Dmitry Medvedev calls consolidation of defence industry for economic development of Russia 2103134.

“You can’t build a modern army and navy just like that, in a backyard shed,” he said.

As of today there are 61 integrated structures in the defense industry, comprising 771 large enterprises, which account for over 74 percent of defense industry output.

By 2020, a new-look defense industry is to be formed with about 40 large science and production associations.

The defense industry is expected to grow at a rate of 10 percent in 2013-15, Medvedev said, stressing that its development is crucial for national economic development as a whole.

He underscored the importance of state support for innovative projects at all stages.

“We hold serious positions on the world arms market, being the world’s second largest seller by volume, but it is not easy to keep that place: We need to move forward all the time," Medvedev said.

Russia's ambitious 2011-2020 arms procurement program stipulates the upgrade of up to 11 percent of military equipment annually and will allow the country to increase the share of modern weaponry in the Armed Forces to 70 percent by 2020. Russia allocated about 908 billion rubles (about $30 bln) on state defense order spending in 2012.