Slides_-_The_role_of_defence_innovation_in_NIS

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THE ROLE OF DEFENCE INNOVATION IN
NATIONAL SYSTEMS OF INNOVATION :
SOME FINDINGS BASED ON THE FRENCH
CASE
Second International Workshop of the BRICS
Project, 25-27 April 2007, Rio de Janeiro, Brazil
Claude Serfati, C3ED, University of SaintQuentin-en-Yvelines
[email protected]
Bureau.scf
 Outline :
 Main findings on the French case
 Understanding of the political
economy of globalisation
 Some hypothesis in a comparative
perspective
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Of Defence Innovation......
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 A welcome idea : addressing defence innovation in
relation to national system of innovation
 Importance of defence, nuclear and aerospace
programs in BRICS countries. Indeed,
 “Military R&D will probably continue to account for
most government industrial R&D spending in the
United States, France, Britain, and Israël” as well as
“interestingly, every one of the low-income countries
[Korea, Taïwan, Brazil, Argentina, Israël, C.S.] in our
study has been influenced by national security
concerns” [Nelson Editor, 1993, p.508]…
 …Still, an understudied field of research
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 A welcome idea : addressing defence
innovation in relation to national system of
innovation :
 Opens the ‘black box’ of State as ‘a
manager of externalities’, overcomes the
simplistic Market-State dichotomy, and
 Gives an institutional substance to the
‘State’ (MofDefence ≠Health or
environmental Ministry)
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 France, a good case study :
 A long historical record in military
affairs :




Wars under the ‘God Sun’ (Louis XIV)
Napoleonic wars
Imperial reach (late 19th century)
Intercapitalist developed countries (20th
century) mass extermination and
barbarism (2 World wars)…
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 A turning point at the late 1950s :
 The emerging of a mighty defence industry which still
plays a core role in technology policy (and beyond) , as a
combination of :
 The long-standing weight of military, and return of
General de Gaulle to power (1958)
 The role of France in international affairs (Permanent
member of the UNSC, Nuclear power)
 An economic context favourable :
macroeconomic domestic centered policies (cf
« French school of regulation », but also LASA)
 Technology policies based on large programs :

 ‘linear’ : from Research, Applied, Development
 ‘top-down’ : instrumental role of governments often
through Technological agencies
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Indicators (last year available)
GDP (est.) (IMF) (2005)
world merchandise trade (2005) (WTO) :
Exportations
Importations
world trade in commercial services (2005) (WTO)
Exportations
Importations
Aggregate flows of FDI 1996-2006 (OECD)
Inflows
Outflows
Net outflows
Number of TNCs in the Top Global 500 (2005) (Fortune, 24/07/2006)
R&D :
In proportion of GDP (2005) (OECD)
Total (PPP*) (2002)
Basic Research (2000-02) (NSF)
Military :
Public Budget (2005) (SIPRI)
Arms exports (2001-2005 aggregate total) (SIPRI)
Conventional Arms Transfers to Developing Nations, (1998-2005 aggregate total) (CRS)
French companies in the top 100 defense contractors (SIPRI, 2006) (ranking by country)**
Claude Serfati, The Role
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World Ranking
7
5
6
4
5
5
4
1
40
10
6
3
3
3
3
3
7

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
The French defence industry : a ‘Méso-systeme’ created in
the late 1950s
Theoritical background :
Sectoral and Technological IS,
‘Filières’ (or Méso-système) :




the economic structure is made up of ‘chains of production’, as
well of backward and forward linkages that cut across the
traditional boundaries of industrial activities
System rather than the individual units which it is composed
of, is the primary unit of analysis
Importance of ‘non-market’ relationships between the
components of the system
Allows for analysis of inter-sectoral relations between the
Méso-system of armaments and others industrial sectors
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 The French meso-system of armaments
(FMSA)
 Three major players with strong
interactions :
 French procurement agency (DGA)
 Defence contractors
 Technological agencies (TA) , governmentowned, acting as an interface between S&T,
being responsible for Large technological
programs in defence, nuclear (CEA) , aerospace
(CNES, ONERA) , telecommunications (CNET), ..
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Source : Author Elaboration
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Indicators
Share (in %) or absolute
number
1)Macro economic Indicators
Military expenditures/ Total budget (2006)
Military expenditures/ GDP (2006)
11,5%
1,8%
2) Manufacturing industry Indicators
Aggregate arms export surplus/Aggregate equipment good surplus (1990-2006)
Defence consolidated turnover/Manufacturing industries turnover (2005)
Defence industry employees/ Manufacturing industries Value added (2005)
Number of Defence-aeronautics-nuclear companies in the Top 10 companies of the Equipment good
(engineering)sector (2005)
3) Related technological innovation Indicators
Public Defence R&D/Total Business R&D (2004)
Total R&D spending by Defence-aeronautics-nuclear companies/Total R&D spending by the Top 20 R&D
French companies spending (2005)
Number of R&D Defence-aeronautics-nuclear companies in the Top 20 patenting Companies in France (2006)
63%
18%
6,8%
7 (7O%)
24%
24%
5 (25%)
Source : Author’s elaboration
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 What effects on national competitiveness ?
 Strong sectoral – and geographical –
international specialisation with strong
products
 Sectoral diffusion from M to C in Aerospace
and in telecommunications
 Damaging effects on the engineering and
equipment good (prof and households) .
Similar findings in USA and UK, as opposed
to Japan, Germany,Sweden, …
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Relevance for BRICs countries
 A non-starter : « War is necessary for
growth and innovation »
 Need for contextualisation of the
relations between defence and
economy :
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The sweeping changes at the era of globalisation
 1) The political economy of globalisation : a
new institutional pattern (and paradigm) :
from defence to security*
 * absence of threats
 At a theoritical level : new relations between
economy (markets and private property
rights) and politics (power)
 At the operational level : threats are
pervasive : military/civilian, public/private,
economic/social
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Geopolitical setting
Objectives
Military capabilities
Provision of the ‘public
good’ defence
Economic setting :

