Defence technology economic domicile

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Background to the Network Centric Warfare projects and the involved ideas and actors

During the 1990s, the land forces in many countries wanted to start development programmes of a vast scope aiming at creating similar systems that already existed in the air forces and navies. Earlier land forces had been provided with equipment when specific equipment systems had been exhausted or new needs of different kinds emerged. Land forces equipment had also mostly been replaced by one equipment system at a time. The aim was instead to transform entire land forces into interconnected systems according to United States Government Accountability Office (Pernin et al, 2012). Similarly to air forces and navies, land forces were supposed to be able to combine interconnectivity with widespread use of precision weapons unlike what had been the situation before. To put this development into context, a background explanation is needed.
To understand and create a picture of the situation for military technology acquisition during the 1990s and 2000s the situation during and after the Cold War is important to keep in mind. Changes took place in security politics but also in the conditions for how defence technology was sold and viewed. In most cases, the defence industry and therefore defence technology had a different relationship to government acquisition before and after the Cold War. During the Cold War, the defence industry had stronger ties to the different armed forces in most countries due to the tensions between the main military alliances, the North Atlantic Treaty Organisation and the Warsaw Pact. Armed forces had a relatively steady flow of technology acquisitions from the respective governments and their armed forces. During the Cold War, the state for the defence industry was stable. Armed forces in most parts of the world had relatively well-defined tasks and plans for organisations and equipment, and their development and replacement. The settings for different armed forces were stable.
After the end of the Cold War, the need for defence equipment decreased considerably and budgets for armed forces were decreased, which eventually affected the defence industries. Parallel in time new and different issues arose, where mostly in the Western part of the world, peacekeeping missions became an issue to deal with and became more important compared to the situation during the war. Decreased defence spending also affected the situation for the defence industry generally. The less secure flow of acquisition from governments created a need for the defence industries to think about what to develop and they could not necessarily wait for acquisition initiatives from armed forces.
When defence budgets shrank, the need for selling defence equipment increased, including complex military technologies to elsewhere as well as in the homeland of the defence industry (Kovacic & Smallwood, 1994). The defence industry can deal with decreasing market and has been shown to be similar to any other strategic business change in other industries by changing within the company. Defence industries had to start adapting to the new circumstances (Smith & Smith, 1992). Strategy changes, like increasing the number of mergers in the defence industry, were also a means to deal with decreasing defence budgets (Markusen, 1997). Still, the austerity among the armed forces would have consequences if defence budgets were decreased in such a way that the defence industry were no longer able to exist or keep qualified competence. The defence industry can adapt to new circumstances but also make use of new emerging opportunities.
The situation after the Cold War also meant that a moment of détente started a time of austerity during the 1990s in the United States and in Europe. New ideas spread about changing the perceived inefficiencies of the land forces in Europe and the United States. These ideas were built on emerging communication technology developments, which were driven mainly by civil society. It was also thought that the increasing pace of technology development could no longer be led by military technology development but instead had to be followed according to Swedish officials (Nilsson & Nordenberg, 2014). The descriptions of the new ideas were about revolutionary events in military development and more specifically concerning military technology and its impact on military affairs. The ideas were described in concepts with names like Revolution in Military Affairs, Network-Centric Warfare and System of Systems. The new ideas in combination with the austerity and lesser resources for armed forces, but also a will to create better and more effective land forces, led to studies for vast projects aiming at defence transformation. The transformation was supposed to be implemented radically as described by Markard & Truffer (2006) and related to high technology industries. The transformation should be implemented in a radical manner by the US Army, according to Pernin et al. (2012). The radical transformation was planned to be implemented through mega projects developing a Network-Centric System of Systems of a new and different kind.

