Innovation and Defence R&D: an Evolving Relationship by 9G9zUO


									    Innovation and Defence R&D:
      an Evolving Relationship

             Six Countries Programme
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/operations
Innovations in “military systems”
Innovations in military logistics and
Innovations in military acquisition and
 systems design

Importance of process and organisational

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
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

Defence research activities have tended to
 be carried out separated from other R&D
  Procurement Reform: Some Goals

Pursues cost savings (while increasing
  – …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
  – 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
Procurement Reform: the Building Blocks
            are Interrelated
                                         Use of
                                                             MILSPEC and
                                                             MILSTD reform
                                     and subsystems
           Cost control and           (COTS, NDI)
            technological                                 Flexible performance
              capability                                        definitions
            Modular design, open                                     acquisition”
             systems architecture,
                                                                  CALS, ILS
          obsolescence management                           (maintenance cost planning)

                                                          Integrated Project Teams
   Suppliers take on
   more design and
     maintenance                                            Closer
    responsibilities                                  customer/supplier

 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
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
 The Reform of Defence GREs: Some
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
  – How will the relationship with private firms
  – 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
  – 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
       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)
    Diversity of policy contexts and decision levels

Policy initiatives at different levels may pull in different

      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?

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