In a volatile world, governments are striving to reduce defense reliance on imports while boosting high-value exports. Although resources, time, and technological development levels remain indispensable foundations, success ultimately goes beyond investment and licensed assembly programs. By analyzing the experience of emerging players, this Viewpoint identifies two enabling pillars: sophisticated program management and collaborative ecosystems. These help developing nations achieve sustainable defense autonomy and global competitiveness.
The global defense industry is undergoing rapid transformation. Governments face mounting pressure to reduce import dependencies, expand high-value exports, and retain domestic manufacturing autonomy. This pressure is amplified by geopolitical restrictions, such as reliance on foreign-controlled technologies and export limitations like ITAR (International Traffic in Arms Regulations). Examples include Türkiye’s expulsion from the F-35 program after purchasing the Russian S-400 system and South Korea operating under US-imposed missile-range limits until 2021.
Furthermore, military technologies, from unmanned aerial vehicles (UAVs) to next-generation artillery, are advancing at an unprecedented speed, creating fierce competition. Traditional players such as the US, European nations, Russia, and fast-rising China dominate the market. Others, including Türkiye and South Korea, are striving to develop critical capabilities and achieve sovereignty in strategically targeted equipment classes.
Success rates in developing sovereign defense industries vary considerably. Some countries remain licensed assemblers of equipment with minimal local intellectual property (IP) ownership; others achieve global export footprints and design autonomy within decades. South Korea and Türkiye are examples of the latter, becoming top 20 global defense exporters in a relatively short period (see Figure 1).
This Viewpoint provides a strategic lens for:
In the late 1990s, the South Korean Air Force reliedon older training jets that did not adequately prepare pilots for fourth-generation fighters. The government and Korea Aerospace Industries (KAI) looked to develop a native supersonic trainer to reduce reliance on imports and grow local research, development, and innovation (RDI). KAI partnered with Lockheed Martin, leveraging its expertise in flight controls and avionics to develop the T-50 jet, which incorporated advanced avionics, a US-made General Electric F404 engine, and Korean design. By positioning the T-50 as a hero platform, KAI catalyzed local advancements in composites, avionics, and flight control systems and created a family of aircraft based on it. A multiyear commitment from the Air Force encouraged supply chain investments in advanced systems like radars and mission computers, helping grow the industry and transition KAI from an assembler of components to a global trainer/light-fighter manufacturer.
In the 1990s, the Turkish Navy relied heavily on foreign-built frigates and corvettes, causing maintenance and upgrade issues. This led to the launch of the MILGEM ship program in 2000 by the Turkish Naval Forces and defense authorities. The program aimed to reduce import reliance and develop a domestic naval industry. The Istanbul Naval Shipyard led the design, but the project mandated a broad local supplier network for sensors, combat systems, steel materials, and more. Electronics SMEs (small and medium-sized enterprises) delivered subassemblies for the corvette’s command-and-control system, and private shipyards assisted in modular sections of hull construction. Altogether, more than 50 local SMEs contributed to the program, building a network of Tier 2 and 3 domestic suppliers. The first MILGEM corvette was built with more than 50% local content. As the second and third ships entered production, new suppliers for advanced materials, propulsion modules, and stealth features joined the chain. Today, multiple SMEs produce critical corvette subsystems rather than the navy relying on a single OEM. Demonstrating the export impact, Pakistan’s navy ordered four MILGEM-based corvettes from Türkiye in 2018.
The success achieved by Türkiye and South Korea offers lessons for developing nations. Although adequate defense budget spending and technological maturity are essential, they do not automatically guarantee deep localization or export competitiveness. Arthur D. Little (ADL) analysis found that success revolves around investing in (1) well-structured program management systems spanning public and private domains and (2) supportive, collaborative industrial ecosystems.
