Innovation and Defence R&D:an Evolving Relationship
Six Countries Programme
Workshop
Linking Defence and Security R&D to Innovation: the challenge ahead
Brussels, 19 November 2004
Jordi Molas-Gallart
Senior Fellow
SPRU, University of Sussex
Foreword: Defence Innovation Goes Beyond Changes in Arms Systems
Innovations in military doctrine/operationsInnovations in “military systems”Innovations in military logistics and
supportInnovations in military acquisition and
systems design
Importance of process and organisational change
Issues
The effects of defence R&D investment – the relationship between defence and civilian innovation
Policy challenges– Procurement reform and defence R&D– The role and reform of Defence Government
Research Establishments
The Effect of Defence R&D Investment
An optimistic view of the impact of defence R&D (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.”
Yet the Effect of Defence R&D 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 R&D is mainly D (development)Effects of defence R&D depends on conditions
(institutional structure, R&D management, type of R&D ...)
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 R&D activities
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
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
– ...
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)
Procurement Reform: the Building Blocks are Interrelated
Cost control and improvement technological
capability
Cost control and improvement technological
capabilityLife-cycle approachLife-cycle approach
CALS, ILS(maintenance cost planning)
CALS, ILS(maintenance cost planning)
Integrated Project TeamsIntegrated Project Teams
“Incremental
acquisition”
“Incremental
acquisition”
Use of commercial components
and subsystems (COTS, NDI)
Use of commercial components
and subsystems (COTS, NDI)
MILSPEC and MILSTD reformMILSPEC and
MILSTD reform
Suppliers take on more design and
maintenance responsibilities
Suppliers take on more design and
maintenance responsibilities
Flexible performance definitions
Flexible performance definitions
Closer customer/supplie
r relationship
Closer customer/supplie
r relationship
Modular design, open systems architecture,
obsolescence management
Modular design, open systems architecture,
obsolescence management
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
– R&D activities are also affected
The generation and exploitation of defence-related technological capabilities goes beyond the funding of research activities
The Case of Defence R&D
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?
The Example of Defence Government Research Establishments
R&D 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
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?
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
Collaboration in European Defence R&D
Only about 2% of European defence R&D 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
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”
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)
A Long-Term Objective
European Commission "Action Plan" (1997!):
"An integrated European market for defence products must be set up using a combination of all the instruments at the Union's disposal: Community and Common Foreign and Security Policy
legislative and non-legislative instruments"
Yet Very Slow Progress
European countries maintain diverse procurement policies and organisational procedures
Market fragmentation along national lines continues
Summary: The Challenges (1)
Technology transfer across military-civilian applications requires the adaptation of skills and
cultural adjustment . . .
. . . likely to require organisational change
The Challenges (2)
Policy initiatives at different levels may pull in different directions
Diversity of policy contexts and decision levels
Possibility of inconsistent policy outcomes
European integration is a fragile process
The Challenges (3)
Defence research establishments are engaging in civilian work
What priority should be given to commercial work against established defence tasks?
How does one deal with conflicts of interests?
YET