‘I have seen the future and it works’: The US defence industry transformation – lessons for the UK defence industrial base

The US has embarked upon a major transformation of its approach to defence industrial base planning. Although bureaucratic and industrial inertia, as well as budgetary constraints, may delay transformation, its effects will lead to radical changes in the US defence industrial base with new entrants and new combinations of players. The UK, with more modest defence ambitions, capabilities and budget, will seek to keep in touch with the US. However, a commercially‐led drive to embed UK industry even more deeply in the US defence market could be the last step in creating a largely US–UK North Atlantic relationship, with much of Europe very much a subsidiary business concern. This contains a risk that the UK will become increasingly dependent on the US for design and integration of major systems and national defence industrial capability focused on a limited number of niche technologies.     

Allocating the U.S. Department of Defense Budget: Revisiting the ‘Incremental/Fair Share Model’

Abstract

This article examines the ‘incremental/fair share model’ that was proposed by Alex Mintz in 1988 concerning the budget allocation of the U.S. Department of Defense. Although Mintz was unable to confirm the correctness of his model, this study demonstrated it to be statistically significant. In the statistical analyses, I used the two-stage least squares method and Durbin’s h-test to better scrutinize the model’s adequacy. Few previous studies have addressed the allocation of the U.S. defence budget; consequently, the incremental/fair-share model should constitute a starting point for further research on the U.S. defence budget allocation.     

Estimating defence budget saving from disarmament: the United States’ case

Probing the technology in the production of US national defence by using a dynamic cost‐function model with adjustment costs, this paper evaluates the effect of reducing the level of national defence on the defence budget saving. Our inquiry involves estimating the defence production structure without output data for non‐market goods that are normally unavailable. Our findings include: (i) the United States behaves rationally to minimize cost in the production of national defence; (ii) the adjustment costs are larger in disarmament than in military build‐up; (iii) due to the adjustment costs peculiar to disarmament, the defence budget saving from disarmament appears small, but cutbacks allow great savings on the defence budget.     

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.     

Efficient budget allocation strategies for elementary effects method in stochastic simulation

This paper focuses on extending the Morris' elementary effects method (MM) for sensitivity analysis/factor screening originated in the context of deterministic computer experiments to the stochastic simulation setting. Given a fixed simulation budget to expend, the main objective is to provide efficient and accurate estimates of main and interaction (or nonlinear) effects coined by the standard MM for characterizing the importance of each factor, despite the impact of simulation errors. Taking into account both the factor/input sampling uncertainty rooted in MM and the random errors inherent in a stochastic simulation, we develop efficient budget allocation strategies for implementing MM in this new context. Under each strategy proposed, we derive its corresponding optimal budget partition and optimal budget allocation rules. Numerical results corroborate the practical effectiveness of the proposed budget allocation strategies.     

The elephant in the room: US ballistic missile defence under Barack Obama

Conventional wisdom seems to hold that under Barack Obama, the US ballistic missile defence programme has been pushed aside to allow for a refreshed domestic and international agenda. Proponents point to Obama's campaign thinking and rhetoric, the ballistic missile defence (BMD) budget cuts, the decision to end the Third Site in Europe, and the reset relations with Russia through the New Strategic Arms Reduction Treaty (New START) as evidence that the programme has undergone a significant period of change, retraction and rationalisation. This article argues instead that BMD has not fallen from prominence and that there is a change in focus rather than retraction of its strategic goal. Consequently, BMD continues to grow in importance as a component of US national security strategy.     

The UK defence electronics industry: adjusting to change

The electronics industry provides components and capabilities that are critical to modern defence requirements. It is anticipated that the effectiveness of both weapons systems and the command and control network that supports military operations will become increasingly dependent upon the electronics sub‐systems they employ in the future. With the ascendancy of ‘network centric warfare’, it seems certain that defence electronics will continue to grow in importance in the future, enabling far‐reaching advances in military capability and efficiency. Yet little is known about the structure, conduct, performance and competitiveness of the UK defence electronics sector as it prepares to meet the challenges ahead. This paper reports the findings of a study commissioned in 2002 by Intellect, the UK defence electronics trade association, and supported by the Department of Trade and Industry. The UK defence electronics industry is found to be a high technology, R&D‐intensive and decreasing cost industry, which is competitive in world defence markets. The UK industry faces major competitive threats in the future from established US and European firms and from potential new entrants from China, India, Israel, Singapore, South Korea and Turkey. The future competitiveness of the UK defence electronics industry will depend on maintaining both technical advantage and open access to the large US market.     