Successful defense industry program management involves holistic, systematic planning and execution of complex technological, industrial, and managerial efforts. This includes setting capability goals, aligning with market realities, and coordinating with diverse stakeholders (e.g., government bodies, military end users, prime contractors, and SMEs). Success requires a program approach:
Effective program management turns a nation’s strategic defense aspirations into reliable, export‐ready solutions produced and prepared for operations by its industrial sector, then integrated into broader defense ecosystems. Rather than treating defense sector investment as a collection of products or individual opportunities; this approach concentrates on the continuous, coordinated development of multifaceted aspects of defense solutions and their lifecycle. Program management methodologies and practices include institutional culture, political continuity, human capital, and many others. For the purpose of this Viewpoint, we concentrate on how successful countries approached the following:
An effective defense ecosystem is more than a collection of suppliers or government entities. It is a collaborative network of large prime contractors, dual-use businesses, specialized SMEs, research institutes, governments and policymakers, and strategic foreign partners — all working in sync to enable sustainable defense production and innovation.
Coordination and focus are key to achieving maturity and must be strategically steered by the governments through setting directions; securing long-term orders and providing clear market signals; enabling and providing infrastructure support; creating collaboration platforms; and maintaining competition, diversity, and strong private sector participation.
Such a critical national sector, especially during formative stages, can’t be left purely to free market forces — but it should effectively leverage them. Success increasingly relies on dual‐use manufacturing, in which civilian industries and off‐the‐shelf solutions are adapted for defense needs. When nurtured effectively, a robust defense industrial ecosystem provides:
In essence, defense industrial ecosystem development transforms raw investment into tangible, sustainable capabilities, based on:
ADL analysis revealed nine best practices for countries looking to develop their defense industry and move beyond basic assembly. Five support sophisticated program management; four support industry ecosystem development (see Figure 2).
Launching a flagship platform boosts national pride and ambition and creates a focal point for defense efforts. Any system that catalyzes a country’s defense ecosystem and builds a foundation for building export credibility can be a flagship program, including an aircraft, ship, combat vehicle, or drone system. A focused effort around a signature system consolidates fragmented resources, unifies suppliers, and demonstrates local engineering capability to international partners.
Unfortunately, many nations struggle to select the right platform and sustain long-term commitment. Complex ambitions, shifting political priorities, and fragmented supply chains stall progress and weaken impact. To succeed with flagship programs, countries should:
Emerging defense players can gain global traction by focusing on underserved market segments. Instead of replicating high-end Western systems, targeting a specific niche lets nations create tailored, affordable solutions that meet both local and select export needs. Crucially, niche selection should reflect a country’s geopolitical posture and alliances, as these shape both domestic requirements and potential export destinations. This approach accelerates capability development, fosters specialized design expertise, and improves platform relevance.
Many manufacturers struggle to define a clear niche. Programs are too broad or lack the market insights and end-user feedback needed to identify operational gaps, limiting potential. To avoid this, countries can:
Early and continuous collaboration with defense ministries and end users ensures that platforms meet operational needs. Treating the ministry-industry relationship as a structured, client-contractor dynamic creates productive tension. The armed forces push for mission effectiveness at best cost, while developers aim for feasibility and viability. When correctly implemented, this approach reduces costly redesign and increases export relevance, as seen in South Korea, where agencies like Defense Acquisition Program Administration (DAPA) help align all stakeholders from the outset.
