Defence Industrial Strategy in an adaptive age

For a Defence Industrial Strategy to be impactful, it must engender an industrial base that is every bit as adaptive as the Armed Forces need to be, argues PA Consulting, setting out these three areas of suggested focus
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By PA Consulting

10 Mar 2021

The delayed UK Integrated Review of Security, Defence, Development and Foreign Policy and associated Defence Industrial Strategy (DIS) is intended to be the latest in a long line of reviews in this area over the last couple of decades. Previous reviews have had mixed results. Almost all have attempted to predict the future, then encouraged Defence to focus investment and research and development efforts accordingly.

But the future is rarely predictable, particularly now, and industrial strategy is not a static problem with a static solution. Just look at the events of recent years: technological developments, the increased breadth of potential adversaries, Brexit, COVID-19, and the erosion of the boundaries between war and peace.

Predictions of what military capability will be required tend to be obsolete long before an ‘aim and shoot’ industrial strategy has the chance to have an impact. Take, for example, the 2017 defence policy, which lacked the built-in flexibility to enable industry to respond to continuous change. It failed to predict the broader range of threats and the emergence of space and cyber as new theatres of operation. Nor did it foresee the increased focus on information advantage, modularity, integration, adaptability and exploitation of new technology in order to generate capability that is more than the sum of the parts.

For a DIS to be impactful, it must engender an industrial base that is every bit as adaptive as the Armed Forces need to be. While achieving this is easier said than done, the 2021 Integrated Review and DIS provide a pivotal opportunity to establish an adaptive system. To seize this opportunity, the three areas of focus should be:

1. Design for flexibility in a volatile world

Instead of focusing Defence industry efforts on responding to a snapshot of the future, any view of the future should assess axes of uncertainty, or how the world might change. This creates a range of future scenarios in which to explore how industry may need to change. An example of this is below:

Any view of the future will need to consider the differences across domains and technological areas, providing direction and investment confidence on prioritisation areas. And it must be enabled by an approach to force development that considers industry implications earlier in the process. This will enable industry to focus investment on developing capabilities of critical strategic importance, while maintaining the flexibility to respond to specific emerging requirements.

2. Create a collaborative system between industry and government, with systematic information sharing

The need for adaptability in capability development and delivery increases as Defence moves to engage across a wider set of operations through the Integrated Operating Concept 2025. To deliver the required transformation “from an industrial age of platforms to an information age of systems” through a more adaptive enterprise, the Ministry of Defence (MOD) and industry will need to collaborate, and do so with much more systematic information sharing. Without this, it will be very challenging for the enterprise to invest and deliver with the development cadence required.

Specifically, the MOD needs to be able to securely share its capability challenges in order to drive confident and focused industry investment, and to encourage competition or identify areas where more public-private sector partnering is required. With the cadence of capability development expected to be high in many areas, a regular forum to share progress, understand challenges on all sides and adapt as needed will be vital. Increased use of common standards and open architectures will be critical to this blended approach – specifically in enabling access to and participation of smaller, niche and emerging players that may just, with clear integration pathways, deliver battle-winning capability. Capability delivery therefore needs to be segmented so that areas requiring many players and free market behaviour can be treated differently from those that require partnering to maintain sovereign capability. The aim should be to create an ecosystem where innovation, collaboration, entrepreneurialism and flexibility are actively incentivised.

For example, Team Tempest is made up of a group of industry partners: BAE Systems, Rolls Royce, Leonardo and MBDA. These partners are working with the RAF’s Rapid Capabilities Office and the MOD to develop the technologies needed for the next generation of combat air. This collaboration is enabled by sharing requirements early and a proactive focus on de-risking the programme and sustaining capability.

If existing industry participants and potential market entrants can see the opportunities for future success in a capability system characterised by open architectures and behaviours, greatly improved market engagement and investment focus should follow. This will lead to more efficient and effective delivery of the right capability for the future.

The rest of this article is available to read here. 

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