A worst‐case formulation for constrained ranking and selection with input uncertainty

In this research, we consider robust simulation optimization with stochastic constraints. In particular, we focus on the ranking and selection problem in which the computing time is sufficient to evaluate all the designs (solutions) under consideration. Given a fixed simulation budget, we aim at maximizing the probability of correct selection (PCS) for the best feasible design, where the objective and constraint measures are assessed by their worst‐case performances. To simplify the complexity of PCS, we develop an approximated probability measure and derive the asymptotic optimality condition (optimality condition as the simulation budget goes to infinity) of the resulting problem. A sequential selection procedure is then designed within the optimal computing budget allocation framework. The high efficiency of the proposed procedure is tested via a number of numerical examples. In addition, we provide some useful insights into the efficiency of a budget allocation procedure.     

Defence budgets in the post-Cold War era: a spatial econometrics approach

This paper examines the determinants of national defence budgets in the post-Cold War era employing a spatial econometric framework. Using data for 124 countries over a 16-year time period, I examine spatial relationships in defence spending to investigate how countries account for the military spending of other countries when setting their budgets. Using specially developed weighting matrices, the regression results indicate that defence budgets are positively spatially correlated. These results provide support for the use of ‘external’ factors when examining defence budgets over this time period. The importance of a country’s spatial location when setting its budget is further examined through the identification of regions of high and low defence spending.     

Specialization in defence forces

The choice between balanced and specialized defence forces depends on the technology of defence output (e.g. whether a force scope multiplier is present), the existence of scope and scale economies, the platform customization costs and, of course, the level of defence budgets. Minimum force element levels (thresholds), and scale economies facilitate specialization as opposed to scope economies (e.g. platform‐sharing), scale diseconomies and the force scope multiplier (e.g. defence weakest‐link technology). When a balanced force is not optimal, the option value of a non‐optimally maintained force element must also include the opportunity cost arising from suboptimal force elements. Shrinking defence budgets may produce two surprising phenomena. If some force elements are shut down as a result of thresholds, the surviving ones may increase in platform numbers as well as enjoying closer‐to‐most‐desirable platforms. Furthermore, if heritage force elements are shut down within the budget contraction environment, overall defence capability might rise.     

无人系统路线图自主性分析

在第三次抵消战略的驱动下,受军费预算不断削减、内部成本日益增长的影响,为遏制中俄等国日益崛起的军事力量,谋求和维持未来军事优势,美军只能将目光聚焦于创新作战概念,发展以无人系统为代表的更具成本效益和作战威力的武器装备。随着人工智能和机器学习技术的进步,无人系统的自主能力得到了大幅提高,未来将可能根据任务需要,实现从远程控制、自动化系统到近乎完全自主。本文认为,美国国防部除将加快发展人工智能和机器学习技术,聚焦于自主系统带来的作战效率和效能的提高,持续评估自主系统以提升作战人员的信任水平之外,也正加紧制定相关的政策法规,以确保自主系统的研发更加规范有序。     

Striking a deal on the F-35: multinational politics and US defence acquisition

Why does joint defence production of advanced weapons systems, which appears like a logical choice at first, become harder for both the primary production state and its allies to manage and justify as the acquisition process runs its course? To answer this question, we analyze the multinational politics of the F-35 JSF with a focus on how secondary states who have bought into the program are affected by domestic politics within the primary production state. We find that US congressional and bureaucratic politics, cuts to US defence spending, and a desire to retain tight control over the program has locked allies into a program with which they have little leverage. Potentially losing the ability to fight along side the US if they don’t follow through, coupled with inter-Alliance pressures, leaves secondary states who are involved with the F-35 program, vulnerable to the whims of US domestic politics.     

Corporate performance and military production in South Africa

With the end of the Cold War and apartheid, a process of demilitarisation and dramatic cuts in military spending has marked the transition to democracy in South Africa. Between 1989 and 1997 the South African defence budget was cut by more than 50% in real terms, with most of the cuts coming from the procurement budget, which was cut by nearly 70% in real terms during the same period. These cuts have had a significant impact on the country's defence industrial base. However, there has been surprisingly little research on the changes to defence companies that have taken place since the late 1980s. This paper makes a start at rectifying that deficiency by providing an analysis of the restructuring of the major defence‐dependent companies over the period 1988–97. It uses a number of financial ratios and other measures of corporate performance to compare their experience with non‐defence companies in the rest of the South African economy during the same period.     

