Innovation and Defence R

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Innovation and Defence RDan Evolving
Relationship

• Six Countries Programme
• Workshop
• Linking Defence and Security RD to Innovation
  the challenge ahead
• Brussels, 19 November 2004
• Jordi Molas-Gallart
• Senior Fellow
• SPRU, University of Sussex

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Foreword Defence Innovation Goes Beyond Changes
in Arms Systems

• Innovations in military doctrine/operations
• Innovations in military systems
• Innovations in military logistics and support
• Innovations in military acquisition and systems
  design
• Importance of process and organisational change

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Issues

• The effects of defence RD investment the
  relationship between defence and civilian
  innovation
• Policy challenges
• Procurement reform and defence RD
• The role and reform of Defence Government
  Research Establishments

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The Effect of Defence RD Investment

• An optimistic view of the impact of defence RD
  (EC communication towards an EU defence equipment
  policy, march 2003)
• Defence related research plays a major role in
  innovation in the US It benefits the whole of
  industry, including the civilian sector. This
  interpenetration of defence and civilian research
  has benefited both the American arms industry and
  civilian users in terms of market access and
  costs.

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Yet the Effect of Defence RD is Controversial

• Recall 70s and 80s literature on the detrimental
  effects of defence research and production
• In key technological fields defence follows
  civilian innovation
• Defence RD is mainly D (development)
• Effects of defence RD depends on conditions
  (institutional structure, RD management, type of
  RD ...)

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Main Challenge Need for Procurement
Reform/Institutional Change

• Traditional defence procurement established a
  complex set of regulatory and managerial
  practices and organisational structures
• Defence research activities have tended to be
  carried out separated from other RD activities

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Procurement Reform Some Goals

• Pursues cost savings (while increasing
  performance)...
• by using capabilities available elsewhere
• by exploiting elsewhere capabilities developed
  in defence research and production
• by improving managerial practices
• Attempts to change the way complex military
  systems are defined, developed, produced and
  maintained

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Procurement Reform the Policies

• Seeks to open military markets through
• The application of commercial best practice in
  project management and contractual procedures
• The development of integrated project teams and
  partnering agreements
• The substitution of defence standards and
  military specifications for civilian standards
• ...

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Procurement Reform the Practice

• Many reform tools appear as technical (ILS, CALS,
  continuous acquisition, MILSPEC reform, IPTs..)
• These building blocks are tackled (mainly) at
  national level, and
• in isolation from each other (functional silos)

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Procurement Reform the Building Blocks are
Interrelated
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Therefore...

• Procurement reform is not only about new tools,
  but about systemic change
• Changes across all procurement processes and
  stages must be implemented in a coordinated
  manner
• Priorities must change
• RD activities are also affected
• The generation and exploitation of
  defence-related technological capabilities goes
  beyond the funding of research activities

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The Case of Defence RD

• Specialised defence research facilities have a
  history of isolation
• Security considerations
• Special relationship with defence ministries and
  the military
• Technology transfer across military-civilian
  contexts is likely to require
• Organisational change
• Change in regulatory and contractual practices
• Cultural adjustment
• How will this management of dual-use work in
  practice?

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The Example of Defence Government Research
Establishments
RD strategies among many defence-related
research organisations are dual-track, seeking

• The application of commercial technologies to
  gain savings in military production

• The application of military technologies to
  commercial ventures

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The Reform of Defence GREs Some Challenges

• Defence research establishments are engaging in
  civilian work, but.
• What priority should be given to commercial work
  against established defence tasks?
• What will the implications of commercialisation
  be in a defence environment?
• How will the relationship with private firms
  develop?
• Is there scope for European collaboration?

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GDREs A Summary of Problems

• Conflict of interest
• Commercial use of data acquired when discharging
  functions on behalf of defence ministries)
• Support of private sector partners when providing
  advice to defence ministries
• New tasks (technology transfer,) require new
  priorities and organisational culture
• How to introduce international collaboration in
  highly sensitive areas

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Collaboration in European Defence RD

• Only about 2 of European defence RD has been
  carried out through joint research programmes
  (WEAO,) (not counting joint arms development
  programmes)
• A long history of plans, initiatives, frameworks
• To establish joint research programmes
• To co-ordinate research priorities and
  requirements
• but defence research keeps being regarded as a
  matter of national strategic importance

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The EU and Defence

• Article 223 Treaty of Rome (293 Treaty of
  Amsterdam, III-342 Constitution Treaty) allows
  any member state to take
• Such measures as it considers necessary for the
  protection of the essential interests of its
  security which are connected with the production
  of or trade in arms, munitions and war material

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EU is Trying to Develop Defence Industrial
Policies

• Communication on the challenges facing the
  European defence industries (1996)
• Communication on implementing a EU strategy on
  defence-related industries (1997), including
• Draft common position on framing a European
  armaments policy
• Action plan for the defence-related industry
• Communication towards and EU defence equipment
  policy (2003)
• Establishment of European defence agency (2004)
• Communication on security research - the next
  steps (2004)
• Communication towards a programme to advance
  European security through research and technology
  (2004)
• Green paper on defence procurement (2004)

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Yet Very Slow Progress

• European countries maintain diverse procurement
  policies and organisational procedures
• Market fragmentation along national lines
  continues

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Summary The Challenges (1)
Technology transfer across military-civilian
applications requires the adaptation of skills
and cultural adjustment . . .
. . . likely to require organisational change
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The Challenges (2)
Diversity of policy contexts and decision levels
Policy initiatives at different levels may pull
in different directions
Possibility of inconsistent policy outcomes
European integration is a fragile process
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The Challenges (3)
Defence research establishments are engaging in
civilian work
YET
What priority should be given to commercial work
against established defence tasks? How does one
deal with conflicts of interests?