adaptability of the French armaments industry in an era of globalization, The

Industry and Innovation, Aug 2001 by Serfati, Claude

THE FRENCH ARMAMENTS INDUSTRY: AN OVERVIEW

Arms production has a long record that can be traced back to the 17th century, with the creation of arsenals by Colbert, Louis XIV's Prime Minister. From the second half of the 19th century on, the growth of metallurgy and chemicals industries were buttressed by arms procurements (for a historical overview of the French arms industry, see Chesnais and Serfati 1992). The return of General de Gaulle to power in 1958 and the setting up of the Fifth Republic was a landmark. In contrast with the postwar period when France was strongly dependent on foreign military equipment, even during the war in Indochina in the early 1950s (as high as 50 percent of equipment of the French military involved in Indochina came from the USA) (Kolodziej 1987), a major objective of the Gaullist policy was that France develop weapon systems in its own right. This policy resulted in huge increase in military budget, stimulus given to technological capabilities, active export policy with the quest of countries keen to be independent from the two superpowers, and so to become buyers of French arms.

In a context of lack of entrepreneurship and given the fragmented character of most sectors of French industry, military technological programs launched in the early 1960s were given a pivotal role in the consolidation of key manufacturing sectors, with the creation of "national champions" able to compete successfully in international markets. At that time, this meant for France's trade to reorient from former colonial countries' markets to the European Community (which had been created in 1958). Military technological programs were also conceived of as providing the military establishment with a way out of the colonial wars (Indochina and Algeria) by offering them, through the nuclear ` force de frappe" and large-scale weapon programs the opportunity to contribute to the restoration of the "rank of France" in the world. After two decades (the 1960s and 1970s) of steady growth in the arms industry, a further stimulus was given by the Socialist and Communist Party governments, after the election of Mitterand in 1981. The Left-wing government proceeded the nationalization of major defense privately owned companies, including Alcatel, Dassault, Matra-Lagardere and Thomson-CSE Meanwhile, a remodeling of the French industry, leading to a new round of consolidation of "national champions" after that undertaken by Gaullist governments was carried out by the first Mitterand government. The 1980s were marked by strong consensus between Right- and Left-wing parties both on the defense and security agendas, as well as on defense-related industrial policy issues. The consensus was based on maintaining the "rank" of France, and the utilization of the "defense technological program as an engine for industrial development", as once claimed by Minister of Defense Giraud (Chesnais and Serfati 1990).

Given this consensus and the ensuing large flows of resources devoted to arms R&D and procurement, it is not surprising that the French industry is among the top world arms industries. Although accurate comparative data are difficult to establish, the authoritative research institute Swedish International Peace Research Institute (SIPRI) found that France accounted for 9-10 percent of the world arms production in 1996, ranking second with the UK (10 percent), but far behind the USA (46-49 percent of the world arms production). According to SIPRI data, between 1994 and 1998, France ranked third as a supplier of conventional weapons (SIPRI 1999).