The challenges in buyer-supplier relationship for technological absorption capability in international defence acquisition: the case of Southeast Asia

Transfer of technology (TOT) is a contentious issue in the international defence trade. In 2019 it was estimated to form at least 40%, or $123 billion USD, of total international defence trade. Whilst purchasing nations set requirements for TOT within their industrial participation (IP) policies, there is often a mismatch between the scale and type of technology suppliers can offer and the buyer's technological absorption capability (TAC). This persistent tension between ambition and reality frequently strains the buyer-supplier relationship. Thus, understanding how TAC can be enhanced is of vital importance. This paper defines TAC in the international defence acquisition and offsets context and determines the factors for successful TAC. The paper focusses on the potential challenges for successful TAC and offers recommendations on how to enhance TAC. This research is limited to the context of Southeast Asia. The respondents consist of industry, government and academics who operate in the Southeast Asian defence and security sector.