A resource-based model using system dynamics to investigate how to improve the performance of a value chain that produces advanced weapons

This document describes a System Dynamics model of a value chain that produces advanced weapons. The model merges two distinct traditions of strategic analysis; System Dynamics and the Resource Based View. A simulation model is developed and used to exemplify the approach. In the model, four resource aging chains interact; military men, industrial workers, R&D professionals and defence equipment. The model is initialised to portray both the US and European defence technology status in 2003. 25 year simulation runs are provided for US and EU base cases, as well as to investigate four European policy options: Budget policy, Industrial policy, Conscription policy and a Combined policy. It is found that