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DTS Paper.qxp - Royal Aeronautical Society

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28. In July 2006, the MoD announced its intention to form Team<br />

Complex Weapons (Team CW), a partnership built around MBDA,<br />

QinetiQ, Thales Air Defence and the MoD. Other companies in the<br />

guided weapons supply chain will be drawn in. There are a<br />

number of legal issues (notably anti-trust regulations) to<br />

overcome, especially if Team CW is to include Raytheon. 9 However,<br />

Team CW will address some of the problems of maintaining core<br />

competences and skills in the guided weapons area and its success<br />

or otherwise will play a major part in determining the future for<br />

this key sector in the UK defence industrial base.<br />

Mission Systems<br />

29. Both the DIS and the <strong>DTS</strong> recognise the world-class standing<br />

of UK mission systems capability, especially in sensors. The MoD<br />

will work with industry to develop capabilities in this area,<br />

especially in those areas central to the ‘networked battlespace’.<br />

Over the long term, with TLCM in mind, there will an emphasis on<br />

developing “flexible, modular and open platform architectures.”<br />

This will be the key to “realising the affordable through life<br />

employment of fixed wing and unmanned platforms.” 10 It is also<br />

an important way to ensure that the MoD does not become<br />

dependent upon a single or limited number of vertically<br />

integrated prime contractors — a risk frequently noted in the DIS;<br />

and recognition that high-level equipment companies possess key<br />

integration skills.<br />

Space<br />

30. Both the <strong>DTS</strong> and the DIS recognise the increasing importance<br />

of space systems to the MoD’s future effectiveness. In particular,<br />

both documents assign a high priority to aspects of satellite<br />

telecommunications. However, it is disappointing that the <strong>DTS</strong><br />

makes no mention of the special arrangements required to deal<br />

with Private Finance Initiative programmes. While decrying the<br />

low level of industry R&D investment, the <strong>DTS</strong> fails to lay down<br />

guidelines for how R&D will be funded between the varying<br />

parties in a major PFI such as the Skynet 5 satellite<br />

telecommunications programme (£3bn). These need separately to<br />

specify the respective responsibilities of the MoD, the PFI<br />

contractor, other Skynet 5 contractors and industry. Unless this is<br />

better defined, the partners will be unclear as to the ownership<br />

of any resulting innovation. There is a body of best practice on<br />

this topic from the UK civil government sector that the MoD could<br />

draw upon as the basis for a more satisfactory approach. Until this<br />

issue is resolved industry may be reluctant to commit R&D funds.<br />

31. Surveillance from space is also recognised in the <strong>DTS</strong> as an<br />

area involving high priority technologies. The DIS identifies small<br />

satellites as an important element of MoD’s ISTAR solution —<br />

calling for “a sovereign ability to design, demonstrate and<br />

perhaps build.” 11 The <strong>DTS</strong> echoes this priority. Recognition of the<br />

benefits of an indigenous UK industry surveillance satellite<br />

capability is welcomed by industry after two decades in which<br />

especially French, but also German and Italian, industries have<br />

been the beneficiaries of major national programmes.<br />

Homeland Security<br />

32. Homeland Security is one area where the Government may be<br />

able to provide some encouragement for the UK defence<br />

industrial base. This market is growing rapidly world-wide but it<br />

is still not clear whether the UK Government has a co-ordinated<br />

policy to deal with this market and the industrial and technology<br />

base that would provides the products, services and integrated<br />

9 Aviation Week & Space Technology, 1 January 2007, p 62.<br />

10 <strong>DTS</strong> Section B2.<br />

11 DIS Section B8.45.<br />

The JSF generated much debate on technology transfer.<br />

systems. Developing such systems is not strictly the sole remit of<br />

the MoD or the Home Office. It requires cross-departmental coordination<br />

and sponsorship including other ministries such as<br />

Trade and Industry.<br />

33. It would be highly desirable for both Government and the UK<br />

Defence industry to create a joint approach to Homeland Security<br />

technology acquisition. Most of the major aerospace and defence<br />

companies are already participating in this market to a larger or<br />

smaller degree. There is also an emerging European Union<br />

research budget for this area. However, a clearer strategic<br />

direction from the Government to provide the UK with a safer<br />

environment, co-ordinated through one department (with the<br />

resources and budget to deliver) would give the UK Defence<br />

Industrial base an opportunity to grow despite the impending<br />

down-turn in some segments of the UK defence market.<br />

6.0 INTERNATIONAL COLLABORATION, MARKET<br />

ACCESS AND TECHNOLOGY TRANSFER<br />

34. The UK is unusual if not unique in its degree of openness both<br />

to overseas competition and to inward investment in the<br />

domestic defence industrial base. UK defence companies have<br />

also acquired an unparalleled position inside the US market.<br />

While noting the possibility that the latter may be at the expense<br />

of investment in the UK as well as expressing concern at the<br />

problems of technology transfer entailed in working with US<br />

partners, HMG appears to have made little progress in shifting US<br />

practice to the benefit of the UK customer or UK industry. The UK<br />

has undoubtedly benefited from inward investment, affording<br />

access to resources and technology that otherwise would have<br />

been acquired expensively from domestic resources, but, if the UK<br />

has benefited from overseas investments financially, UK<br />

companies may be limited in their ability to repatriate new<br />

technology for incorporation into new products developed onshore.<br />

This could have serious consequences for the long-term<br />

health of the UK defence industrial base. Equally, as the lure for<br />

inward investment is the buoyancy of the UK defence market and<br />

the relative size of its R&D investment, there is a danger that this<br />

investment will be vulnerable to any future contraction in<br />

defence budgets. While ownership is no longer as important in<br />

the defence sector as it once was, lack of national control over key<br />

capabilities increases our vulnerability to external events and<br />

decisions made by foreign governments and companies.<br />

35. This would be less of an issue if there had been sufficient<br />

progress to open both European markets and to improve the<br />

FEBRUARY 2007 9

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