Blog | July 12, 2017

European Defense Cooperation in the Second Machine Age

BY: NICOLÒ DEBENEDETTI, ANDREA GILLI & MAURO GILLI

In the first week of June, the European Commission officially launched the European Defence Fund―a financial vehicle to support defense research and cooperation across European Union (EU) member states. This important step comes as no surprise: with the British “Brexit” referendum one year ago, and the American presidential election in November ushering a shift in U.S. foreign policy, continental European countries have felt growing concerns over NATO’s commitment to their defense. Recent geopolitical unrest has further reinforced these fears: from Russia’s conventional and hybrid threats to the rise of the Islamic State and overall instability both in the Balkans and in the Greater Middle East.

In this light, it is only natural that Europe wants to strengthen its defense cooperation to achieve more effective security, superior deterrence and wider global influence. The European Defence Fund can partially serve these goals by addressing the historical weakness of past European cooperation projects, namely the incapacity to generate economic efficiency through adequate scale (larger production runs decrease the unit cost of production). However, as we enter the Second Machine Age―the era of accelerating computer power, automation and increasing digital connectivity―three main aspects deserve attention in the context of growing geopolitical uncertainty surrounding Europe and the transatlantic alliance.

Navigating Current Realities

First, past multinational joint programs like the Tornado and the Eurofighter, often touted as signs of success, belong to history books. Though still touted as a sign of success, and pursued by national policymakers and bureaucrats in Brussels, large joint cooperative projects are unlikely to deliver the benefits they used to in the past; the growing complexity of military technology is making these programs progressively less likely to achieve their intended goals. It is becoming increasingly difficult for countries to pool together their technological expertise to deliver effective weapon systems.

Future large-scale programs, in other words, will need to have a single, capable prime contractor and individual European countries will have to accept unequal work-share agreements. Whether such a single prime contractor is a transnational European company such as Airbus (France, Spain and Germany), MBDA (France, Spain, Italy and Germany), Leonardo (Italy, UK and Poland) or Thales (France, UK and the Netherlands) or a national company able to allocate only subcontractor work abroad is a purely political decision. Work-sharing agreements that split systems integration responsibilities across many countries and companies are not going to work any longer.

Second, European countries have to leverage opportunities brought about by progress in software and processing power. The faster development cycles of payload (e.g. missiles and sensors), for instance, call for modular designs, common standards and harmonization of interfaces to enable rapid upgrade and modernization of existing platforms. So far, however, EU member states have resisted these measures, being more interested in restricting competition from foreign producers. Thus, in many realms, Europe needs market-based cooperation, not politically mandated cooperative projects. Similarly, EU countries should openly embrace the capabilities of non-traditional or commercial companies for the development of strategic capabilities, such as unmanned systems, cyber and satellites. In contrast, they have primarily tried to preserve the position of their national champions: one of the many results is that no EU country has been able to develop a single medium-altitude, long-endurance drone yet. All programs, awarded to EU heavyweights, have in fact failed thus far (see Gilli and Gilli’s chapter in the forthcoming Oxford Handbook of European Armed Forces).

Third, commercial technologies are driving innovation not only in the civilian but also in the military realm thanks to the opportunities offered by machine learning, big data and robotics. To reap the benefits of this transition, European countries must make a concerted effort to enable the exploitation of commercial technologies. To this end, European countries should keep in mind the challenges that lie ahead. For example, current regulations on Intellectual Property Rights are based on the premise that defense technology is a product of government funding. Thus, governments retain some rights over technology. Commercial companies or civil research labs are legitimately concerned that by entering the defense business, these regulations may harm their long-term economic interests. Moreover, both the defense acquisition regulations and the military procurement workforce are currently unfit for dealing with commercial technology. Innovative commercial companies do not work along the lengthy and rigid defense procurement time cycles and do not find appealing working with organizations that espouse significant compliance demands. Similarly, while the current defense procurement workforce is specialized in dealing with the defense acquisition process, it is less suited to deal with and respond to the more agile world of commercial companies. As such, appropriate reforms are needed. Finally, the potential benefits from exploiting commercial technologies will be larger if European countries pursue a concerted and harmonized approach.

Change in Step with Technology

Today, European countries require a broader range, and thus, more expensive and complex portfolio of capabilities to address the newer and broader set of threats with which they are confronted. The European Defence Fund makes several important and useful proposals in this respect. However, the current wave of technological change is undermining one of its assumptions: the centrality of joint multinational armament projects must give way to adopting a more flexible approach to technological advances. If European countries want to enhance their military capabilities, it will require a paradigm shift in the way Europe perceives and handles technology, industry and procurement. It is a daunting prospect but one that is inevitable if Europe wants to afford the broader set of capabilities and closer degree of collaboration that a bigger security role requires.

Nicolò Debenedetti is President of Aleph-Analisi Strategiche, Bocconi University in Milan. Andrea Gilli is post-doctoral fellow at the Belfer Center for Science and International Affairs of Harvard University, Cambridge, MA. Mauro Gilli is Senior Researcher in Military Technology and International Security at the Center for Security Studies of ETH, Zurich. This article summarizes and updates the recent Brief for the European Union Institute for Security Studies.

The views expressed in this post reflect those of the author and not that of the EastWest Institute.