THE FUTURE OF UK DEFENCE RESEARCH

Developments within the UK in the Ministry of Defence’s policy on defence equipment acquisition demand changes in the scale and allocation of the Ministry’s budget for defence research. To facilitate the national debate on those changes, this paper reviews the key questions about UK defence research which the Ministry must resolve in order to implement its new Defence Technology Strategy.     

The defence firm of the future

This paper offers the personal view of a senior executive in the Defence Procurement Agency about the future requirements of the defence industry’s principal UK customer. The focus here is on trying to identify the type of corporate behaviour and range of skill sets that the UK Government will need from defence suppliers, both primes and supply chain companies in the future. The concluding message from this ‘Customer View’ is that there is likely to be a continuing market for the company that specializes in delivering defence capability. It will be a company that will be looking for a long‐term relationship, with a specialist knowledge of its various national customers and a willingness to work openly and closely with them. It will be agile in its ability to bring together diverse technologies, to package them as a system and to deliver them either as hardware or as a service. Such suppliers will also need to innovate and to adapt at least as rapidly as the threats that they seek to counter.     

防化研究院履约十年回顾

《禁止化学武器公约》生效10周年之际,简要回顾公约生效以来防化研究院参与的履约研究、核查接待、单一小规模设施建设、指定实验室建设、日本遗弃化武处理等各个方面的履约活动,以期总结经验,展望未来。     

Estimated UK employment dependent on ministry of defence expenditure and defence exports

The Ministry of Defence (MOD) has published estimates of the number of average full‐time UK industry employees dependent on MOD expenditure and defence exports for a number of years. This paper provides the outcome of a recent review of the process used. The method of deriving MOD and defence export final demand vectors, and calculating from these estimates of direct employment (i.e. that in supplying companies) and indirect employment (i.e. that incurred through the supply chain) are described. Difficulties with the data are explored. Alternative approaches, methods used in other countries and challenges posed by changing MOD administrative systems are briefly discussed.     

Defence research and development: Encouraging private venture R&D with ‘option’ strategies*

Central to the changes in UK Ministry of Defence procurement policies over recent years has been the attempt to shift risk out of the public sector. In the context of research and development this has taken the form of encouraging private venture investment, so‐called PVR&D. Recognising that the scope for PVR&D is necessarily constrained by excessive risk and imperfect information, this paper explores the possible use of Option contracts as a means of expanding the opportunities for private venture funding.     

Rent‐seeking models of international competition: An experimental investigation*

This paper experimentally tests a number of hypotheses that follow from models of international competition that are based on Tullock style rent‐seeking models. Specifically, we designed and performed experiments to see how variations in the degree of publicness in the prize as well as changes in the values assigned to the prize affect alliances in terms of individual nation contributions, total contributions, burden sharing, and the likelihood of winning the prize. While there was substantial variation in individual behavior, the results of the experiments generally conform to the theoretical predictions of the rent‐seeking model of international competition and alliances.     

Defence and firm performance in the UK

The UK Ministry of Defence is British industry's largest single customer and a number of firms and industries are highly dependent on defence sales. Various hypotheses have been proposed about the impact of defence procurement on firms and these are investigated using four performance indicators: financial structure, investment, productivity and profitability. With regard to the borrowing ratio, capital investment and the rate of return, there is no statistically significant difference between the mean financial ratios for low and high dependence firms. However, non‐dependents appear to have a higher level and rate of growth of labour productivity than dependents.     

Addressing the “headwinds” faced by the European arms industry

ABSTRACT

The European arms industry is challenged by several adverse “headwinds.” Fragmentation leads to costly duplications and, in conjunction with stagnating budgets and sharply increasing costs, prevents firms from exploiting economies of scale and learning. This is exacerbated by size differentials vis-a-vis the leading US arms manufacturers and competition from emerging producers. As some “headwinds” are self-enforcing, far-reaching industrial and policy responses are required to improve the industry's outlook. As exports may not indefinitely compensate for low domestic demand, there is an economic imperative for further cross-border collaboration and consolidation. Despite various EU policy initiatives, progresses regarding the European Defence Equipment Market and strengthening the European Defence Technological Industrial Base have been relatively slow. It remains to be seen whether the European Defence Fund will be the proclaimed “game-changer,” raising competitiveness of the European arms industry. At the same time, the UK's withdrawal from the EU adds uncertainties.     

