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Between market forces and knowledge based motives: the governance of defence innovation in the UK

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Abstract

The purpose of this contribution is to examine the evolutionary transformations that have characterised the UK defence innovation system since the mid 1980s. It focuses on the central and challenging issue faced by the Ministry of Defence (MoD) in implementing effective governance mechanisms emerging from the continuous trade-off between short-term market driven measures motivated by efficiency arguments, and more long term and relational considerations in terms of knowledge economics. Furthermore, in terms of technology transfer, this evolution has been accompanied by a gradual shift from an initial logic of spin-off to society expected from government driven military projects, to a logic of spin-in where the main concern of the military sector is to broaden its industrial and R&D base.

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Notes

  1. The National Audit Office is a Government independent institution whose role is to audit the financial statements of all government departments and agencies. Its aim is to promote the proper conduct of public business and beneficial change in the provision of public services.

  2. Military off the shelf (MOTS) refers to products and services already developed by a commercial entity for use in military equipment. The motivation for using MOTS components is that they reduce overall development time and costs because the components can be purchased from external sources instead of being developed from scratch. A MOTS strategy can however have an ambivalent impact: overall cost and development time can definitely be reduced, but often at the cost of an increase in component integration work and a dependancy on external suppliers.

  3. Through Life Management, a cornerstone of the Smart Procurement Process refers to the integrated management of the life-cycle of military capability or equipment, from identification of the need to its disposal.

  4. Incremental Acquisition is defined as a procurement strategy which aims to adopt a progressive building up of a required capability or equipment, thereby reducing the risk inherent in introducing large one step improvements and allowing systems to incorporate evolving technology as it becomes available.

  5. As underlined by the NAO (2001) “This principle states that the basis of non-competitive pricing should be one of Equality of Information between contractors up to the time of price fixing. The phrase Equality of Information has no precise definition. It is presumed that each party divulges information that is relevant to the agreement of a fair and reasonable price so that, when final judgment on pricing takes place, both parties are in the same position as each other”.

  6. Towers of Excellence are key partnering projects for directing resources into priority areas of technology research identified by the Ministry of Defence and UK defence industry. The ToE model aims to develop world class defence technology capabilities in selected areas through co-operation between organisations and facilitate technology transfer between MOD’s research programme and industry.

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Acknowledgments

This contribution is based on a study carried out by the BETA (Bureau d’Économie Théorique et Appliquée), a research laboratory of the University Louis Pasteur of Strasbourg, for the Observatoire Economique de la Défense (OED). The authors thank Dr Lucy Stojak for her help in polishing the text.

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Correspondence to Arman Avadikyan.

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Avadikyan, A., Cohendet, P. Between market forces and knowledge based motives: the governance of defence innovation in the UK. J Technol Transf 34, 490–504 (2009). https://doi.org/10.1007/s10961-008-9102-2

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