Industrial effects of direct military offset in defence materiel export

The report presents a study with the purpose of identifying industrial effects of cooperation that is directly related to defence export. Four large export orders of defence from Sweden have been studied. The cases are Saab´s export of Gripen to South Africa, Kockum´s export of submarines to Singapore and Hägglund´s export of CV90 to the Netherlands. The study shows that: each buying country creates unique demands and set-ups for the implementation of military offset; the buying countries want to use offset in order to create employment and to strengthen the domestic defence industry´s competitiveness: the major part of the product development takes place within the selling company; a large part of the production takes place in Sweden. The conclusion for companies is primarily that long-term industrial commitments are created since the business relation typically lasts for more than ten years. After final delivery, there is no apparent pattern regarding follow-on orders. Conclusions for policymakers: defence materiel export (and import) of complex systems leads to profound development of competence in defence companies in Sweden; export cooperation do not lead to competence loss from defence companies in Sweden; the buying country will expect that the company´s development capacity is withheld in the long run.