macroeconomic analysis of the impacts; both positive and negative, that the Defense-related industries have on national, regional and even local economic growth one will find that indeed there are not only direct but indirect relations throughout recent history as well as contemporary times. In 21st century nation states defense industry relationships with national governmental administrations varies upon not only the type of government but also with their historical relationships. Some defense industries may be completely privatized industries while others are completely nationalized. A third condition may be a combination of the above. Regardless of the conditions one cannot doubt the direct and indirect impacts to the economy. In the case of the United States deep in the great depression economic prosperity was only possible after United States industry mobilized for the Second World War. During the 1980s President Reagan initiated economic recovery measures coupled with a Defense Industry buildup that along with economy prosperity forged a 21st century modern armed force. Military installations have both positive and negative economic impacts based upon the level of community economic diversification to withstand periodic military downsizing. In the case of Turkey after a period of defense material procurement through foreign military sales the government established in the mid-1970s the Defense Industry Foundation succeeded by the Undersecretary of Defense Industry in the 1980s as a means to develop a national-based defense industry. Although there has been positive economic indicators of employment and technological research and development the market has been limited to truly affect at a macro level. In Argentina, which has been a industrial nation since the early 20th century has undergone challenges with a lack of consistent, clear strategic policy that is synchronized to nationalized defense industries. This synchronization shortfall has disrupted efforts at the national level and has stymied strong economic growth through employment, technological research and development brought about by national demands on the Argentine-based defense industry. The purpose of the research project is to investigate the problem proposed of economic impacts via defense industry and through a series of specific case studies an- alyze patterns of impacts as they apply to the United States, Turkey and Argentina. Historical as well as contemporary data has been researched utilized in the course of this investigation.