New times and emergence of new ideas

The new ideas about how future conflicts might play out were to a large extent principles and concepts based on how a technologically qualified opponent would be fought with the help of sensor-supported precision weapons interconnected through automated computerised networks. Soviet Marshals had expressed the basic ideas long before, during the 1970s and 1980s. During the 1990s, it was suitable to create the Network-Centric Warfare concept, a so-called System of Systems, since the Cold War had ended and the absence of tensions made it possible for a changed course in Military Affairs. What the Soviet Marshals had called the Military Technology Revolution now became the notion called Revolution in Military Affairs. At the same time, the common technology development had increasingly been taken over by civil society. The development of high technology solutions regarding mainly communication systems would not be developed by acquisition of armed forces from the defence industry. Instead, commercial firms would lead communication technology systems development according to official (Nordenberg, 2013). The price and development times for military technologies were continuously increasing for several reasons which did not affect civilian technologies. Cost efficiency had started to become an important factor and increasingly important to address in large defence acquisitions (Hult, 2015). The development of systems for computerised communication was no longer done by military standards specifications since the developments in computerised communication were much faster than any expected lifetime for the average military communication system. High-ranking officers understood the potential of combining computerised communication systems with precision weapons.
The foremost advocates for the new ideas were the supreme leaders of mainly the land forces in the US and in Western Europe, who saw the equivalents in air forces and navies that already had network-based systems for precision engagement. High-ranking decision makers wanted the same capability for the land forces. An additional but parallel concern had earlier been about how to counter the Warsaw Pact forces in Western Europe. Now it was believed technology could be developed to counter such adversaries.
These ideas led to plans for completely new kinds of defence equipment that would be capable of fighting in combined computerised communication networks and capable of combating an enemy before those had even discovered the then future System of Systems. Some perceived necessities for reaching a new kind of fighting capability was the capacity to lift entire land forces by air, which required very light vehicles. All new technologies comprised comprehensive systems with new organisational concepts and were supposed to be developed through vast comprehensive development projects.
The scope for the development projects would be huge. For example, almost the entire US Army and the entire Swedish Armed Forces were subject to change under the respective plans. Great expectations were raised of creating new land forces which would be using computerised communication system technologies to a degree never seen before. Furthermore, the aim was to use the much faster civilian pace of communication technology development that would create networks with new types of vehicles. New principles of functions and automated functions and vehicles with different subsystems were supposed to be implemented. The start of planning for large and complex projects, with vast ambitions was initiated during the mid- to late 1990s.
The objectives were ambitious, since a great deal of the involved technology was immature or not yet developed, and some of the technical requirements were incongruous. New materials needed to be developed before any implementation and to fulfil the main precondition, swift reaction forces capable of combating any enemy with the so-called “fog of war” dissolved. The planned development included new components with a great amount of not yet developed and unknown technologies, which were intended to be developed at a fast pace.
The plans and implementations could instead have been made in a less ambitious manner with the development implemented in steps followed one after the other. It would have been a slower way to implement the developments, but perhaps less risky. The development could for instance also have been easier to discontinue if obstacles emerged. Two kinds of approach can be noted in the development of military technology when considering the amount of resources used for development and possibly how complicated a development is planned or turns out to be: radical (or revolutionary) and incremental (or evolutionary) (Norman & Verganti, 2014).


Different methods of inventing and developing new defence technology

Development of military technology can be done using two main approaches. The first is to put a large amount of resources and energy into development to try to reach a breakthrough in development. Such radical innovation sometimes involves new or even completely new technology from each new technology generation or system. The second is to put fewer resources into development of more isolated smaller components of, for instance, a comprehensive system. This is a more evolutionary development, where technology is developed in incremental steps (Markard & Truffer, 2006; Srinivasan et al., 2002, respectively). In military terms, radical development of technology can potentially create a large advantage against an adversary who does not possess such technology or by sudden use of new technology against an unprepared adversary. For the defence industry, radical development could give larger resources to be used for upholding technology development activities unlike with incremental development, which would lead to comparatively less resource-demanding technology development. Having described the different main approaches to defence technology development, the context of the economy around defence acquisition needs to be understood.
The times of change and vast development projects with radical aims should also be understood in conjunction with the workings of the defence industry and the economy regarding governmental acquisition. In the society defence technology is developed and produced by defence industries and only armed forces, or a specific intermediary authority, are buying defence technology systems.

Defence technology economic domicile

Defence technology owned by the armed forces is economically related to society as a common resource, since the purpose of the armed forces and the technology they use are concerned with the defence of entire societies. In an economic sense, national defence is connected to the economics of goods as being a public resource and public good that nations own which becomes a resource for countries. The type of goods that defence technology economically belongs to depends on the ownership of the technology because it can belong to either the defence industry or the government as being the armed forces. Defence products are not publicly accessible for the public to buy and use freely, which makes the domicile of defence technology a special area. The ownership of defence technology shifts from being public enterprise goods when developed and produced when an armed force finally buys it and it becomes pure public goods. Defence technology goods can then be categorised economically.
Goods can be arranged in terms of rivalrous or non-rivalrous. A rivalrous good is consumed when used, while non-rivalrous goods are not. Goods can also be divided into excludable or non-excludable, which considers whether a good can exclude anyone from using the good. The different properties of excludability and rivalrousness can be put in a table with excludable and non-excludable opposite rivalrous and non-rivalrous. Table 1 illustrates extreme alternatives where four different categories can assume gradual examples in the classification. Many types of goods can be positioned in between and possess more than one of the different properties and classifications.

