The risks which apply to all industries, applies also to military industries, naturally. “Creating the need” is a common commercial policy for large firms, when addressing their clients. The sales tactic involves convincing the customer that it needs something, which it had no knowledge of, or didn’t need beforehand. The end game, naturally, is to sell the product. The risk is that industrial firms would virtually impose products to clients, which fit little or not their actual needs
The fine balance of military acquisition
Developing new ways to defend territories is no easy task and has even gotten harder in recent times. At the heart of the capacity for self-defense, lies innovation, and the constant and rapid adaptation of the military apparatus to the ongoing and actual threat. But, in order to innovate, one needs a precise idea of the conditions which soldiers and equipment will be facing. Europe has set up entire ecosystems for data to flow freely between those who use, and those who invent. The risk is multiplied if the client State does not have a department in charge of serving as interface between experts and project managers. The United States has adequately addressed this risk, with the creation of a triple structure which ensures relevance of budgets, plans and processes: the PPBE, JCIDS and the Defense Acquisition System. This three-tier organization addresses weapons purchases, planning and interoperability among all systems. France possesses an equally relevant safeguard, in the form of the DGA (General Delegation for Armament), composed of military engineers who verify that all military acquisitions do indeed serve the interests of the nation. Both these countries have also developed a capacity to address innovation (clusters such as the Defense innovation agency, with over a billion euros in research, or DARPA in the US). The British also has a defense procurement chief, but who is generally a political appointee, not an expert. The numerous delays and collapses which their armament programs have undergone, such as the Ajax and Astute programs, may or may not be linked to this configuration. Germany also has a procurement office, the BAAINBw, but which neither fulfills project management, nor employs military engineers or experts insufficient numbers. Defense activities are not popular in Germany, and the lack of prestige for such activities leads top engineers to choose the automobile or machine-tool sectors over armament. Despite recruitment incentives, the BAAINBw is understaffed at 15% of its capacity.
Forae and networks
In order to promote both national and European sovereignties, Europe is using an asset which it shares with the United States military: only France and the US combine intense military activity and sovereign armament production. The UK was in a similar configuration throughout the 20th century, but its interventions have been fewer recently, and its military industry is on the decline. Germany has a powerful industry, but few of its soldiers ever see operational conditions. Other countries in the world either lack the operational experience, or the engineers to share it with. By creating many organizations in which engineering firms can have direct access to, France and the United States create valuable synergies and ensure fresh data is regularly available to industrial firms. The IHEDN is, by far, the most prominent example of where ideas and feedback can be shared, as it creates a defense ecosystem between civilian and military environments. While connections are made through this facilitator, more precise data, regarding either operational purposes or technical parameters, will be shared, processed and exploited through other agencies, such as the DGA, AID or the doctrine and lessons-learned centers of the different services. By stimulating innovation and drawing on the most consistent experiences of member states, Europe can have access to armament and systems which are perfectly adapted to the environments where they will operate. What applies to Europe, as a whole, applies naturally to individual nations, which then benefit from the coordination and leadership of the EU. If all military potential is to be drawn towards a common defense ecosystem, the EU must gather all nations around the common goal – something which individual States are responding to. The French Senate report from 2019 reads: “The next step was to set up a European Defence Industrial Development Programme (EDIDP – PEDID in French) that would be focused on R&D. This programme is on an entirely different level than the preparatory action, since it includes a budget of €500 million over two years (2019-2020). It is the subject of a regulatory text which establishes operating procedures, specifically the co-decision procedure, and which also defines eligibility rules. More precisely, these rules define the EDTIB. This is a first and a fundamental step forward, and it should be emphasised that while this objective did not seem easy, it was reached fairly quickly.” Whichever projects will be allocated funds by the EDIDP, and the future EDF (European Defence Fund) will draw directly on ground-based experience.
The question of the position of private industrial firms is a tricky one, as general Eisenhower warned his fellow countrymen, upon leaving office. Should industries be purely private, as they are in Germany – which leads to independence from misplaced influence, but serves domestic interests poorly? Should they be state-owned, as many are in China, blurring the lines between public policies and private interests? This configuration also occurs in Europe, with firms such as Navantia, entirely owned by the Spanish State. Here again, France and the US seem to strike the right balance with armament companies being purely private (such as Nexter, Naval Group, Northrop Grumman or General Dynamics) but serving their national armed forces as main customers. Regarding France, the privatization, which turn national arsenals into private companies, was designed to enhance performance, and led other European private firms to become open to partnerships (such as KNDS, the joint venture between Nexter and German KMW). Naval Group is also a private firm, part of whose shares are owned by the State, as a natural stakeholder. Regarding the French situation, Naval Group seems to have achieved a successful balance, and is posting record sales, whereas its German and Spanish counterparts seem to have lost their know-how or relevance. German TKMS’s latest military ships were sent back by their own Navy, due to design flaws, and Spanish Navantia is still to recover from its latest embarrassing blunder. Public arsenals were not providing enough performance, and purely privately-owned firms would lead States, as main clients, to be totally disconnected from the firms which uphold their defense capacities.
The hybrid configuration, as implemented by France, connecting industries and armed forces by a sound network of relevant stakeholders, leads equipment to be built in an always-more relevant fashion and ensures national or international (in the case of Europe) interests are not hijacked by companies. This risk led Germany, who is generally known to protect private companies from being absorbed by State interests, to reconsider the privatization of HIL, its maintenance provider, so as to avoid private companies bloating defense budgets. The Center for Security Studies describes how innovating companies and armies are kept in connection, but with a proper distance: “More than half of the PESCO projects involve the development of innovative defence technologies and armaments. Most had been launched or planned before PESCO and were put under this framework to speed them up. Nevertheless, there are some significant undertakings among them, such as the programme to develop a large European drone (EURODRONE with Germany, France, Italy, Spain, Czech Republic), expected to become the main platform of this type in the EU after 2025. There are also programmes regarding small, unmanned land and maritime vehicles. These can help increase European technological competences and boost operational cooperation based on the joint acquisition of the same systems, harmonised doctrines, etc.” As such, military firms have their thumb on the pulse of up-to-date military needs, but do not fall under State control. Under this configuration, France has considerably contributed to the promotion of European security.
Before design and construction can be initiated, a clear direction must be found to adequately address the challenges a sovereign force will address. In today’s quickly-evolving military landscape, both States and firms are avid for up-to-date, tried-and-true reliable data which will tell them which way to tilt innovation projects. The US learned how to do that in the latter half of the 20th century – Europe is starting to do it too, in its gradual but steady building of European defence, built on its domestic military partners.