ABSTRACT
This chapter traces the emergence of a new breed of military-industrial enterprises, confined by and large to the advanced-industrial countries precisely because of its command of know-how in the field of electronics. It discusses the importance of the defence electronics firms. The indisputable tie between electronics production and defence demand is made manifest by a cursory appraisal of the effects of World War 2. Employment in the United States electronics industry increased by a factor of five during the course of the war and sales exploded virtually twentyfold. A few striking facts make no bones about the increasing importance of electronics in defence production. The need for interaction and collaboration between aerospace firms and their semiconductor producing subcontractors grew rapidly as the complexity of integrated circuits increasingly required custom-made designs. Spatial proximity between the components manufacturers and the subsystem producers economised on research and development personnel and time, and reduced communications costs.
