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Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

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Page 1: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Conclusions for the New NATO Members from the UK Experience in Defence

Research and DevelopmentAuthor: Ventzislav Atanassov,

MSc in Ec., MCSc

Page 2: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Conclusions for the New NATO Members from the UK Experience in Defence Research and

Development

• Introduction

• UK R&D Policy and Organizational Transformations During the Last Decade

• Conclusions for the new NATO members

• Closing remarks

Page 3: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Introduction

• The new NATO members meet some challenges and difficulties on the way of transformation of their defense industrial base according to NATO standards

• The UK with its strong defense industrial base, and tradition in research and development (R&D) policy could be good example how to succeed

Page 4: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

UK R&D Policy and Organizational

Transformations During the Last Decade

• UK R&D Policy

• DERA (Defence Evaluation and Research Agency) and its future

• A critique of New DERA

• International colaboration

Page 5: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

UK R&D Policy

• Defence research enables MoD to be “intelligent customer” and an informed decision maker.

• In its 1998 Strategic Defence Review, the British Government confirmed its commitment to maintaining a “strong British defence industry”

• Ability “to continue to procure the right equipment for UK Armed Forces at competitive prices”

• For 1998-99, over 70% of MoDs procurement spending was with UK industry; 13 % was spent on co-operative programs; and the remaining 16% was spent on imported equipment.

Page 6: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

UK R&D Policy

• Policy aimed at a gradual reduction in the real level of defence R&D over the next decade

• Industry expected to undertake more of the research as a result of exposing DERA to greater competition

• With limited defence budgets, MoD cannot afford to be at the forefront of research in all defence technologies

• Difficult choices for the R&D future

• MoD has a list of key defence technologies (the list is classified)

Page 7: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

UK R&D Policy

• Technology strategy of MoD

• Combined with civil national industry strategy for defence and aerospace

• As result joint national strategy identifying areas of technological excellence “Towers of Excellence” (around 100)

• MoD expects the Towers of Excellence model to enable it to make defence technology choices by being selective in a rational way

Page 8: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

UK R&D Policy

• The Towers of Excellence model aims to develop world class defence technology capabilities in selected areas

• Faced with budgets pressures, MoD policy has been to continue to search for value for money from its defence R&D expenditure

• Smart Procurement Initiative (now known as Smart Acquisition) introduced a new acquisition procedure

• Efforts to promote the transfer of technology from defence research (DERA) to both defence and civil industries

Page 9: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

DERA and its future

• UK defence R&D is undertaken either “intramurally” in MoD’s research establishments or extramurally mostly in private industry

• Y2000: DERA has an annual turnover of some 1 billion Pounds sterling and employs over 11500 staff in the UK

• Y2001: Two new units were formed, namely, the Defence Science and Technology Laboratory (DSTL) (elements with government business) and “New DERA” (the Core Competence model, I.e. private owned company)

Page 10: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

DERA and its future

• New DERA – part of Government’s Public Private Partnership Policy (PPP)

• the main aims of this PPP:– improved opportunities for exploiting technology “locked up” in

DERA

– improving access to technologies from the civil sector for military application

– introducing private capital to meet DERA’s investment needs

– exposing the Agency to private sector disciplines

– providing increased freedoms for DERA

Page 11: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

A Critique of New DERA

• The Parliamentary Defence Committee - a major critic of plans to privatize DERA.

• It is concerned about ambiguity over New DERAs involvement in defence manufacturing

• Which of New DERAs assets are regarded by MoD as of “strategic importance”

• Continued uncertainty about the extent of controls on foreign and individual shareholdings in New DERA

Page 12: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

International Colaboration

• Collaboration requires the UK to choose between Europe and the USA

• European collaboration allows the UK to be a major partner in high technology defence projects with corresponding implications for UK defense R&D expenditure (ex. “Eurofighter”)

• Collaboration with the USA might be based on the Joint Strike Fighter (JSF) model where the UK is a full collaborative partner contributing 10% of total development costs

Page 13: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Conclusions for the new NATO members

• Proper defined in the guidance documents R&D policy

• R&D policy must be supported by respective organizational structures

• There must be and continuation of this policy from one government to another

• Ability to expose these R&D structures to influence of market economy and competition

Page 14: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Conclusions for the new NATO members

• UK principles of Smart Procurement Initiative

• R&D policy must be supported by the framework of R&D regulations and standards

• Clearly defined Towers of Excellence for the national defence industrial base

Page 15: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Conclusions for the new NATO members

• For the smaller countries the impact should be placed on the international collaboration in R&D

• The percentage of defence R&D budget as a part of the whole defence budget should be big enough

• Discussion arise about the share of procurement spending with national defence industry, the share spent on co-operative programs and the share of imported equipment

Page 16: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Conclusions for the new NATO members

• To introduce principles of Public Private Partnership (PPP)

• Privatization of parts of defence R&D, but not cut and destroying these parts

Page 17: Conclusions for the New NATO Members from the UK Experience in Defence Research and Development Author: Ventzislav Atanassov, MSc in Ec., MCSc

Closing remarks

• There is a lot that the new NATO members could learn by the experience of the UK in defence R&D

• Transformation of defence R&D is the process which is actual for all NATO members and it is good to exchange experience and ideas