Leading edge: key drivers of defence innovation and the future of operational advantage

International Institute for Strategic Studies

Summary: Technological innovation is at the core of inter-state strategic competition. The capacity of nations to successfully develop, integrate and use emerging and disruptive technologies (EDTs) in military applications is a critical element of and metric in the global competition for power. If innovation has always been a feature of military competition, the rapid and encompassing progress in a range of emerging and disruptive technologies and a shifting global balance of power are putting pressure on defence establishments across the world to adapt and integrate new technologies. Despite profound differences in strategic culture, leading military powers are increasingly focused on how to preserve or create a leading technological edge and an operational advantage against potential adversaries.

What are the drivers of defence innovation at this time of renewed great-power competition and how do states prioritise among them? How does defence innovation translate into operational advantage? What does defence innovation take to be efficient and how can it be measured as such? Through the empirical analysis of innovation efforts in five countries – China, France, Germany, the United Kingdom and the United States – this paper identifies four main drivers of defence innovation and offers a better understanding of how these countries prioritise among them:

1. threat and vulnerability perceptions,
2. convergence in political, military and societal support for innovation,
3. innovation organisation and governance, and
4. investment in innovation.

While it is premature to assess the efficiency of the five national defence-innovation efforts discussed here, the common traits and challenges hold wider relevance. Five main takeaways are particularly relevant. 

Purpose and outcomes

Clarity is needed around the nature, scope and structure of the process of defence innovation, including in relation to the expectations about its strategic outcomes. Political and military leaders do not necessarily adopt the newest technologies, despite their commercial availability, or use them in innovative ways that enhance their military effectiveness and operational advantage. Equally, defence innovation is not limited to the use of the newest and most advanced technologies. Rather, varying cultural, strategic and historical contexts shape states’ perceptions of how new technologies can be integrated into defence and new operational concepts developed.

Building a leading edge in defence is not just about the adoption of emerging and disruptive technologies from the civil sector. Nor does this adoption automatically predetermine desirable strategic outcomes in the shape of operational advantage and strategic competitiveness. Defence innovation implies a deliberate technological, organisational and doctrinal change away from the status quo, aimed at responding to a new strategic environment and achieving strategic advantage and competitiveness, including but not limited to warfighting. This includes creating as well as avoiding technological surprise. The inherent adjustment implicit in defence innovation includes redesigning and implementing a new relationship between defence establishments and societies, particularly expert communities in private industry and academia.

Threat and vulnerability assessments

For great powers like the US and China, threat perceptions are a key driver of innovation, whereas in the case of middle powers, closing domestic vulnerabilities takes precedence in shaping defence-innovation efforts. For the US and China, defence innovation is about a new theory of victory based on the disruptive use of technology to deliver a strategic advantage against and dominance over great power rivals. For middle powers like France and the UK, defence innovation is a catalyst for the preservation of full spectrum deployable combat power, a hedge against the negative demographic and budgetary trends impacting defence or a coping mechanism for the loss of ‘combat mass’. Concerns over status are also prominent, as demonstrated by the UK’s recent emphasis on ‘global Britain’ and France’s warning of a risk of ‘strategic downgrading’ and emphasis on a balanced approach between innovation and regulation that increases rather than hampers European strategic competitiveness. While also qualifying as a middle power, Germany differs from the UK and France in that it considers defence innovation through the prism of norms for the use of new technologies and multilateral cooperation and only indirectly focuses on the aspect of generating military advantage. 

Political, military and societal support for innovation

Deliberate actions to develop and sustain wide political, military and societal support are important for the sustainability of defence-innovation efforts, which may be affected by political instability and societal opposition. By virtue of its political regime, ensuring top-down and civil–military congruence of priorities for defence innovation is more straightforward in China, though this does not automatically ensure qualitative political steering of innovation efforts. By contrast, in democratic regimes, political, military and societal support for defence innovation is built through domestic and political debate, such as in France, the US and the UK. The lack of convergent political and societal support in Germany is a major stumbling block for its defence-innovation plans. Cultural, political and societal barriers to innovation can be just as important as intra-military and technological ones.

Innovation organisation and governance

The US is a benchmark for defence innovation and military power for China and for France, Germany and the UK, albeit for different reasons. The American and Chinese innovation systems are the most encompassing and structured among the five nations. The opaqueness of the Chinese innovation system is neither a proof of lack of challenges nor a measure of its superior efficiency, but a reminder of the need to develop new qualitative techniques and tools to assess it. The British, French and German innovation systems vary in how structured and embedded in the defence enterprise they are. However, they encounter similar challenges in rapidly scaling innovation solutions and managing failed innovation. Furthermore, they lack direct channels, planning, partners at appropriate levels of political decision-making and agency to actively promote their innovation solutions to facilitate their transition to the defence enterprise or the market. Human-talent acquisition, retention and upskilling to feed defence-innovation systems is a strategic challenge. None of the countries analysed here has integrated innovation into military education or strategies to attract new talent, and planning for how best to use human resources in the defence-innovation chain is still limited. China’s practices of acquisition-hire and attractive fellowship packages are an increasingly influential tool for attracting foreign talent. 

Investment in innovation

Beyond the level of investment in research and development (R&D), the mix between incremental and disruptive innovation, as well as the disaggregation of defence R&D investment, are important for a more accurate assessment of the efficiency of innovation investment. Very little information is available about how China prioritises investments between incremental and disruptive innovation. However, the US invests approximately 80% in incremental innovation linked to ongoing programmes of record and 20% in disruptive innovation, while 40% of its innovation agencies’ spending is channelled towards academia. Meanwhile, European states are driven by the need to fill enduring capability gaps, thus investing many of their R&D funds in incremental innovation linked to programmes of record managed in partnership with traditional defence primers.

Source: https://www.iiss.org/blogs/research-paper/2021/11/key-drivers-of-defence–innovation-and-the-future–of-operational-advantage