REGIONAL SUB-CONTRACT SUPPLIERS TO PRIME DEFENSE CONTRACTORS - EVIDENCE OF THEIR PERFORMANCE IN RESPONSE TO RECENT CHANGES IN DEMAND

There is considerable evidence that technological change occurs uneven ly over geographical space, and that change is faster in core areas of national economies than at their peripheries. The principal result of this paper is a confirmation that South East firms similarly initiate diversification technology strategies more readily than their regiona l counterparts. It is noted that defence spending is a disguised form of regional aid when contracts are awarded in peripheral parts of the United Kingdom. Thus, it is concluded that, given the laggard behaviou r of peripheral firms regarding diversification, recent defence spendi ng cut backs in these areas are likely to have a strong negative impac t on industrial activity.