IN FROM THE COLD - PROSPECTS FOR CONVERSION OF THE DEFENSE INDUSTRIAL BASE

At the end of the Cold War, the manufacturing operations involved in making military equipment and commercial goods are commonly believed to intersect hardly at all. Our analyses of 1998 survey data from a large sample of establishments in the machining-intensive durable goods sector show that there are few technical and competitive conditions separating the defense and commercial industrial spheres. Commercial-military integration of production is now the normal practice among the majority of defense contractors in this sector. Moreover, we find little difference between defense and commercial producers in the competitive conditions they face or in the diversity of their customers. However, defense contractors have an advantage over their strictly commercial counterparts because of their greater use of productivity-enhancing technologies.