ABSTRACT
This chapter examines why the defence market became so highly concentrated and why the Ministry of Defence competition policy proved unable to stop the emergence of further monopolies within this environment. Industrial concentration in the defence market can be attributed to a number of causes. The existence of the government research establishments dedicated to pure as well as applied military research was testimony to the importance attributed to innovation in defence. It is clear that the organisational and financial demands imposed on the defence contractor, as a result of the need to conduct both ambitious and costly innovation, in turn affected market structure. The emergence of the weapons system an early example of this technical heterogeneity. An explicit aspect of defence procurement policy in this period was that industry assumed the role of the prime contractor with all of its attendant risks.
