A Study of Project Financing on the Defense Industry in Systems Thinking Perspective

Abstract

Taiwan has long faced the threat of force from mainland China. Since Taiwan has limited defense industry autonomy, it has insufficient self-produced weapons and must rely on foreign weapon procurement for defense preparation. As a result, Taiwan ranks among the top 10 U.S. arms sales and exports destination due to the large quantity of armaments purchased. An autonomous defense industry capability covers three aspects: independent R&D, production, and formation of the weapon industry chain. Due to the high complexity, strong integration, large capital investment, high technology threshold, and long payback period characteristics of the defense industry; promoting exchanges between the defense industry and private enterprises can effectively bolster economic development and enhance the country’s industrial competitiveness in addition to upgrading its advanced technologies. In addition to the overall government planning and policy promotion, the defense industry also requires private sector participation. However, private manufacturers generally have insufficient financial resources and often need to obtain the necessary funds via project financing. So project financing plays a critical role to the defense industry development. There are numerous consideration factors for project financing and the defense industry. Such factors influence each other, and are correlated and interlinked. All aspects must be considered from a holistic and structural system perspective. But there is a dearth of literature focusing on the research of the defense industry and project financing from a systematic perspective. Therefore, the researcher of this study employed the system dynamics methodology and used system thinking to construct a qualitative system dynamic analysis model for Taiwan's defense industry and project financing system. The goal is to provide reference for countries that desire to develop their own national defense industry. Keywords: Defense industry, Project financing, System dynamics, System thinking.

An Interval-Valued Intuitionistic Fuzzy VIKOR Approach for R&D Project Selection in Defense Industry Investment Decisions

“…At this stage, all decision matrix values are collected and the collective range values are transformed into an intuitive Fuzzy decision matrix. In this study, the following transformation process is considered on the basis of decision makers: 𝑟ȋ 𝑗 = 𝐼𝑉𝐼𝐹 𝑎,𝑌 (𝑟̆𝑖 𝑗 (1) , ř 𝑖𝑗 (2) , … , ř 𝑖𝑗 𝑦(𝑙) ) = (𝑟̆𝑖 𝑗 (𝑦(1)) )…”

“…Technological developments in the defense industry and defense expenditures for investment projects carried out in this context are the factors that most affect the development of countries' military power in the field [2]. The budget allocated to defense industry projects has a significant share in the country's economy resources.…”

“…Although there are many different studies in the literature, major contributions of this study can be highlighted theoretically as follows: (1) The IVIF VIKOR Method was applied to the military decision-making problem for the first time. (2) The proposed FMCDM methodology allows for a more flexible decision-making process despite the uncertainties in the decision-making process. It also plays a strong role for any military project selection other than land, air, surface-to-air missile (SAM) and air-to-surface missile (ASM).…”

Study on Cash Flow of Volunteer Soldiers Retirement & Compensation Fund – From System Dynamics Perspective

“…System dynamics has been widely used in the field of public policy in the past, because system dynamics can make a systematic and overall consideration of public policy issues and can help in-depth thinking about the nature of complex issues. By studying the characteristics of information feedback within the system, it can improve organizational structure or organizational decision-making [13,16,17].…”