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Arms industry

Workers assemble Browning-Inglis Hi-Power pistols at the John Inglis munitions plant, Canada, April 1944

The arms industry is a global business that manufactures weapons and military technology and equipment. It consists of commercial industry involved in research, development, production, and the service of military material, equipment, and facilities. Arms producing companies, also referred to as defense contractors or military industry, produce arms mainly for the armed forces of states. Departments of government also operate in the arms industry, buying and selling weapons, munitions and other military items. Products include guns, ammunition, missiles, military aircraft, military vehicles, ships, electronic systems, and more. The arms industry also conducts significant research and development and provides other logistics and operations support.

It is estimated that yearly, over 1.5 trillion United States dollars are spent on military expenditures worldwide (2.7% of World GDP).[1] This represents a decline from 1990 when military expenditures made up 4% of world GDP. Part of this goes to the procurement of military hardware and services from the military industry. The combined arms sales of the top 100 largest arms producing companies amounted to an estimated $395 billion in 2012 according to Stockholm International Peace Research Institute (SIPRI).[2] In 2004 over $30 billion were spent in the international arms trade (a figure that excludes domestic sales of arms).[3] According to SIPRI, the volume of international transfers of major weapons in 2010–14 was 16 per cent higher than in 2005–2009. The five biggest exporters in 2010–14 were the United States, Russia, China, Germany and France, and the five biggest importers were India, Saudi Arabia, China, the United Arab Emirates (UAE) and Pakistan.[4] The arms trade has also been one of the sectors impacted by the credit crunch, with total deal value in the market halving from US$32.9 billion to US$14.3 billion in 2008.[5] Many industrialized countries have a domestic arms industry to supply their own military forces. Some countries also have a substantial legal or illegal domestic trade in weapons for use by its citizens. An illegal trade in small arms is prevalent in many countries and regions affected by political instability. The Small Arms Survey estimates 875 million small arms in circulation worldwide, produced by more than 1,000 companies from nearly 100 countries.[6]

Contracts to supply a given country's military are awarded by the government, making arms contracts of substantial political importance. The link between politics and the arms trade can result in the development of what U.S. President Dwight D. Eisenhower described as a military-industrial complex, where the armed forces, commerce, and politics become closely linked, similarly to the European defence procurement. Various corporations, some publicly held, others private, bid for these contracts, which are often worth many billions of dollars. Sometimes, such as the contract for the new Joint Strike Fighter, a competitive tendering process takes place, where the decision is made on the merits of the design submitted by the companies involved. Other times, no bidding or competition takes place.


Trade in arms and technological diffusion is as old as the history of war itself. During the early modern period, France, England, Netherlands and some states in Germany became self-sufficient in arms production, with diffusion and migration of skilled workers to more peripheral countries such as Portugal and Russia.

The modern arms industry emerged in the second half of the nineteenth century as a product of the creation and expansion of the first large military-industrial companies. As smaller countries (and even newly industrializing countries like Russia and Japan) could no longer produce cutting-edge military equipment with their indigenous resources and capacity, they increasingly began to contract the manufacture of military equipment, such as battleships, artillery pieces and rifles to foreign firms.

In 1854, the British government awarded a contract to the Elswick Ordnance Company of industrialist William Armstrong for the supply of his latest breech loading rifled artillery pieces. This galvanised the private sector into weapons production, with the surplus being increasingly exported to foreign countries. Armstrong became one of the first international arms dealers, selling his weapon systems to governments across the world from Brazil to Japan.[7] In 1884 he opened a shipyard at Elswick to specialise in warship production—at the time, it was the only factory in the world that could build a battleship and arm it completely.[8] The factory produced warships for many navies, including the Imperial Japanese Navy. Several Armstrong cruisers played an important role in defeating the Russian fleet at the Battle of Tsushima in 1905.

In 1885, France decided to capitalize on this increasingly lucrative form of trade and repealed its ban on weapon exports. The regulatory framework for the period up to the First World War was characterized by a laissez-faire policy that placed little obstruction in the way of weapons exports. Due to the carnage of World War I, arms traders began to be regarded with odium as "merchants of death" and were accused of having instigated and perpetuated the war in order to maximise their profits from arms sales. An inquiry into these allegations in Britain failed to find evidence to support them. However, the sea change in attitude about war more generally meant that governments began to control and regulate the trade themselves.

File:Ministry of Information First World War Official Collection Q30049.jpg
Stacks of shells in the shell filling factory at Chilwell during World War I.

The volume of the arms trade greatly increased during the 20th century, and it began to be used as a political tool, especially during the Cold War where the United States and the USSR supplied weapons to their proxies across the world, particularly third world countries (see Nixon Doctrine).[9]


The AK series of weapons have been produced in greater numbers than any other firearm and have been used in conflicts all over the world.

