Why does the Ancient Technology Matter?

One company and its significance for the global artillery industry

Strategic thinking tends to focus on what is transparent to the administrative class. This is the major reason why strategy debates overwhelmingly concentrate on the military significance of modern technology. The cutting edge technology of today seems obviously relevant, and is therefore disproportionately focused on. The ancient technology, however, is almost completely overlooked. That is primarily because its significance is far less obvious.

Counterintuitive it may seem, it is the ancient technology that hides some of the major bottlenecks in the military production chains. There are three reasons for that:

1. Technological progress, e.g. the implementation of digital control did not affect all production processes equally. Some of them were completely revolutionised, others did not change that much. There has been less incentive to modernise the latter.

2. Some elements of the production chain may be hard to replace. Therefore, once you have equipped yourself with a cutting edge technology of today, that causes an immense path dependency. The cost of switching is too high, even if the more modern tech is available.

3. Weaponry markets are subject to the market fluctuations. Yet, fluctuations on the production equipment markets are stronger. A slight negative dynamics on a weaponry market results in a strong negative dynamics on the equipment market. With the market destroyed, there is little incentive for further improvements.

This is how major military industrial complexes end up having the entire links of their production chains reliant upon an ancient technology they never replaced. Strong path dependency implies they will not be able to replace it within a reasonable time frame (even if alternatives are available). As a result, they will be stuck with the same ancient suppliers.

Now the established military producers all over the globe will be often stuck with the same suppliers. Due to the small size and the highly distinctive nature of machinery markets, there is often not much choice in the first place. A market is small, yet surprisingly monopolistic. These monopolies have served everyone.

Now a counterintuitive thing about this monopolies that have served everyone, that the old military producers (US, Russia, China) are stuck with, and whom they cannot really replace is that these monopolies are often small. A very monopolistic but small market can support only small to medium size businesses. A very common situation.

This is how major military powers like the United States, China or Russia may end up stuck with the same suppliers (or even supplier), these suppliers not even being large businesses. Small, strategically important, invisible to the audience and to most analysts, these companies constitute some of the key bottlenecks of the military production chain for the countries that matter.

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