Governments have traditionally played a foundational role in the development of research and innovation eco-systems around the world. The role of Government as a risk-taker and a direct enabler of innovation has been written up by a number of influential commentators and in recent times, by scholars such as Mariana Mazzucato and Michael Porter, among others.
Prof. Mazzucato of UCL and a influential scholar of European Innovation has talked about the Entrepreneurial State and Mission Economy as metaphors for government’s role in innovation as “investors of the first resort” bringing ground breaking innovations such as the computers, semiconductors, the Internet, GPS, jet engines, genetic machines, and reusable civilian spacecrafts to life. She charges government to think bigger and mobilize resources in a way that is as bold and inspirational as the moon landing in the 1960s.
In the United States, as well, the defense establishment has played an important role in engaging private sector and academic R&D in solving strategic problems. Defense spending on R&D accounts for more than 50% of all government funded R&D and dwarfs the amount spent on other prominent innovation policy tools. Yale Professor Paul Bracken described the US Department of Defense (DOD) as the “mother of all venture capital firms” in that it provided large sums of relatively no strings attached money to source innovation from outside of the defense establishment.
The exchange of resources and knowledge between the defense and civilian sectors is a bi-directional, not unidirectional, exchange leading to benefits for all parties:
– The defense R&D establishment benefits from tapping vast intellectual talent and capability in the civilian sector that may otherwise be unavailable to address tough defense and strategic challenges;
– The civilian S&T benefits from working with and on defense problems leading to critical capacity building – both technical and financial – of the corporate entities; and
– The national economy benefits from the potential civilian applications of the high-end capability residing within defense sector through development of dual-use technology or spinning off of entire new technologies and industries.
This constitutes a “win-win” scenario for all as it makes available resources and expertise not otherwise available to the other party.
The 12th International Defence Exhibition and Seminar (IDEAS), organised by the Defence Export Promotion Organization (DEPO) under the patronage of the MoDP, from 19th to 22nd November presents an opportunity for showcasing the possibilities and opportunities in defense R&D that could be addressed through and in collaboration with civilian S&T and vice versa. For Pakistan, such a partnership between defense R&D and civilian S&T acquires even more importance for three reasons:
First, Pakistan’s current precarious economic situation is partly due to a gradual erosion of the competitiveness of its (low value-added) exports that can only be addressed through technology upgradation of its industry. Why is it that a country that is able to produce batteries for use in F16s does not have a single civilian supplier of high-performance batteries? The only place in Pakistan where such high-technology – with multifarious dual-use and commercial applications – exists is the defense R&D establishment and this must be made available for commercial exploitation.
Second, Pakistan’s defense R&D establishment is also in a dire need for fresh ideas and access to scientific and technological capability which may reside outside of it. Pakistan increasingly finds itself on the short end of an arms race with its traditional foe where the technological distance between the two countries has widened considerably in recent years and this needs fresh thinking and out-of-the-box ideas. These fresh ideas are likely to come from outside the traditional establishment. Pakistan does not fully exploit the true potential of its population when it fails to leverage the latter.
Finally, increasing cooperation and dependence on outside (civilian) suppliers will also enable greater efficiency, innovation, and export competitiveness for Pakistan’s defense exports as well. The intermixing of ideas leads to capacity building and innovation within the private sector (and academia) and results in dual-use and purely commercial products and ventures to be spun-out. If nothing else was important, purposefully building capacity of our civilian contractors so they can do better in the global markets is a desirable objective in its own right.
A number of countries have in recent years opened up their defense sector to greater civilian collaborations and competition, including China (critical stage ‘guanjian jieduan ????’ of defense industrialization through the “four mechanisms” ‘sige jizhi ????’ of “competition, evaluation, supervision and encouragement”), India (“Make in India”), and Turkiye, among others. There is clearly a conscious attempt to benefit from this symbiosis with encouraging results.
Similar reforms in Pakistan will require a fundamental re-thinking of a civil-military R&D paradigm. Appreciably, IDEAS-2024 Seminar being held on 21st November, 2024 themed “Pakistan’s defence production potential – challenges, opportunities and way forward”, is likely to lead to an interesting discourse. There is truly a need for a ‘National Framework’ for Defense – University – Industry Collaboration in R&D that will guide thinking, policy, and efforts of relevant entities – both civil and military – towards the desirable objectives in an organic, gradual, and phased manner. Even though implementation may vary, initially, the mere presence of such a framework on the “books” will open possibilities and encourage innovative mindsets. This will empower change agents within Tri-Services and strategic organisations and enable them to push the boundaries of what is possible.
This framework may be based on several principles or critical elements:
First, the framework must identify and build new organizational forms and non-traditional models of collaboration – flexible, nimble, and entrepreneurial – between military and civilian stakeholders.
Second, the framework must also establish wider and more robust trust mechanisms for to credibly engage in defense related R&D. This could be done through a mix of measures – limited surveillance and oversight, compartmentalization of work, effective access management, etc.
Third, the framework must clearly identify avenues where R&D and production shall happen within each of these respective sectors. For instance, while final assembly may happen at defense production units, systems and sub-system level is outsourced to private players.
Fourth, the defense buyer must take on the entire cost of R&D rather than shifting the entire risk and significant cost onto the private provider. This will enable investment in R&D within the private sector and will help trigger innovations in other things they do and also make indigenous development a true national priority.
Fifth, there is a need to find and develop financial space for meaningful partnerships between defense, strategic, and private sector enterprises. This may include ring fenced funding and/or offset funds to invest in local R&D capacity.
Sixth, mechanisms need to be developed to spin-off technological capability currently residing within the defense R&D establishment to private players, perhaps, against a royalty and enabling them to tap into commercial markets and enhance the high technology content of Pakistan’s exports.
Seventh, we must in this country, if we want to create globally competitive industry, move away from the culture of permissions and permits and allow ingenuity and the profit motive of the entrepreneurs to drive innovation and exports forward.
Finally, special initiatives and national programmes – such as National EV, Next Generation Fighter, Blue Economy, or Export Competitiveness – aimed at addressing challenging national problems can provide a perfect burning platform for spin-offs and spin-ons from the defense and strategic sectors.
A pilot project comprising a group of 8-10 technologies / products could be used a test case for spin-off of defense/strategic R&D and capability for civilian sector. A similar initiative to spin-on technologies and capabilities from within the private sector for use in the defense sector may also be attempted.
In the depths of today’s economic crisis, Pakistan has a unique opportunity to focus on building its S&T infrastructure for which the basic ingredients are already in place. It does not require a tremendous feat of imagination – only clear-headed planning and patient execution – to create a national effort to build upon existing capabilities and expand the technological opportunity set for Pakistan.
A proactive symbiotic partnership between defense R&D establishment and elements of civilian S&T infrastructure – universities, thinktanks, private players, startups, etc. – will go a long way in expanding this technological opportunity set and thus advancing Pakistan national and economic security in the long run.
MoDP/DEPO can take the lead in transforming this opportunity into real results on the ground.