Land-based weapons

This category includes everything from light arms and landmines to heavy artillery, and the majority of producers are small. Many are located in third world countries. International trade in handguns, machine guns, tanks, armored personnel carriers, and other relatively inexpensive weapons is substantial. There is relatively little regulation at the international level, and as a result, many weapons fall into the hands of organised crime, rebel forces, terrorists, or regimes under sanctions.[10]

Small arms

Main article: Small arms trade

The Control Arms Campaign, founded by Amnesty International, Oxfam, and the International Action Network on Small Arms, estimated in 2003 that there are over 639 million small arms in circulation, and that over 1,135 companies based in more than 98 different countries manufacture small arms as well as their various components and ammunition.[11]

Aerospace systems

Encompassing military aircraft (both land-based and naval aviation), conventional missiles, and military satellites, this is the most technologically advanced sector of the market. It is also the least competitive from an economic standpoint, with a handful of companies dominating the entire market. The top clients and major producers are virtually all located in the western world and Russia, with the United States easily in first place. Prominent aerospace firms include Dassault Aviation, Sukhoi, Mikoyan, EADS, Finmeccanica, Thales Group, Lockheed Martin, Northrop Grumman, Boeing, and BAE Systems. There are also several multinational consortia mostly involved in the manufacturing of fighter jets, such as the Eurofighter. The largest military contract in history, signed in October 2001, involved the development of the Joint Strike Fighter.[10]

Naval systems

Some of the world's great powers maintain substantial naval forces to provide a global presence, with the largest nations possessing aircraft carriers, nuclear submarines and advanced anti-air defense systems. The vast majority of military ships are conventionally powered, but some are nuclear-powered. There is also a large global market in second-hand naval vessels, generally purchased by developing countries from Western governments.[10]

World's largest defense budgets

International arms transfers

According to research institute, SIPRI, the volume of international transfers of major weapons in 2010–14 was 16 per cent higher than in 2005–2009. The five biggest exporters in 2010–14 were the United States, Russia, China, Germany and France, and the five biggest importers were India, Saudi Arabia, China, the United Arab Emirates (UAE) and Pakistan. The flow of arms to Africa, the Americas, Asia and Oceania, and the Middle East increased significantly between 2005–2009 and 2010–14, while there was a notable decrease in the flow to Europe.[4]

SIPRI has identified 60 countries as exporters of major weapons in 2010–14. The top 5 exporters during the period—the USA, Russia, China, Germany and France—were responsible for almost 74 per cent of all arms exports. The composition of the five largest exporters of arms changed between 2005–2009 and 2010–14: while the USA and Russia remained by far the largest exporters, China narrowly, but notably, replaced Germany as the third largest exporter, and the United Kingdom dropped outside the top 5. The top 5 exported 14 per cent more arms in 2010–14 than the top 5 in 2005–2009.[4]

In 2010–14, 153 countries (about three-quarters of all countries) imported major weapons. The top 5 recipients—India, Saudi Arabia, China, the UAE and Pakistan—accounted for 33 per cent of the total arms imports during the period (see table 2). India, China and the UAE were among the top 5 importers in both 2005–2009 and 2010–14. Asia and Oceania accounted for nearly half of imports in 2010–14, followed by the Middle East, Europe, the Americas and Africa (see figure 3). SIPRI also identified seven groups of rebel forces as importers of major weapons in 2010–14, but none of them accounted for more than 0.02 per cent of total deliveries.[4]

World's largest arms exporters

The units in this table are so-called trend indicator values expressed in millions of U.S. dollars at 1990s prices. These values do not represent real financial flows but are a crude instrument to estimate volumes of arms transfers, regardless of the contracted prices, which can be as low as zero in the case of military aid. Ordered by descending 2014 values. The information is from the Stockholm International Peace Research Institute.[12]

2013 rank Supplier Arms exports
1 23x15px United States 10194
2 23x15px Russia 5971
3 23x15px France 1978
4 23x15px Germany 1200
5 23x15px Spain 1110
6 23x15px China 1083
7 23x15px United Kingdom 1074
8 Template:Country data Israel 824
9 23x15px Italy 786
10 23x15px Ukraine 664
11 23x15px Netherlands 561
12 23x15px Sweden 394
13 23x16px  Switzerland 350
14 23x15px Turkey 274
15 23x15px Canada 234