Unfortunately, collaboration tends to be inconsistent. Armed forces are brought in after major design decisions are locked in. Institutional silos, risk aversion toward unproven local players, and legacy procurement frameworks further widen the gap between developers and users. To close this gap, targeted actions are required:
Trying to develop all defense technologies in-house is unrealistic. Instead, countries should prioritize strategic areas where local control is feasible within a certain timeframe to reduce long-term risk and strengthen export competitiveness of prioritized products. The key is not to localize everything at once; instead, build capabilities gradually through focused investment and carefully managed international partnerships. A phased approach works best:
Defense platforms should not be seen as one-time sales. Long-term value lies in 20- to 30-year lifecycle management, including maintenance, upgrades, modernization, and training. Many programs overlook this potential. Platforms are often delivered without structured upgrade paths or long-term support models. As a result, local firms miss opportunities for recurring business, and armed forces are left with outdated systems or reliance on foreign maintenance, repair, and operations (MRO) providers. A well-executed lifecycle strategy creates lasting national value:
Prime contractors are the main driving force of the industry, but achieving defense autonomy requires a deep, certified, collaborative network of Tier 1, 2, and 3 suppliers, significant involvement of private capital and initiative, and government support of infrastructure investments. To strengthen their supplier base, countries should:
A sovereign defense industry requires a locally rooted RDI ecosystem. By connecting national labs, universities, and foreign OEMs, countries can increase local know-how, leading to the development of proprietary technologies in areas like avionics, propulsion, and software. This shift strengthens autonomy, supports export competitiveness, and builds national talent pipelines. However, many nations underinvest in defense RDI or fail to align academia, industry, and government to monetize IP. To accelerate the realization of a local RDI ecosystem, countries should:
International partnerships such as offset programs, government-to-government agreements, technology transfers, and licensed coproduction offer strategic shortcuts for acquiring critical know-how. When carefully managed, they help countries access restricted technologies, accelerate capability development, and open export routes by blending local cost or regional access advantages with global brand credibility.
Partnerships alone don’t guarantee autonomy, however. Many nations enter deals without clear learning goals, remaining perpetual licensees. Overreliance on a single partner can also limit bargaining power and/or stall progress when political conditions shift. To build lasting value, international partnerships should be guided by:
Investing in dual-use technologies lets governments stretch RDI budgets, accelerate innovation, and achieve production scale. Technologies like AI, robotics, and advanced composites can serve both defense and commercial markets, creating faster development cycles and more flexible supply chains.
However, dual-use integration remains limited. Commercial firms often face bureaucratic barriers entering the defense space, with unfamiliar procurement rules and long sales cycles. Cultural gaps also persist: the defense sector operates on cost-plus contracts and monopolistic clients, while commercial firms thrive on competition and market volume. Practical levers can help overcome this limitation:
The most successful countries synchronize the program and ecosystem pillars, each reinforcing the other. Well‐structured programs create demand signals and a “pull” for local industry; a thriving ecosystem supplies the components, technologies, and talent needed (a “push”) to keep defense projects on track. Visualized in a two-dimensional matrix, the most balanced, effective approach emerges when these dimensions are developed and funded in tandem (see Figure 3).
Countries positioned above the optimal vector line demonstrate a predominantly “pull” approach, in which a robust, demanding program structure mobilizes the ecosystem and demands innovation and outcomes — which the industry fails to deliver. This typically results in budget overruns, high technical risks, and suboptimal innovation. India learned this lesson the hard way. Before adopting a more balanced approach, many of its programs suffered from significant time and budget overruns due to misalignment with industry readiness.
Countries that take a “push” approach focus too much on capacity and capability development. By failing to integrate into a coherent program strategy, they risk deploying substantial resources ineffectively. Many industrially developed countries have experienced this, particularly during the 1990s and 2000s. For example, Japan, despite its sophisticated industrial ecosystem, encountered limited success with its F-2 fighter, and Russia faced significant challenges in aligning its industrial ecosystem with well-structured defense programs.
Striking a balance is not straightforward. The best practices listed above are not one‐size‐fits‐all: local governance structures, industrial legacies, and geopolitical alliances all shape the specifics. Some countries rely on strong state‐driven models with consolidated defense enterprises; others leverage a more vibrant private sector in partnership with government agencies. However, the above recommendations provide practical guidance to create robust program management alongside a high‐functioning industrial ecosystem.
Governments, particularly in developing countries, recognize the need to create sovereign defense industries that safeguard their interests and help them build export capabilities. Achieving this goes beyond adequate defense spending and technological maturity. It requires:
Combining these twin pillars ensures that countries can cultivate defense autonomy, resilient supply chains, and global competitiveness while supporting wider national and economic goals.
By Alexey Pankov, Arnaud Bodji, Tobias Aebi, Artem Malkov, Umesh Prajapat
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