Arranged Marriages : A study on knowledge transfer through offsets in the defense industry

Sammanfattning: In order to sell products in the defense industry it is often demanded of the seller to reinvest capital and collaborate with companies in the buying country, with the buyer hoping to establish a defense industry of their own. These so called offset demands are seen as an industry standard and forces the sellers to open up their supply chain and educate and develop the industry in the buying country. This “forced” knowledge transfer is an interesting topic and have been the focus point of this thesis. How can firms conduct successful knowledge transfer and develop the foreign industry and at the same time protects its own products and competitive advantage? This qualitative study has been done through interviews with four people having senior positions and a vast knowledge and background in working with offsets, combined with secondary data from previous studies and articles. The study showed that the most important factor for a successful knowledge transfer is the absorptive capacity of the partner and buying country. Furthermore, the success also lies in the offset regulations of the buyer, if you ask for the wrong things or in the wrong way, the industrial effects will be very limited. The Swedish firms were not afraid of sharing their knowledge since they had the confidence that they would keep to stay ahead of any new upcoming competitor, therefore a minor factor to consider. Lastly offsets have often been portrayed negatively. However, if successfully conducted, several positive effects of offsets have been identified by the authors. Showing that even though partnerships may an “arranged marriage” it can still become successful.