In the previous publication ( https://ke.kz/ru/press-center/news/4954/ ) I tried to cover the topic of military and civilian production at machine-building plants. I came to the conclusion that the concept of “defense-industrial complex” is outdated, and at present any machine-building enterprise can produce products in demand in the army.

Continuing the topic, I would like to analyze who can be considered a “weapons baron” in the modern world.

The stereotype imposed by films and stories, of course, creates the opinion that gun barons are criminal characters in the style of Nicolas Cage in the film of the same name.

But economics tells a completely different story. "Lord of war" is no longer a bandit, a smuggler or an illegal immigrant. Now these are people who, in fact, did not hold weapons in their hands. These are research and production companies with huge legal capital. How do you like these “weapons barons”:

Honeywell is a world leader in many industries not directly related to military production.

Every day we come across the products of this company. For example, a “pick-up” (barcode scanner) in stores:

It is currently the largest defense contractor in the world. The company's share price is growing from year to year. Market capitalization over $130 billion. More than half of the equipment in American military aviation is made by Honeywell, from braking systems to avionics and engines.

War can have complex and far-reaching economic consequences, and while caution is needed when approaching the topic, it is important to recognize that certain industries may benefit from conflict. Some of the main beneficiaries of the war are engineering and manufacturing enterprises, including companies specializing in the production and supply of weapons, equipment and services for the military. Here are some reasons why military supply companies can succeed during military conflicts:

• Increased demand - during periods of hostilities, the demand for weapons, ammunition, vehicles and other military equipment increases sharply. Arms companies are experiencing a significant increase in orders and contracts. It is important to note related industries and raw material producers. For example, cellulose and nitrocellulose, from which gunpowder is made.
• Government Spending – In conflict situations, governments tend to allocate significant funds to defense needs. Increased government spending directly benefits military supply companies by increasing their revenues and profits.
• Research and Science - Conflicts often stimulate the development and implementation of new technologies in the field of defense systems. Companies engaged in research and development in this area can receive government contracts and funding, contributing to their success.
• Global Trade - International conflicts can lead to an increase in the global arms trade. Participating countries can purchase weapons and equipment from other countries or private defense contractors, contributing to the development of a global market for military supplies. Logistics companies earn a lot.
• Stock Market - Supplier stocks may perform well during the war as investors anticipate increased government spending in the defense sector.

It is important to emphasize that the benefits to military supply companies come with significant human costs, and the ethical implications of profiting from military activities are the subject of much debate.

Regarding the stock market and share prices:

I came across an interesting publication from 2018 in one of the Russian editions of a popular American magazine. The topic of making money from the arms race was discussed. The recommendation was – BUY! And, indeed, investors who invested money in the shares of the relevant enterprises made very serious money. However, there may be a misconception that earnings began only in 2022. In fact, the low efficiency of some developments in practice ultimately negatively affected the capitalization of a number of companies. Below in the first column is the market capitalization of companies in billions of dollars.

Let's look at a couple of examples:

Raytheon - makes everything from electronic systems to lasers. The company's shares have dropped by 2 times since 2019.

The manufacturer of the most expensive F-35 military aircraft, Lockheed Martin, is showing a slight, but still drop in stock value.

So who makes the money?

According to Crunchbase, investors are in no hurry to invest directly in such large suppliers, choosing more related tech startups.

An interesting company Anduril, www.anduril.com , shares are not publicly traded. The company produces drones and anti-drones, loitering munitions (kamikaze) - Altius.

Such companies are of interest to private investors. One of them, Andreessen Horowitz, is the largest venture fund. Or a private investment holding - Valor . The valuation rose sharply in April 2022.

So what are they investing in now?

In recent years, additive manufacturing (3D printing) has been used for military production. There has been, one might say, a revolution in materials science: in ceramics, composites, plastics, metals, recycled materials, construction and much more.

Drones, protective equipment, spare parts for equipment, some types of small arms and ammunition - additive manufacturing (AM) is already being used.

In practice, during combat operations, mobile 3D printers can be used for the rapid production of spare parts for equipment and aviation. For example, the Fortify company, with its, frankly speaking, space developments in AM, attracted interesting investors (RTX, Lockheed and others):

Such large giants with their huge R&D capabilities are not so easy to attract.

These guys are the “weapons barons” of the future.

In conclusion, I would like to set several goals for myself for the coming year - the development of the production of components and components, including through additive manufacturing.

In the next article I will try to cover the topic of raw materials (metals, chemistry, gunpowder, etc.).