ABSTRACT
This chapter explores the implications of the 'new mercantilist' strategy in terms of the growing political significance of the aerospace industry. It discusses the civil/defence linkages that lie at the heart of the strategy and the kinds of response required of the European aerospace industry. Historically it can be argued that the US has gained enhanced global competitive advantage in aerospace from a stated commitment to a free trade/free market philosophy which has masked a covert strategy of government-financed indirect industrial support. The symbiosis between military and civil aircraft development in the US has been crucial in both fuelling and sustaining its leading edge in technology development. Since the 1960s, Europe has had experience of a number of transnational collaborative ventures in the defence/aerospace sector, including 22 in aircraft production, seven in aero-engines and 12 in missiles. Only 15% of procurement expenditure in France and the UK has been deployed on collaborative ventures and 25% in Germany.
