Transformation and Economic Effects of the Turkish Aerospace and Defense Industry

Abstract

The aerospace and defense industry are an industry with significant economic, technological, and political impacts. The defense industry is one of the most critical sectors that increase the global competitive power a country. A technological innovation developed by the aerospace and defense industry spreads to other sectors over time and contributes to overall development. Ensuring national security is one of the most essential tasks of the states. In today’s world, overcrowded armies have been replaced by high-tech defense vehicles. Therefore, it is a matter of national security for countries to have high-tech defense systems today. Spending on the defense industry for countries that cannot produce these systems takes place an important amount in both their imports and national expenditure Defense industry, not only constitute of the economic burden because of imported defense vehicles but also create a dependency problem on other countries. The arms embargoes imposed on countries throughout history have shown that foreign dependence causes a severe security problem. For this reason, almost every country wants to invest as much in the defense industry as its resources would allow. In countries where high-tech defense systems are produced, share of the defense expenditure in import decreases and share of income from defense systems in export increases that is a contribution to the national income. A strong defense industry does not only affect foreign trade positively but also helps in building economic and political confidence by giving the country a strong image. Trust and stability are fundamental requirements of economic development. In economies where trust and stability do not exist, domestic and foreign investors avoid investing, negatively affecting economic growth. The development of the aerospace and defense industry in a country contributes to the national security, provides employment in the value-added sector and accelerates innovation and technological development not only in defense sector but also in other sectors. The acceleration seen in the Turkish aerospace and defense industry in recent years provides important opportunities for developing the country’s economy and expanding its geopolitical influence. This section aims to evaluate the developments in the aerospace and defense sector, which is a success story within the framework of the National Technology Initiative in terms of economy.