Defense Industry Part 1 - An Introduction
The strength of a nation is measured primarily economically and to defend that economy a strong military is needed. Fundamental economics teaches you that the pillars of any transaction are land, labour and capital & consequently nations fight over land and deem it essential to protect their land. The price is determined by demand and supply of a goods or service and unless one sees a demand no capital will flow for that requirement. Even after it flows in, capital may fly away if demand is low and its never possible to have a balance. That is why you have governments and the fundamental Keynesian economic theory which talks of government intervention in the form of fiscal and monetary policy and kick starting a sector with capital infusion as necessities for a country to grow and be stable.
As the world has progressed, population has surged, distances have shrunk and life as we know it has changed in a myriad of ways. All this has been possible due to technology. And, development of technology needs time, effort and huge capital based on the segment of industry one is referring to. It needs R & D and while not all R&D has a clear problem to solve, many have an abstract objective to achieve – like let’s go to the moon for example. Why? Because it’s there!!!. And such R&D usually raises so many crazy questions, impossible situations, unknown environments that in the process of solving those challenges, the spin off benefits to society are humungous. The defence and aerospace segment of industry can never operate based on demand/supply in the conventional sense and essentially caters to a nation, its security, its wellbeing, its threats and that is one reason why globally governments have close relationships, control and involvement in these segments.
Here are a few examples of how defence and aerospace research resulted in spin off technologies/ products that we today use every day and take for granted. The Space Shuttle program alone had more than 100 technology spin offs across Medical, Transportation, Public Safety, Agriculture etc.
- The Sanitiser that ensured that the food the Astronauts consumed were free or bacteria etc.
- A device to grow cells in microgravity thus mimicking the way tissues form the body by creating healthier cell cultures.
- The Air purifier that keeps areas clean and infection free.
- Cardiopulmonary Resuscitation to help save lives during a cardiac arrest
- Eyeglasses that did not have screws on them
- Streamlined design of truck and bus cabs to improve aerodynamic efficiency and increased mileage
- Composite material that are super lightweight but stronger than even metal.
The benefits of these in our lives, the commercial value generated by way of various industries, jobs, saving lives etc cannot even be calculated by anybody. But then very often we as citizens do not even recognise the origin of many such benefits and generally take them for granted. Therefore, nations need their governments to fund and promote various dreams in the Defence & Aerospace (D&A) segment where apart from providing security, it creates a technology pool that cannot be measured. Dreams cannot have a profit motive, conventional thinking, working processes and above all one has more failures than success.
This is where citizens need to start understanding how the D&A eco-system functions especially in a country like India, given its history. Outcomes and opinions cannot be seen from a nationalistic or idealistic or even peacenik kind of glasses. It needs intelligent thought, understanding global geopolitics, global economic ecosystem and the patience of a monument because rarely are the outcomes measurable, logical, immediate and clear. If today USA is considered a technology leader across multiple fields the main reason is that for very dream like decision, like saying, let’s go to the moon, they ask – why not? In India we ask – why?
Recently we had the Indian Air Force land a fighter plane on the Yamuna expressway.
Now such kind of ideas need some forethought and planning for incorporating these ideas into designs and they will have some cost. But these cannot be questioned as many a layman is likely to do so.
This is why in most countries you have the major defence manufacturing investments done only by the government or in those cases where the private sector is involved, these are close trusting partnerships with substantial indirect investment by the government in terms of funding and committed purchases. This in turn leads to a situation where the selling company is always guided by the policies and strategies of their host country even in terms of what they can offer a purchasing country.
To a purchasing country, they may not give the latest, they may build in “blackmail” safeguards, Trojan horses and ultimately it is humongously expensive for a purchasing country to cover all risks. THIS is where the trust, relationships, country to country strategy and diplomatic imperatives kick in. Thus, potentially every purchase by a country from another can be sub optimum. More importantly this explains why such purchases are complex and never the most ideal. Every decision can easily be shown to be biased, imperfect, incorrect and based on hindsight can even be called a monumental mistake.
For instance, sitting in one meeting the argument was whether a specialised military vehicle should have tyres or tracks. One section felt that conventional wars are less likely and urban centric war on terrorism is more likely and hence vehicles must have tyres. Another section felt that specialised military vehicles are not needed for urban terrains and they needed tracks to navigate the marsh, desert and jungle when protecting the borders. Someone said that the requirement could be divided between the two and this meant that quantities would decrease, and costs go up substantially. Trust me the auditor, activist and the TRP driven journalist will crucify the decision makers whichever decision is taken based on what happens in the unknown future.
In short it must be understood that as mentioned earlier, defence purchases are not like soap, shampoo or even civilian aircraft. The spiders web is wide, unknown and every product quite different from the other. This blog is an attempt to declutter the complex web of Defence acquisitions so that the layman can better understand the challenges, even the truth when they read about the same in media & hear the shrill cacophony of any opposition on purchasing decisions.
The next part of this blog is at
https://rvasisht.blogspot.com/2020/02/defense-industry-part-2-devil-is-in.html
https://rvasisht.blogspot.com/2020/02/defense-industry-part-2-devil-is-in.html
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