Macroeconomic
(public)
Defence 1945-c.1990
Two superpowers for the
world order, and a Cold war
(and also numerous wars)
External
threats :
military,
coming mainly from hostile
States:
Internal threats : criminality,
social unrest
Monopoly
of
legitimate
coercive violence (external
and internal)
Nation-states, UN in limited
conditions, NATO for the
transatlantic bloc’s members
- Monopoly of legitimate coercive violence
- Rise of private transnational authorities (violent
groups, military private companies, transborder
network, …)
States, private authorities (agencies of States,
acting as ‘principals’, UN, NATO (global security
organisation?)
-Compression of military spending because of
public deficits constraints (1990s),
- Then rise when threats are invoked (2000s)
Emerging of a ‘security economy’
‘Transatlantisation’
of
arms
production,
shareholder-value based governance of defence
Prime contractors
Industrial
(mesoeconomic)
National
managerialism
technostructure)

Technological
Diffusion from military 
civilian (1950-70), then from
civilian  military (1970-1990)
Defence as a ‘pure’ national
public
good
(Samuelson,
Stieglitz)
of defence :
separation
of
disciplinary
fields
(economics,
international
relations,
political sciences, sociology,
…)
Epistemology
Threats : intertwining of external and internal
insecurity :
military,
environmental,
natural
resources, criminality, migrations, social unrest, …
Anti-cyclical (keynesian) role
of defense budget

Economic theory
Security c.1990-2006
One superpower, and an increase in chaos and
world disorder (fragmentation/hierarchisation)
champions,
(Galbraith’s
Integration of technologies  Information and
security technologies
Security as a global Public good (Kaul, Sandler, …)
of security :
Need for interdisciplinary research (economics,
international political economy, political sciences,
sociology, anthropology, …)
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
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Acknowledgement of globalisation as a highly uneven and
differenciated process
“A broad approach to Security in the 21st Century, which
recognises the importance of political, economic, social and
environmental factors in addition to the indispensable defence
dimension " [Washington Nato Summit, 23rd and 24th April
1999]. Preserving free access to key resources central for
NATO.
“The global economy is driving the haves and the haves-not
further apart, including in the United States, and the backlash
against globalisation may pose a specific threat to America’s
security when activities turn to riots and violence to protest
multinational corporate power [Traverton, Rand Corp., U.S.
House’s representative Committee on new threats emerging
from globalisation, 2005, p.3]
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

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A Transatlantic-driven agenda
The USA sets the agenda and the new (technological) race to armaments
(50% of World Milex, 75% of World Mil R&D, etc.), but
The EU has entered the race… :
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Through NATO
‘The European Security Strategy’ (European Council, December 2003)
“It is a mistake however, to think that soft power is a natural strength of
Europe although the EU seems in some respects the apotheosis of soft
power. Internally it operates by law; externally it uses force largely in
peace- keeping mode. But soft power goes with hard power internationally
as it does domestically”[Cooper*, 2004, p.xx]
*Former Diplomatic Adviser to T.Blair, now Adviser to J. Solana, Head of
Foreign and Security Common Policy (CSFP)
Still,with a different role of the US :
The European Security Strategy is “the most developed example of a
postmodern state’ and hence the better suited to implement a "postmodern
imperialism“[ Cooper*, 2002, p. 15]
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 2) Political economy of defence innovation :
 A) New strategic and technological doctrine
: The network centric Warfare (NCW) based
on an extensive use of ITC :
 “The U.S forces must be prepared to
operate ‘deeply within societies’ and in
urban areas where so-called elites
generating the conflict are often based [..]
Cebrowski believes the basic theories of
warfare behind net-centric operations apply
to all forms of conflict and competition”
[Hugues, 2003].
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 B) This induces a new era in relation between
military and commercial technologies :
 Spin-offs (or spillovers) of M to C considerably
decreased from 1970s onwards; spin-in (or
spin-on from C to M increased
 From Plat-forms (Aircraft, Ships, Tanks …) to
‘Systems of Systems’ 
 Prime Contractors are moving up the value
chain  ‘Lead System Integrators’ and ‘Service
providers’ and
 Become more internationalised and shareholdervalue oriented
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 C) Technological dynamics in defence
:
 Requires stong organisational (including
relational) and financial capabilities
 Not so much producers of technologies
as Integrators of technologies developed
elsewhere (SMEs, Public labs,…)
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Some proposals for a comparative
perspective
 1) Defence innovation capabilities are (partly) driven by
geopolitical, historical factors, military role in the world
affairs, etc.
 2) Relations between defence innovation and NIS are not
similar over time and between countries
 3) Diffusion of defence technologies in commercial
sectors slowed down since the end of the 1970s
 4) State impulse remains decisive for technology
development, but large environmental, health programs
will have more dynamic effects (and obviously welfare
effects) (warfare vs welfare effects) .
 5) Useful to address defence innovation in BRICS
countries against the NIS and political economy of
innovation
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