Report on the conference organised by the Chair in Defence Economics :
«RESEARCH, INNOVATION AND DEFENCE»
20 March 2019 at the National Assembly
After a welcome from Didier Baichère (Member of Parliament for Yvelines, member of the National Defence and Armed Forces Committee) and’Olivier Martin (Chairman of the Steering Committee of the Chair in Defence Economics), Emmanuel Chiva introduced the conference. After highlighting the evolution of the players in the defence innovation environment, Emmanuel Chiva recalls the the need for innovation and the the centrality of innovation in French defence policy. It also describes the background to the creation of the Defence Innovation Agency (AID) and the need to creating an ecosystem conducive to the emergence of defence innovation ranging from start-ups to SMEs and large companies, from research laboratories to manufacturers, from the civilian to the military. Emmanuel Chiva concluded his speech by emphasising that innovation is a risky process and that we need to change the culture of risk management.
ROUND TABLE 1: HOW CAN INNOVATION BE DEVELOPED EFFECTIVELY?
The first round table, on the theme of «How to ensure the effective emergence of innovation», will be chaired by Jean Belin, holder of the Chair in Defence Economics, with the participation of IGA François Mestre (Direction Générale de l'Armement), Stéphane Cueille (Safran & CIDEF), François Chopard (Starburst) and Emmanuel Sabonnadière (Commissariat à l'Energie Atomique).
Jean Belin highlights the changes in the innovation system since the 1980s. From the 1950s to the 1980s, the state and defence largely controlled the innovation system (share of funding, lighter industrial structure, simple innovation processes). Since the 1980s, the transition to a knowledge-based economy has led to a transformation in the players and processes involved in funding research, with more «civilian» R&D and a greater prevalence of business. This round table highlights the changes in the innovation system and the adaptation of the defence sector: opening up to the civilian sector, new methods of cooperation and coordination, and new funding practices.
François Mestre IGA explains how DGA sees innovation in the DTIB. The defence industry is first and foremost a military capability. The DTIB is then a complete ecosystem to meet the needs expressed by the Armed Forces. It is made up of public bodies, laboratories and companies, with some major prime contractors and a vast network of subcontractors. This organisation is not the result of chance, but rather the result of a long-standing strategy. ongoing investment policy.
François Mestre presents DGA's vision of innovation. He reminds us that the DGA is mainly made up of engineers and technicians. Innovation must enable the technological advantage which is an operational differentiator, but also in international competition. DGA also sees innovation in the DTIB as an economic challenge. As the size of the domestic market is not sufficient to maintain a complete DTIB, access to other markets is essential to maintain our industrial base over the long term. Prescribed innovation remains essential in sectors where the size of the accessible market does not allow the associated investments to be amortised.
Stéphane Cueille explains how major defence contractors organise themselves to bring innovation to the fore and make it more effective. Overall, the major prime contractors are organised around 4 pillars. The first pillar is the knowledge of the value created for the user. The second pillar consists of connection with the ecosystem innovation. The third pillar is the taking action. Finally, the fourth pillar is to developing technological fundamentals.
Links with potential external partners are both structured and opportunistic. It is important to developing a culture of openness outwards to seize opportunities. The major contractors have scientific councils and scientific partnerships, particularly with start-ups. One of the difficulties is to adapting to the cycle, It is important to capture short-cycle technologies and breakthroughs, and then incorporate them rapidly. We need to capture short-cycle technologies and breakthroughs, and then incorporate them rapidly. It is therefore necessary to put in place agile methods and further develop innovation through use, while ensuring that projects are viable.
François Chopard begins by explaining the objectives and operation of a start-up incubator/accelerator. Starburst is an incubator entirely dedicated to start-ups in the aeronautics, defence and space sector. It is a global player, with offices in Paris, Munich, Montreal, Los Angeles, San Francisco and Singapore. The role of an incubator is to help start-ups emerge and help them grow in terms of strategy and financing. Starburst acts between the seed phase and the phase of demonstrating market potential.
François Chopard recalls the model of start-ups and the venture capital (venture capital). The main principles should be followed. Firstly, milestones should be set to ensure that the objectives have been achieved and that the project can continue. Next, you need to accept a failure rate Of the 10 projects, 7 will probably be stopped. We also need to accept competition and include competing projects in the 10 projects. Finally, we need to find funding.