Chains,networks and shifting paradigms: the UK defence industry supply system

Industrial supply chains have emerged as the focus of much economic and business research over the previous decade and defence is no exception. This paper reviews contributions made to the body of knowledge in this field with particular attention given to primary research undertaken on the UK defence industrial supply system. In doing so, the author assesses the quantity and quality of knowledge available to researchers, analysts and policy makers. There have been a number of valuable contributions to the literature and this paper reveals a subject that is extremely complicated, dynamic and yet under‐researched. It is suggested that it may well be this complexity and dynamism, coupled with difficulty in accessing data, that has inhibited research development in this field. Defence industry supply systems are repeatedly referred to as ‘chains’; however, primary research consistently suggests this is a misnomer – the author concludes that future analysis of the UK defence sector must embrace directly the economics of networks if understanding of the same is to progress and industrial ‘invisibility’ is to be avoided.     

The right place at the right time,or the right person in the right place?

South Africa's military has, since the First World War, been an oft-used and effective tool in the conduct of South African foreign policy, but this role has not always translated into power for Defence Department principals in its formulation. South African Defence Ministers for most of the country's history have played a minor role in the making of foreign policy; despite a change in this dynamic between approximately 1975–1990, the post-apartheid era has once again seen a diminishment of Defence's power in this arena. This article examines why Defence Ministers have generally been such weak players, with an eye toward disaggregating whether this was a product of interpersonal relationships with Cabinet and – most importantly – the Head of State, or whether this influence (or lack thereof) was more a function of South Africa's international standing. While determining who has influence on this process is difficult given the primacy of the national leader in making foreign policy and a lack of insider accounts by participants in the process, this article relies upon several interviews with participants and knowledgeable observers that help illuminate the process and Defence's role in it.     

Keeping Nothing Secret: United Kingdom Chemical Warfare Policy in the 1960s

After renouncing an offensive chemical warfare programme in 1956, the UK Cabinet Defence Committee decided in 1963 to re-acquire a chemical warfare retaliatory capability. This article describes how the re-acquisition decision was engendered by a combination of novel research findings, changes in strategic thinking, new intelligence and pressures from NATO. Despite the 1963 decision, no new chemical weapons capability was acquired by the UK and information that Britain lacked a stockpile of chemical weapons was eventually leaked to the public, initiating a fierce debate between ministries over the significance of this leak. This paper argues that non-existent technology is equally problematic for government secrecy, and equally consequential for government action, as what exists. Furthermore, actors' different interpretations of what constituted a secret, point towards a more subtle understanding of secrecy than simply construing it as the hiding or uncovering of items of information.     

On the nature and scope of defence economics

Defence economics uses the tools of economics to study the defence sector and its domestic and international implications. Simple models require careful application in defence economics, since indirect effects may have counterintuitive impacts. For example, while certain arms races can lead to the outbreak of war, others may have the counterintuitive effect of discouraging the outbreak of war owing to mutual deterrence.

The world is now multipolar rather than bipolar, analogous to an oligopoly situation. This multipolar world can be analyzed by a qualitative characteristic function, where the formation of a potential coalition allows study of the shift from conflict to cooperation in international relations. Some new issues to be considered in this framework include accidental nuclear war, potential arms races and conflicts in the third world, and the proliferation of chemical weapons and missiles.     

Croatia's bitter harvest: Total National Defence's role in the Croatian War of Independence

Croatia's successful bid for independence was one of the defining moments of the immediate post-Cold War period. Nevertheless, the means that Croatia used to obtain independence remains relatively unexamined by academics. This article focuses on the early period of Croatia's bid for secession, and specifically the role that Yugoslavia's policy of Total National Defence played in facilitating its independence. Unlike in Slovenia, where the legacies of Total National Defence facilitated Slovenia's bid for secession, in Croatia the decision of its political leaders meant that the country largely neglected its positive legacies, resulting in a protracted four-year struggle.     

Book Reviews

The purpose of this article is to analyse British strategic nuclear targeting between 1974 and 1979, prior to the successful completion of the sophisticated modification to Polaris submarine-missile system codenamed Chevaline. It will use as its starting point the parameters for UK strategic nuclear targeting, and the foundation of the ‘Moscow Criterion’, prior to the deployment of Britain's Polaris submarines which began in 1968. It will then discuss the recommendation by the Chiefs of Staff to retarget Polaris in 1975/76 and the implications of that recommendation in terms of the British approach to strategic nuclear deterrence. The article will conclude with an assessment of these retargeting decisions on the decision to replace Polaris with the US Trident system in 1980.     

