Arms and Innovation: Entrepreneurship and Alliances in the Twenty-First Century Defense Industry (review)

Small business firms have played an important role in the development of contemporary weapons systems and technologies. This is particularly true of sectors where there has been rapid technological change, such as the aircraft industry in the first part of the last century and more recently in defense information technologies. But even in seemingly mature markets, small firms can play critical roles engendering major military innovation. For example, Higgins Industries of New Orleans developed the Eureka workboat in the late 1920s and early 1930s. The Eureka was ideally suited for the bayous and swamps of Louisiana where it was initially used in logging operations. In 1939, Higgins received a contract from the Navy for an experimental landing craft based on the Eureka and subsequent designs were critical to the conduct and execution of U.S amphibious operations in the Second World War.

James Hasik's Arms and Innovationhas a contemporary focus, but provides a useful framework for historians to consider the structure and evolution of defense industries, and the role of small enterprises in developing weapons and supporting products. Hasik uses six case studies of current or recent U.S. defense procurements to discuss the role of small firms in the arms industry. These vignettes on weapons such as the Predator unmanned air vehicle, the Joint Direct Attack Munition, and the Space-Based Infrared Sensor are used to illustrate why small firms succeeded, or were unsuccessful, in developing and producing defense products. The case studies are well chosen as they include commercial products adopted for military use, and purpose-built weapons and software products

Hasik identifies three circumstances where small firms could be "relatively advantaged" over larger enterprises. The first is "innovative" markets that don't require capital-intensive research and development and for which the vector of technological change is uncertain. Another is in circumstances where a high degree of skill is needed but where ensuing production runs could be low. The third is where there are already large players but where there is room for smaller firms to prosper. He also discusses circumstances where small companies should consider an alliance with larger enterprises.

The audiences Hasik directs his recommendations to are aspiring and current defense contractors both large and small and government procurement and policy personnel. Hasik does not believe that small firms hold all the keys to weapons innovation and indeed the purpose of his study of the Joint Direct Attack Munition is to highlight instances where a small firm was not as well equipped as a large one (in this case Boeing) to undertake high level serial production of a weapon. However, he believes "small firms have an important role to play in the cycles of military-industrial development…"

There were some areas that Hasik could have been explored in greater detail. Little was said about how small firms were able to make their skills and products initially known to potential military customers. In some instances, the U.S. Congress has played a critical role in shepherding and protecting smaller firms and this could have been discussed, particularly in the instance of the Predator program. And inter-service rivalries can also help a smaller firm find willing new customers. Little was said about the funding and policy initiatives that could provide entrance points for smaller innovative firms in defense markets.

However, Arms and Innovationdeserves a place in the library of anyone interested in military procurement and weapons development. For the historian, the framework Hasik used may be helpful in identifying the circumstances in earlier time periods that allowed smaller firms and enterprises to bring forth new military tools.