俄罗斯现代防空导弹体系的发展

论述了俄罗斯现代防空导弹体系 ,包括第 3,4代国土防空、野战防空和海军舰艇防空导弹体系的发展 ,对俄罗斯第 4代防空导弹体系的发展需求作了较详细的分析 ,介绍了俄罗斯现代防空导弹体系中几种典型防空导弹系统的主要战术技术性能 ,分析了俄罗斯防空导弹体系研制中的特点。     

Allocating capacity in parallel queues to improve their resilience to deliberate attack

We develop models that lend insight into how to design systems that enjoy economies of scale in their operating costs, when those systems will subsequently face disruptions from accidents, acts of nature, or an intentional attack from a well‐informed attacker. The systems are modeled as parallel M/M/1 queues, and the key question is how to allocate service capacity among the queues to make the system resilient to worst‐case disruptions. We formulate this problem as a three‐level sequential game of perfect information between a defender and a hypothetical attacker. The optimal allocation of service capacity to queues depends on the type of attack one is facing. We distinguish between deterministic incremental attacks, where some, but not all, of the capacity of each attacked queue is knocked out, and zero‐one random‐outcome (ZORO) attacks, where the outcome is random and either all capacity at an attacked queue is knocked out or none is. There are differences in the way one should design systems in the face of incremental or ZORO attacks. For incremental attacks it is best to concentrate capacity. For ZORO attacks the optimal allocation is more complex, typically, but not always, involving spreading the service capacity out somewhat among the servers. © 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011     

Country survey VIII: Federal republic of Yugoslavia

This survey article focuses on defence economics issues and provides data and analysis on the Federal Republic of Yugoslavia's (FRY) defence policy, defence spending, the size of its armed forces, its defence industries and the cost of the civil war. The main section is devoted to the period from 1990 to the present and deals with the following aspects: the situation after the break‐up of the former Yugoslavia, general economic data; the cost of the civil war, the defence budget; the armed forces; the manufacture of armaments and the structure of the defence industry.     

How to Last Alone at the Top: US Strategic Planning for the Unipolar Era

This article investigates how key actors within the US defence policy community realigned their interests to forge a new consensus on the redirection of US defence strategy following the ‘peace shock’ they faced with the collapse of bipolarity. This consensus centred on the idea that achieving US security in the ‘age of uncertainty’ demanded overwhelming US military power, which was widely interpreted as necessitating military capabilities to fight multiple major theatre wars simultaneously against regional ‘Third World’ adversaries. This helped to preserve many of the principal pillars of US Cold War defence policy through deflecting calls for more radical organisational changes and deeper cuts to defence budgets.     

Optimal power control in a wireless network using a model with stochastic link coefficients

This paper addresses optimal power allocation in a wireless communication network under uncertainty. The paper introduces a framework for optimal transmit power allocation in a wireless network where both the useful and interference coefficients are random. The new approach to power control is based on a stochastic programming formulation with probabilistic SIR constraints. This allows to state the power allocation problem as a convex optimization problem assuming normally or log‐normally distributed communication link coefficients. Numerical examples illustrate the performance of the optimal stochastic power allocation. A distributed algorithm for the decentralized solution of the stochastic power allocation problem is discussed. © 2004 Wiley Periodicals, Inc. Naval Research Logistics, 2005     

From tirpitz plan to schlieffen plan: Some observations on German military planning

This article explains why the EU in recent years has gained an upper hand in Allied defence planning. The development is surprising in light of reforms undertaken by NATO in the mid-1990s and also the 1998-99 US ambition to reinforce NATO's defence planning process with the Defence Capabilities Initiative. The article argues that a number of European governments, notably including the British and French, has been motivated to seek change because NATO's defence planning process has proved difficult to adapt to new low-intensity threats and also because governments seek to control the political development of the EU itself. The article illustrates how these concerns are directly visible in the current EU design for military planning and offers an assessment of future NATO-EU relations.     

Optimal FCFS allocation rules for periodic‐review assemble‐to‐order systems

In Assemble‐To‐Order (ATO) systems, situations may arise in which customer demand must be backlogged due to a shortage of some components, leaving available stock of other components unused. Such unused component stock is called remnant stock. Remnant stock is a consequence of both component ordering decisions and decisions regarding allocation of components to end‐product demand. In this article, we examine periodic‐review ATO systems under linear holding and backlogging costs with a component installation stock policy and a First‐Come‐First‐Served (FCFS) allocation policy. We show that the FCFS allocation policy decouples the problem of optimal component allocation over time into deterministic period‐by‐period optimal component allocation problems. We denote the optimal allocation of components to end‐product demand as multimatching. We solve the multi‐matching problem by an iterative algorithm. In addition, an approximation scheme for the joint replenishment and allocation optimization problem with both upper and lower bounds is proposed. Numerical experiments for base‐stock component replenishment policies show that under optimal base‐stock policies and optimal allocation, remnant stock holding costs must be taken into account. Finally, joint optimization incorporating optimal FCFS component allocation is valuable because it provides a benchmark against which heuristic methods can be compared. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 158–169, 2015