To encourage start-ups to invest in defence, the question of funding is a major one. The US and France have very different defence budgets. The Small Business Innovation Research (SBIR) from the DOD allocates 3% of the money given to large groups to SMEs. We are also witnessing a paradigm shift as venture capitalists The Americans no longer have confidence in the Pentagon to develop the weapons of the future and are investing in this field with the prospect of seeing space and defence giants emerge over the next 20 years.
Emmanuel Sabonnadière explains how to develop synergy between civilian and military innovation, using the example of the LETI. CEA-LETI was created by General de Gaulle to monitor and anticipate developments in microelectronics. LETI has no commercial focus, which means it is always at the cutting edge of technology. LETI has been working with the defence sector for a long time and acts as a link between academic partners, industry and the DGA.
Several defence innovations have had civilian applications, particularly in the field of sensors. France is at the forefront of certain technologies, such as infra-red, but we don't necessarily create start-ups for fear that knowledge will be diluted and captured. At LETI, 2,000 researchers provide the foundation for technology transfer and links have been forged with many companies, including the GAFAMs.
Civilian innovations can also serve military needs. For example, the nano 2022 plan is a civilian plan that will enable the launch of «on-board artificial intelligence». Electronics already account for 12% of a vehicle's added value, and will account for 37% by 2027-2030. In Europe, we have what it takes to make the technological difference with the rest of the world.
Speech by Pierre Delsaux
Pierre Delsaux reminds us of the need to meet the challenges of a building Defence Europe. It highlights the inefficiency in the allocation of budgetary resources due to this «non-Europe of defence» and underlines the the need for cooperation at European level, particularly in R&D activities. To encourage this cooperation, the European Commission has introduced two policy instruments which are currently being tested. The first of these, preparatory action for research (the test phase of which ends at the end of the year) is used to fund cooperation projects (at least 3 European countries must be represented) in the field of defence research. The second instrument, the development fund, The European Defence Agency (EDA), for its part, has been allocated a budget of 500 million euros for two years, enabling the development of joint projects between several European Union member states in the field of defence. The aim of these two components is to create a leverage effect on the development and emergence of European projects in order to enable and strengthen cooperation between EU Member States.
ROUND TABLE 2: HOW TO MAKE EFFECTIVE USE OF INNOVATION IN THE DEFENCE SYSTEM
The second round table, on the theme of «How to make effective use of innovation in the defence system», was chaired by Valérie Mérindol, professor at Paris Business School, with the participation of General Philippe Hirtzig (Armed Forces General Staff), IGA François Pintart (Directorate General of Armaments), Eric Papin (Naval Group) and Dominique Levent (Renault Group).
Valérie Mérindol introduced the round table by outlining the three major challenges facing major defence companies if they are to remain leaders in their field. These three challenges are interlinked and need to be considered in a systemic way. Firstly, the way in which projects are managed has changed considerably. Today, we have to think of innovation in terms of interaction with users and work with talented and complementary players, sometimes moving away from the notion of a sector. Secondly, we need to be able to’harnessing innovation. We need to invent new business models and be astute in the way we exploit innovations. Thirdly, there is the challenge of transforming businesses. In particular, we need to change the way involve employees, This sometimes requires a major organisational transformation.
In defence, two major players will have to renew and evolve to work together and meet these challenges. Firstly, the State, via the Ministry of the Armed Forces, as customer, funder and regulator. Secondly, the major manufacturers, who remain fundamental players in the architecture of major technological programmes, for which it is essential to maintain innovation over a long and very long period of time. top down while rapidly integrating more short-term-oriented innovations into a more long-term approach. bottom up.
For the general Philippe Hirtzig, Innovation is the means to respond to the triptych peace-crisis-war. Firstly, there is the peacetime challenge, which is a challenge of’social attractiveness and we need to help the military to see themselves as part of an innovative and prosperous organisation, with no significant differences from the civilian sector in particular. The second issue, in times of crisis, is that of the’effectiveness of support and logistics in particular. This is the key to victory, and we need to develop technologies to regenerate the potential of our equipment. The third challenge, in wartime, is the opponent domination. The latter innovates and has easier access to certain technologies.