Securitising humanitarian assistance and post-conflict reconstruction in Africa: A critical review of South Africa's new defence policy

The South African Defence Review 2014 is the country's new defence policy. The Review, which is expected to steer South African defence policymaking for the next few decades, discusses in detail the role of the South African National Defence Force (SANDF) in peace missions in Africa and proposes the direct involvement of the country's soldiers in both military and civilian tasks, from peacekeeping to humanitarian assistance, post-conflict reconstruction and development. This paper contains a critical review of the Review with regard to South Africa's envisaged contribution to regional and continental peace and stability. It is argued that humanitarian assistance and post-conflict reconstruction should not be securitised and that the SANDF should only be tasked with peacekeeping and the establishment of stability and security in fragile in-conflict and post-conflict settings. The humanitarian work should be left to humanitarian and aid agencies, while reconstruction and development should be left to organisations such as the New Partnership for Africa's Development, continental and international development organisations, and local actors.     

Intelligence and military doctrine: paradox or oxymoron?

This article examines the evolution of the current British military joint intelligence doctrine. We argue that military intelligence doctrine is dogged by an intrinsic tension between the ethos and expectations of military doctrine and those of the professional practice of intelligence. We further argue not only that prior iterations of UK joint intelligence doctrine failed to effectively deal with this intelligence doctrine dilemma, but also that measures in the current doctrine to address this problem directly created their own problems. Moreover, as a result, otherwise sound innovations in the current UK intelligence doctrine have proven unsuitable to wider diffusion in more recent intelligence doctrine such as the new NATO intelligence doctrine which, otherwise, draws extensively on its British precursor.     

A rent‐seeking model of international competition and alliances∗

This paper presents an alternative approach for analyzing international competition and alliances as rent‐seeking contests that are able to capture the impure public good nature of defense spending. Two‐country Cournot and Stackelberg games are considered and comparative static results derived. A three‐country model is investigated, and alliance behavior is explored in the context of this rent‐seeking model. The conjecture that an alliance may become less effective if the allies’ interests become more closely aligned is verified. Finally, the model is generalized, and a Nash‐Cournot equilibrium is computed.     

Defence expenditures and economic growth: The externality effect

In a series of articles published in the Fall 1990 issue of Defence Economics Alexander (1990), Atesoglu and Mueller (1990) and Huang and Mintz (1990) have all specified and empirically estimated defence‐growth models based on a neoclassical production function. We now isolate the externality component in our model, re‐estimate its coefficients using data on the U.S. economy 1952–88 and compare specifications and results with Atesoglu and Mueller (1990) and Alexander (1990).     

Flexible capacity strategy in an asymmetric oligopoly market with competition and demand uncertainty

This article studies flexible capacity strategy (FCS) under oligopoly competition with uncertain demand. Each firm utilizes either the FCS or inflexible capacity strategy (IFCS). Flexible firms can postpone their productions until observing the actual demand, whereas inflexible firms cannot. We formulate a new asymmetrical oligopoly model for the problem, and obtain capacity and production decisions of the firms at Nash equilibrium. It is interesting to verify that cross‐group competition determines the capacity allocation between the two groups of firms, while intergroup competition determines the market share within each group. Moreover, we show that the two strategies coexist among firms only when cost differentiation is medium. Counterintuitively, flexible firms benefit from increasing production cost when the inflexible competition intensity is sufficiently high. This is because of retreat of inflexible firms, flexibility effect, and the corresponding high price. We identify conditions under which FCS is superior than IFCS. We also demonstrate that flexible firms benefit from increasing demand uncertainty. However, when demand variance is not very large, flexible firms may be disadvantaged. We further investigate the effects of cross‐group and intergroup competition on individual performance of the firms. We show that as flexible competition intensity increases, inflexible firms are mainly affected by the cross‐group competition first and then by the intergroup competition, whereas flexible firms are mainly affected by the intergroup competition. Finally, we examine endogenous flexibility and identify its three drivers: cost parameters, cross‐group competition, and intergroup competition. © 2017 Wiley Periodicals, Inc. Naval Research Logistics 64: 117–138, 2017     

MILITARY EXPENDITURE AND ECONOMIC GROWTH IN MIDDLE EASTERN COUNTRIES: A DYNAMIC PANEL DATA ANALYSIS

Defence expenditures have both costs and benefits to the economy. The costs of defence expenditures are mainly emphasized as opportunity costs. On the other hand, defence spending may have growth‐promoting potential benefits: a rise in defence spending may result in a higher aggregate demand, production and employment. This paper examines empirically the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time‐period 1989–1999. The relationship between military expenditure and economic growth is investigated by using cross‐section and dynamic panel estimation techniques. Empirical analysis indicates that military expenditure enhances economic growth in the Middle Eastern countries and Turkey as a whole.