Chair in Defence Economics - IHEDN

Defence companies play an important role in the national innovation system 

French defence companies play an important role in the national innovation system. In terms of workforce, they represent 11.3 % of the total number of companies involved in R&D, but they accounted for almost a quarter of the internal R&D expenditure (21.5 % of GERD) of all companies in 2009-2010. They employ 22 % of the researchers employed in French companies. Proportionally, they carry out more fundamental research and development than civil companies.

Finally, they play a significant role in the structuring of national R&D activities and in the redistribution of public funding (more than 13 % of their outsourced research is financed by public funds.

Technological duality

An analysis of the organisation of knowledge within 26 technical systems worldwide over the period 2010-2012 clearly reveals a hierarchy in their dual potential. In descending order, these technologies include: communication systems; different types of sensors; optics and image processing; and remote guidance systems.

More interestingly, this study tells us about the characteristics of this duality. Does it relate more to the system as a whole or to certain elements in particular? Does it allow us to explore a greater variety of technical avenues or, on the contrary, to intensify the exploitation of a dominant technological paradigm? Reproducing this type of analysis over several years would reveal trends that could be used not only by the defence industry to define its dualisation strategy, but also by the French Defence Procurement Agency (Direction Générale de l'Armement) and the French Defence Innovation Agency (Agence de l'Innovation de Défense) to determine the direction of their dual-use funding.

Using patent data to study knowledge production and innovation

Patent data is widely used in innovation economics. They contain a wealth of information on the identity of the applicant, their location and the knowledge contained in the innovation and the way in which it is produced. This information is validated by independent offices and qualifies the technological innovation activity of companies.

For technological duality, these data are all the more interesting because the question of secrecy for military reasons represents only one part of patenting strategies: secrecy can remain a strategy for protecting intellectual property as in any other field of activity. Indeed, if a technology is kept secret for military or sovereignty reasons, there is no reason to study its dual potential, since the technology is intended to remain secret. The application of tools exploiting the information contained in patents would therefore appear to be just as relevant for studying knowledge flows between the defence and civilian industries as it is for studying these flows between any other industries or geographical areas, for example.

Adapting defence companies to changes in the national innovation system

We have analysed changes in the national innovation system and their consequences for defence companies. Defence companies have had to cope with major changes in the science and technology system (increase in civilian R&D, greater role for companies, new role for patents, etc.), in the research funding system (development of funding instruments, decrease in direct funding, increase in the CIR, etc.) and, more generally, in their legislative and institutional environment.

These developments have modified the defence innovation system, but have not called into question the key role played by defence companies in the national innovation system. Whether in terms of inputs (R&D investment) or outputs (innovation, patent applications), defence companies still play a very important role. They have adapted by speeding up the development of dual technologies and opening up by collaborating with the civilian sector and foreign companies.