2001–12 Rank Supplier 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1 23x15px United States 5908 522911px 569811px 686611px 670011px 745311px 800311px 628811px 665811px 864111px 998411px 876011px
2 23x15px Russia 5896 570511px 523611px 617811px 513411px 509511px 542611px 595311px 557511px 603911px 787411px 800311px
3 23x15px Germany 850 91611px 171311px 110511px 208011px 256711px 319411px 250011px 243211px 234011px 120611px 119311px
4 23x15px France 1297 136811px 134511px 221911px 172411px 164311px 243211px 199411px 186511px 183411px 243711px 113911px
5 23x15px China 499 50911px 66511px 29211px 30311px 59711px 43011px 58611px 100011px 142311px 135411px 178311px
6 23x15px Ukraine 700 31111px 44211px 20011px 29011px 55311px 72811px 33011px 32011px 20111px 48411px 134411px
7 23x15px United Kingdom 1368 106811px 74111px 131611px 103911px 85511px 101811px 98211px 102211px 105411px 107011px 86311px
8 23x15px Italy 880 19111px 52611px 31411px 53811px 43211px 36611px 45411px 38311px 806 104611px 84711px
9 23x15px Spain 7 12011px 15011px 5611px 10811px 84311px 59011px 61011px 99811px 51311px 92711px 72011px
10 Template:Country data Israel 203 23911px 34211px 20911px 58311px 118711px 132611px 53011px 54511px 50311px 53111px 53311px
11 23x15px Sweden 216 42611px 34111px 21211px 77411px 50211px 68411px 41711px 51411px 80611px 68611px 49611px
12 23x15px Canada 129 17011px 26311px 26511px 22611px 22611px 33411px 22711px 16911px 25811px 29211px 27611px
13 23x16px  Switzerland 19311px 15711px 18111px 24311px 24611px 28511px 30111px 48211px 25511px 13711px 29711px 21011px
14 Template:Country data South Korea 165 N/A 100 2911px 4811px 9411px 22011px 8011px 16311px 9511px 22511px 18311px
File:Sgraffite marchand d' Armes.jpg
Sgraffito at the Lambert Sevart weapons factory, in Liege (Belgium) (early 20th Century).

Next to SIPRI there are several other sources that provide data on international transfers of arms. These include national reports by national governments about arms exports, the UN register on conventional arms and an annual publication by the U.S. Congressional Research Service that includes data on arms exports to developing countries as compiled by U.S. intelligence agencies. A list of such sources can be found at the SIPRI website.[13] Due to the different methodologies and definitions used different sources often provide significantly different data. For example, according to Statistisk sentralbyrå (Norway state statistics), Norway exports a greater value (in USD) of arms than many of the nations listed above.

Some of the differences are possibly due to deliberate over- or under-reporting by some of the sources. Governments may claim high arms exports as part of their role in marketing efforts of their national arms industry or they may claim low arms exports in order to be perceived as a responsible international actor.

As of 2008, Britain has become the world's leading developer of arms with British company BAE Systems.[14] Defence group BAE Systems is the first company outside the United States to reach the top position, thanks to a deal with the Pentagon for mine-resistant vehicles to be used in Iraq and Afghanistan. According to the Stockholm International Peace Research Institute, a defence think tank, the former British Aerospace group's arms sales are ahead of American market leaders Lockheed Martin and Boeing. The report reveals BAE's U.S. subsidiary was alone responsible for 61.5% of the group's arms sales and around 58.5% of total group sales. This demonstrates BAE's increasing reliance on orders for conventional weapons as the United States cuts back on its nuclear arsenal. The British figures were also boosted by orders for Eurofighter Typhoon jets from Saudi Arabia.

World's largest arms importers

The units in this table are so-called trend indicator values expressed in millions of U.S. dollars. These values do not represent real financial flows but are a crude instrument to estimate volumes of arms transfers, regardless of the contracted prices, which can be as low as zero in the case of military aid.[12]

2013 rank Recipient Arms imports
1 Template:Country data India 4243[15]
2 23x15px Saudi Arabia 2629[15][16]
3 23x15px Turkey 1550
4 23x15px China 1357[17]
5 Template:Country data Indonesia 1200
6 23x15px Vietnam 1058
7 23x15px Taiwan 1039
8 23x15px United Arab Emirates 1031
9 23x15px Australia 842
10 23x15px Oman 738
11 23x15px Singapore 717
12 23x15px Pakistan 659
13 23x15px Azerbaijan 640
14 Template:Country data Iraq 627
15 23x15px Morocco 594

List of major weapon manufacturers

For a complete list, see List of modern armament manufacturers.
For a Top-Ten list, see List of defense contractors.

Private military contractors are private companies that provide logistics, manpower, and other expenditures for a military force.

Major arms industry corporations by nation

Largest arms industry companies

File:Biggest arms sales 2013.png
Share of arms sales by country. Source is provided by SIPRI.[18]
Further information: Companies by arms sales

This is a list of the world's largest arms manufacturers and other military service companies who profit the most from the War economy, their origin is shown as well. The information is based on a list published by the Stockholm International Peace Research Institute for 2013.[18][19][20][21] The list provided by the SIPRI excludes companies based in China.

