Differences Between Military and Commercial Shipbuilding: Applications for the United Kingdom's Ministry of Defence
Jan 2005 · Rand Corporation
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In the United Kingdom, the shipbuilding industry is sustained largely by the government's purchases of naval and naval auxiliary vessels. The desire for a continuing efficient and robust shipbuilding industry has prompted the UK Ministry of Defence to ask: Can the United Kingdom's shipbuilding industry compete more broadly in commercial or foreign military markets? The prospects for broadening UK shipyards' customer base appear to be poor. The United Kingdom would face strong competitors in attempting to re-enter the commercial shipbuilding market. Japan and South Korea dominate the market for ships of low and moderate complexity, mostly cargo ships and tankers of varying types. EU shipyards dominate the market for more-complex ships such as passenger vessels, although that market segment is also under pressure from Asian shipbuilders. The United Kingdom certainly has a stronger industrial base to support military sales than it does in the commercial arena, but the match between most current UK military ship products and global demand is not a close one. The military export market is largely a market for modestly priced frigates and small conventionally powered attack submarines. It is not clear that a UK shipyard could build a conventional submarine at a competitive price; UK warships are, in general, too sophisticated and expensive to make them interesting to potential importers. Furthermore, export contracts often require that most ships in an order be built in the importing country, thus limiting the benefit such sales may have for the exporter's construction workforce.
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