1. CDIB and Competitiveness Binyam Solomon Centre for Operational Research and Analysis (CORA)-DRDC February 27, 2012 NEW PARADIGMS FOR DEFENCE PROCUREMENT AND INDUSTRIAL POLICY? Queens University The views expressed in this presentation /paper are the views of the speaker and do not necessarily reflect the views or policies of the Canadian Forces or the Department of National Defence.

2. 1 Background Background – Past Literature – Recent Developments CDIB (The Scope and definition) CDIB (The Scope and definition) – Scope in the study – Rationale and Discussing Differences Selected Characteristics Selected Characteristics – General Profile – International Comparison – Research and Development – Economic Significance OUTLINE

3. 2 Rosenbluth, G. (1967) The CSDRM/RMC work –Treddenick (1982) until Caron (1994) and Deschênes (1998) Grover (1997) Solomon (2000) Stone and Solomon (2005) and Solomon (2009) CDIB Studies in the Past  Tzeferakos (2010)  Industry Census conducted using 2007 data  Defence Economics in Canada  Macro-economy on defence  Defence on macro economy  Industrial Preparedness Current Situation

4. 3 Scope- Quadrant Defence/To tal Revenue % Military Use High Low Why these quadrants are important

5. 4 Statistics Canada Census of CDIB Note that the remaining are not necessarily foreign

6. 5 CDIB NAICS 2007 Based Foreign portion actually lost $ in 2009

7. 6 CDIB NAICS 2007 and Census 2006

8. 7 Census 2006 Continued, Government Sector

9. 8 Herfindahl-Hirschman Index (HHI) Index (Revenue Based)

10. 9 International Comparisons Niche Players –Remote Sensing, Simulators –Space Application SIPRI Top 100 –Only Three Firms over the last 15 years –Bombardier, CAE, GM Disel (GD Land Systems)

11. 10 R&D Highlights $1.5T

12. 11 Input-Output Simulations #1 Defence Spending in FY 2008-09 Jobs Note also induced impacts due to consumption is estimated to generate 326 jobs

13. 12 Input-Output Simulations #2 Revenue and GDP Multiplier

14. 13 Informed Discussions on Policy Informed Discussions on Policy – Requires reliable data – Industry Census is a huge step – Scoping the sector equally important CDIB Characteristics CDIB Characteristics – Niche Player – No primes or large system integrators – Export Oriented (Competitive?) Economic Significance Economic Significance – I-O Simulations and Limitations – Fiscal Implications – Premium Implications

15. 14 Questions

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