Rank Company Country Arms sales (US$ m.) Total sales (US$ m.) Arms sales as a % of total sales Total profit Total employment
1 Lockheed Martin 23x15px United States 35 490 45 500 78 2 981 115 000
2 Boeing 23x15px United States 30 700 86 623 35 4 585 168 400
3 BAE Systems 23x15px United Kingdom 26 820 28 406 94 275 84 600
4 Raytheon 23x15px United States 21 950 23 706 93 2 013 63 000
5 Northrop Grumman 23x15px United States 20 200 24 661 82 1 952 65 300
6 General Dynamics 23x15px United States 18 660 31 218 60 2 357 96 000
7 EADS 23x15px European Union 15 740 78 693 20 1 959 144 060
8 United Technologies Corporation 23x15px United States 11 900 62 626 19 5 721 212 000
9 Finmeccanica 23x15px Italy 10 560 21 292 50 98 63 840
10 Thales Group 23x15px France 10 370 18 850 55 761 65 190
11 RAI 23x15px United States 01 050 01 125 15 0 085 40

Institutes participating in weapon research and warfare simulation

Arms control

Main article: Arms control

Arms control refers to international restrictions upon the development, production, stockpiling, proliferation and usage of small arms, conventional weapons, and weapons of mass destruction.[23] It is typically exercised through the use of diplomacy, which seeks to persuade governments to accept such limitations through agreements and treaties, although it may also be forced upon non-consenting governments.

Oscar Arias Sanchez President of Costa Rica (awarded the Nobel Peace Prize in 1987 for his efforts to end civil wars across Central America through the Esquipulas II Accords) has stated:

Notable international arms control treaties

File:Global weapons sales 1950-2006.jpg
Global weapons sales from 1950-2006

The European Council stated to the United Nations General Assembly:

See also


  1. ^ World Military Spending. Retrieved on 2012-05-09.
  2. ^ Stockholm International Peace Research Institute. Retrieved on 2012-05-09.
  3. ^ Arms trade key statistics. BBC News (2005-09-15). Retrieved on 2012-05-09.
  4. ^ a b c d "Trends in International Arms Transfer, 2014". Stockholm International Peace Research Institute. Retrieved 18 March 2015. 
  5. ^ Defence sector deal-making is finding itself in a war zone, warns report. 12 March 2009. BriskFox. Retrieved on 2012-05-09.
  6. ^ "Small Arms Survey - Weapons and Markets- 875m small arms worldwide, value of authorized trade is more than $8.5b". 8 December 2014. Retrieved 26 March 2015. 
  7. ^ "William George Armstrong (1810–1900)". 
  8. ^ Dougan, David (1970). The Great Gun-Maker: The Story of Lord Armstrong. Sandhill Press Ltd. ISBN 0-946098-23-9. 
  9. ^ Stohl, Rachel; Grillot, Suzette (2013). The International Arms Trade. Wiley Press. Retrieved 2013-02-07. 
  10. ^ a b c International Defense Industry at the Wayback Machine (archived July 26, 2011).
  11. ^ Debbie Hillier, Brian Wood (2003). "Shattered Lives – the case for tough international arms control" (PDF). Control Arms Campaign. p. 19. Retrieved 2009-03-28. 
  12. ^ a b Top List TIV Tables-SIPRI. Retrieved on 2012-05-09.
  13. ^ armstrad — Retrieved on 2012-05-09.
  14. ^ The SIPRI Top 100 arms-producing companies, 2008 — Retrieved on 2012-05-09.
  15. ^ a b "Saudi Arabia outpaces India to become top defence importer: IHS". The Times of India. Retrieved 26 March 2015. 
  16. ^ "Saudi Arabia outpaces India to become top defence importer - IHS". Retrieved 26 March 2015. 
  17. ^ "Saudi Arabia becomes world's biggest arms importer". the Guardian. Retrieved 26 March 2015. 
  18. ^ a b
  19. ^
  20. ^
  21. ^ "SIPRI Releases Top 100 Defense Company Data". Defense News. Retrieved 26 March 2015. 
  22. ^ TNO Defence, Security and Safety at the Wayback Machine (archived September 23, 2006).
  23. ^ Barry Kolodkin. "What Is Arms Control?" (ARTICLE)., US Foreign Policy. The New York Times Company. Retrieved 13 May 2012. 
  24. ^ Anonymous. The Global Arms Trade: Strengthening International Regulations. Interview with Oscar Arias Sanchez. Harvard International Review Date: Tuesday, July 1, 2008 accessed 10 Feb 2010
  25. ^ Delgado,Andrea. Explainer: What is the Arms Trade Treaty, 23, Feb, 2015,
  26. ^ EU@UN – EU Presidency Statement – United Nations 62nd General Assembly: General Debate. Retrieved on 2012-05-09.

External links

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