ABSTRACT
Inefficiency in North Atlantic Treaty Organization weapons markets is reflected in ‘excessive’ product differentiation resulting in ‘wasteful duplication’ of research and development and relatively short production runs, so that economies of scale remain ‘unexploited’. European defence industries are particularly criticised for being ‘too small and too fragmented’ to be able to compete with the United States of America. European producers believe that joint projects are the appropriate solution. They are preferred since they enable the major European aerospace industries to retain and develop their technology. This chapter presents an economic evaluation of joint aerospace projects based on European experience. The central hypothesis concerns the magnitude of any cost savings from collaboration and this provides a basis for a general assessment of the efficiency of joint ventures. The chapter presents some examples of joint projects and outlines the case of a European aerospace industry.
