The trend towards increased outsourcing of military
activities has led to a rapid expansion of the military
services segment of the arms industry in recent decades.
Military services as defined here include technical services
such as information technology and equipment maintenance,
operational support such as facilities management and
logistics, and actual armed ‘security’ in conflict zones. Some of the demand for the
latter comes not from ‘outsourcing’ as such, but from internal conflict situations where state capacity is weak or
absent. This paper discusses the background to the growth of
the military services industry and presents an overview of the
different types of military service, the size of the market
and the companies involved.
The continuing expansion of the private military services
industry raises many issues. The view that outsourcing is
economically efficient can be challenged on a number of
grounds, not least when these services are provided in
operationally deployed contexts. The involvement of
private companies in assisting military operations in armed
conflict situations such as Iraq also raises serious concerns
about the democratic accountability of armed forces,
the status of civilian contractors in military roles,
and the political influence of companies that have a vested
interest in the continuation of the conflict.
II. The development of the military services industry
III. Types of military service
IV. The size of the market for outsourced military services
V. The ramifications of the private military services industry
About the authors
Dr Sam Perlo-Freeman (United Kingdom) is a Researcher with the SIPRI Arms Production Project, responsible for monitoring data on the major arms producing
companies worldwide. He is the author of a number of publications, including ‘The
demand for military expenditure in developing countries’, International Review of
Applied Economics (January 2003, co-author), and ‘Offsets and development of the
Brazilian armaments industry’ in Arms Trade and Economic Development: Theory and
Policy in Offsets (Routledge, 2004).
Elisabeth Sköns (Sweden) is Leader of the SIPRI Military Expenditure and Arms
Production projects. Her recent publications include articles or chapters
restructuring of the West European defence industry in Mot et avnasjonalisert forsvar?
[Towards a denationalized defence?] (Abstrakt, 2005), on the costs of armed conflict in
Peace and Security, Expert Papers Series no. 5 (Secretariat of the International Task
Force on Global Public Goods, 2006), on financing security in The Statesman’s Yearbook
2007 (Palgrave Macmillan, 2006), on the challenges of globalization for the military
industry in Annuario Armi–Disarmo Giorgio La Pira [Giorgio La Pira arms–
disarmament yearbook] (Jaca Book, 2008), and on the economics of arms production in
Encyclopedia of Violence, Peace and Conflict, 2nd edn (Academic Press, 2008, co-author).