In addition, innovation must be resilient in terms of success in combat. Technology must also be adapted to doctrine, organisation, processes and know-how to ensure operational dominance. Innovation must not be reduced to technology, and the human factor is essential if we are to gain a moral and technical advantage over our adversaries. Last but not least, soldiers innovate in the field and they must be integrated into the innovation process. We need to encourage field experiments and develop a a culture of innovation, This sometimes means accepting failure.
François Pintart IGA recalls the French acquisition model: spending at the right price the equipment needed by the armed forces from the public purse, against a backdrop of constraints on the resources allocated to defence. This has produced convincing results, including a extremely rigid innovation model with a strong aversion to risk and failure. The latest ministerial instruction on armament operations (FTI) should help to overcome this aversion to risk and reduce the time taken to draw up contracts.
To achieve this, we need to be as far upstream as possible, bringing players together to put in place acquisition strategies and contractual approaches appropriate to the purpose, and to avoid applying a single innovation management model, while maintaining an appropriate delivery timetable. Secondly, the relationship between the State and industry needs to be as balanced as possible: a shared perception of the risks to be taken between the State and industry, so that there are balanced penalties for failure to innovate. This is already reflected in concrete terms in the following projects Man Machine Teaming to introduce artificial intelligence into the piloting of combat aircraft, and the inclusion of incremental innovation in the equipment for the Scorpion programme.
Éric Papin explains that, for Naval Group, innovation means transforming new ideas, Some of these are at a fairly low level of maturity, but we are able to turn them into performances that meet our customers' needs. Visit operational superiority in combat is the primary objective. Today, demand is no longer fixed in time, but evolves very quickly, and contractual models that are too rigid make it difficult to achieve the objective. We also innovate to improve the industrial competitiveness These include lower costs, fewer production details and higher quality.
Innovation within the Group is currently focused on a number of areas. Firstly, naval systems are going to operate collectively, so we need to imagine a modular naval force with open system architectures. Secondly, the naval force, which has the advantage of detection, has the capacity to decide faster than others. Thirdly, you need to master your energy consumption and its maintenance cycles. To be operational, you need an intelligent vessel, with a data centre which has the capacity to interconnect systems, while offering good living conditions for sailors. The industrial integrator must therefore adapt to this new situation by transforming its way of doing things, in particular through the’open innovation, to seize all the opportunities offered by innovation ecosystems.
Dominique Levent explains how the Renault group trains its staff in innovation. Historically, the group has gone through a very long period of rigid innovation processes in an attempt to produce impeccable products. In doing so, we divided the business lines and lost collective solidarity with regard to the projects as a whole. Restoring creative capacities of the Group and in particular that of its employees is a prerequisite.
There can be no innovation without new knowledge to integrate, which requires understanding the issues, sometimes by challenging existing mentalities. This is a structuring challenge at Renault. From à la carte training are given, depending on the difficulties an employee wants to tackle. We then connect people with the right experts, for example using a skills marketplace, The aim is to make it easier for people to get in touch with each other. For high-stakes projects, coaching project managers is necessary, but so is a cultural change within the group.
We used to have a very sequential process for research, but this now leads to obstacles that are difficult to overcome. This means restoring short loops, involving all stakeholders in an idea, and not hesitating to abandon or redirect projects.
CLOSING ADDRESS: FLOENCE PARLY MINISTER FOR THE ARMED FORCES
Florence Parly recalls the’accelerating innovation cycles and the speed of their emergence over the last decade. The unpredictability that characterises today's strategic environment means that we need to be aware of the risks involved.’adapting to new threats as already stated in the 2017 Strategic Review. From this point of view, innovation is vital and necessary in maintaining the operational superiority of the French Armed Forces and underlines the changing role of the State and the persistence of its commitment. This commitment is achieved through a national policy of innovation in making the most of the civil-military duality. Thinking about defence innovation and encouraging its emergence requires an «innovation ecosystem» in which academics, industry, SMEs, civilians and the military come together. This ecosystem makes it possible to discern the needs to which technological innovation will respond.
