[data_acquired]

Is it the case that the nature of projects in the defence industry is such that companies are prone to consolidation into a few large contractors? In the case of pharma, given the length of time and billions needed to go from drug discovery to market means that only large companies can effectively do R&D. Is it similar for defence i.e., long development times mean only a few large companies can effectively compete? Or is the creation of oligopolies that don't allow for competition a very conscious aspect of government defence policy?

[michaelt]

It's extremely easy for the government to accidentally create monopoly suppliers.

If Amazon signs a 5 year contract to get all their delivery trucks from Ford, GM isn't going to go out of business; and when they're re-negotiating the contract in 5 years time there'll still be a vibrant competitive market.

But if you make tanks or jet fighters or railroad rails, you might only have one customer. And if your only customer signs a 5 year deal with someone else, you're out of business.

[bobthepanda]

Most of the consolidation has happened though because of ever more expensive weapons programs. A B52 is a lot dumber than an F35 and costs way less.

Similar trends took place in commercial aviation. There aren’t successful entrants into this market despite a lot of state backing, because it is now very hard and expensive to create an aircraft that matches the performance and efficiency of the latest models of Boeing and Airbus.