Table of contents :

What are mega projects?
Research questions
Chapter 1 – Background to the Network Centric Warfare projects and the involved ideas and actors
New times and emergence of new ideas
Different methods of inventing and developing new defence technology
Defence technology economic domicile
The economy of defence goods and technology
Organising of marketing and selling of defence systems
Delivered value for the military customer
Packaging of defence technologies with Systems Selling
Packaging of products with Product Service Offerings
Some concerns regarding defence goods and interests of actors
The interests of different actors
The defence industry actor
The end user actor
The political actor
The different actors in the Network-Centric Warfare cases
Thesis structure
Chapter 2 – Literature and theoretical framework
Institutional environment and power among groups and individuals
Different groups of interests and stakeholder surveying in organisations and in project management
The spreading of ideas as marketing
Ideas for change and transformation of organisations
Human interactions and perception of organisation change
Invisible taken-for-granted structures in organisations
Individuals and different interests in organisations
Large pressure groups and special interests
Ideas materialise and then become ideas again
Ideas and anticipation of change
Ideas and control
Radical or incremental transformation by technology development
Technology management and management of mega projects
Technology management
Project management
Management of mega projects
Risk management in mega projects
Risk of pitfalls and failures of mega projects
Chapter 3 – Methodology
Research design
Backgroud and choice of cases
The choice of three projects
The events of the different cases
Structured narratives
The dynamic appearance in the project cases
Credibility of the case study
Literature study
Empirical material
Data processing
The need for an epilogue in narrative inquiries
Chapter 4 – The emergence of the Future Combat Systems programme
Background to Future Combat Systems
The actors within and around the Future Combat Systems Project
The ideas leading to the project and the analepsis
Revolution in Military Affairs
Early criticisms during planning of the Future Combat Systems project
Future Combat Systems as a defence acquisition mega project
Future Combat Systems project review and the starting point
Sequence 1 of the Future Combat Systems mega project
The Government Accountability Office Testimony August 13, 2003
First turning point
Sequence 2 Second turning point
Sequence 3 Third turning point
Sequence 4 The end point of the Future Combat Systems project
The US Government Accountability Office
The epilogue of the Future Combat Systems project
Analysis of the Future Combat Systems project
Chapter 5 – The Ledsys project as a defence acquisition mega project
Background to the Swedish focus on Revolution in Military Affairs
The actors within and around the Ledsys Project
Analepsis of the Ledsys project and reports by Science Applications International Corporation (SAIC)
Critique of the Network-Based Defence development
Branch-specific resistance to the Network-Based Defence transformation
Spreading of the restsitance to politicians in the Parliamentary and the Government
The defence industrial perspective and differing agendas within the consortium
The timelines of the Ledsys project and the Network-Based Defence development
Sequence 1 of the Ledsys mega project
The Swedish Agency for Public Management and the Swedish National Audit Office
Turning point 1
Sequence 2
End point of the Ledsys project
End point of Common Information Picture
Analysis of the Ledsys project
Chapter 6 – The French Scorpion project
Background to the Scorpion programme and Revolution in Military Affairs of the French Army
The actors within and around the Scorpion project
Analepsis of the Scorpion project
The reform of the French armed forces
The 2015 army transformation (le modèle d’armée 2015)
Lessons from other similar projects
Scorpion as a defence acquisition mega project
Scorpion aims
Directorate General of Armaments
Differences between the Scorpion project and Future Combat Systems
Timeline of the Scorpion programme
Description of the Scorpion programme
Starting point of the Scorpion project
Sequence 1 of the Scorpion project
Turning point 1
Analysis of the Scorpion project
Comparing the similarities and differences between the turning points and sequences
The narrative epilogue
Chapter 7 – The discussion of the dynamics in the three mega projects
Introduction to discussion
The competition between cultures for change
Differences between Swidler´s model and mega projects
The implication of Swidler´s model of culture on the three compared mega projects
Epiphanies change the paradigm
The interplay of power between project management and stakeholders in mega projects
Conclusion of the discussion
Chapter 8 – Conclusions
The limitations of the comparison and the conclusions
Suggestions for further research
The contribution this study makes to the field
Systems Engineering Management and System of Systems
Life cycle management of technology systems using Systems Engineering
Systems Engineering
Systems Engineering Management
System of Systems
Ants, ecosystems, air traffic systems and Future Combat Systems
Characteristics of System of Systems
Controversies around System of Systems


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