Criteria for selecting the countries
Various criteria were used to select the countries included in the study. The list of companies in the SIPRI Top 100 arms firms in 2016 provided the starting point. All countries listed in the Top 100 were included. Some countries were obvious candidates, such as the USA, Russia, the UK, France, Germany and Italy. It was also necessary to identify authors for each country’s defence industry.
The editors selected authors on the basis of their knowledge, expertise, and availability. Some authors are leading defence economists; others are specialists from and for each nation. A further requirement was the publisher’s word limit on the book’s length which provided a constraint on the number of chapters and countries included in the book.
The SIPRI Top 100 arms producers is a comprehensive and publicly available database for arms producers and military service companies. It is published annually in the SIPRI Yearbook and is available in the SIPRI Database. It shows the names of each arms producer, its country of location, annual arms sales in current and constant prices, total sales, arms sales as a share of total sales, as well as total company profits and total employment. Subsidiaries are shown (SIPRI, 2018a).
The Top 100 includes private and public companies but not manufacturing or maintenance units of the armed forces. The Database contains financial and employment information on arms producing companies in Organisation for Economic Co-operation and Development (OECD) and developing nations (excluding China). The data are based on open sources and open information (e.g. company annual reports; articles in journals and newspapers). The Database was launched initially in 1989 and the current version contains data from 2002, including data for Russian arms companies. Collecting such data is a costly and time-consuming exercise for SIPRI but the result is a valuable and original contribution to knowledge. This book would not have been possible without the SIPRI Arms Industry Database. At the same time, this book’s country studies of each nation’s defence industry adds to the knowledge provided by the list of SIPRI Top 100 firms.
Table 1.1 shows the countries included in the book and the number of Top 100 arms companies by country in 2016. US arms companies dominated the number of Top 100 arms firms by country, accounting for almost 40% of the total. European countries accounted for a further 26% of the total numbers. Elsewhere, South Korea, Japan, India and Israel combined accounted for 20% of the total numbers in 2016.
Table 1.1 Top 100 arms companies by country, 2016
| Country | Number of Top 100 arms companies by country |
| USA | 38 |
| China | Not known: see Chapter 3 |
| Russia | 10 |
| UK | 8 |
| France | 6 |
| Trans-European | 2 |
| Italy | 2 |
| Germany | 3 |
| Spain | 1 |
| Greece | 0 |
| Poland | 1 |
| Ukraine | 1 |
| Switzerland | 1 |
| Sweden | 1 |
| Norway | 1 |
| Turkey | 2 |
| Israel | 3 |
| South Korea | 7 |
| Japan | 5 |
| Canada | 1 |
| Australia | 1 |
| Brazil | 1 |
| India | 4 |
| Singapore | 1 |
| South Africa | 0 |
| North Korea | Not known: see Chapter 27 |
Two countries, namely, China and North Korea, are included in the book, although neither are listed in the SIPRI Top 100. China is a major arms producer but little is known about its defence industrial base. Similarly, little is known about the arms industry of North Korea but its position in international relations made it a candidate for inclusion. The absence of published information on the defence industries of China and North Korea makes an original contribution to knowledge.
Two other countries were included even though they had no Top 100 companies, namely, Greece and South Africa. Greece is an example of a country whose defence industry is facing major financial and economic problems. South Africa is an example of a developing country and a country from the continent of Africa. Also, the South African company Denel was listed in the Top 100 arms companies until relatively recently.
It was not possible to include all countries. Notable exclusions comprised Belgium, the Czech Republic, Finland and the Netherlands. Nonetheless, these omissions are offset by the inclusion of the major European arms producers. Elsewhere, some South American and Asian nations are excluded (e.g. Argentina; Indonesia) but, again, these are balanced by the inclusion of other nations from these regions. Another notable omission is Iran where there is an absence of known specialists for that country. Overall, the key criterion in country selection was their representation in the SIPRI Top 100 arms producers. All countries with an arms producer in the SIPRI Top 100 in 2016 were included in the book.
The Top 100 list is not static and changes continuously. It is subject to new entry and exits reflecting increases and decreases in defence spending as well as new technology and industrial re-structuring. Firms merge to create new companies with new names and new business products (e.g. military outsourcing; emergence of drones and UAVs). Some large arms firms were only created relatively recently. For example, aircraft companies did not exist in 1900 and aerospace firms and missile companies only emerged after 1945. Similarly, there were changes between 2016 and 2017. In 2017, there were 42 US arms firms in the Top 100, followed by 10 Russian and seven from the UK. The sole Norwegian firm in 2016 was no longer in the Top 100 in 2017 and the seven South Korean arms firms of 2016 were reduced to four firms in 2017 (SIPRI, 2018b).
The Top 100 also excludes specialist small arms firms which manufacture ammunition, rifles and light weapons. Estimates suggest that the small arms sector comprises some 1,000 companies and about 100 countries. However, some small arms production takes place in countries such as Brazil, Canada, China, Germany, India, Italy, Russia, Switzerland, Turkey, the UK and USA: these countries are included in this book. Also, some small arms production occurs in the Top 100 arms firms.
