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18 October 2016

Innovation in the defence industry

Is it industry or the the MOD that is too old to innovate?

There is uproar in the upper echelons of the defence industry. Last month Tony Douglas, CEO of the government’s Defence Equipment and Support group (DE&S) reportedly berated senior defence industry executives for all being over forty-five, implying that they are too old to be innovative. Ironically, in my previous blog ‘Brave new world for defence industry’ I highlighted that it is the Government’s cost cutting that is jeopardising long term innovation. So is Mr Douglas’ criticism fair? 

There are three fundamental flaws with the suggestion that defence industry executives are too old to innovate. Firstly, his assembled audience was senior managers – a demographic that is likely to be older. I am firm believer in the importance of strong leadership and management and therefore ascribe a premium to companies with talented teams at the helm. Whilst age is not a precursor to management ability, the two are generally coincidental by virtue of experience. The attendees are likely to manage the inventors of new technology rather than invent it themselves. It is also worth noting that often engineers and scientists have no desire to ‘give up the day job’ and enter the world of corporate management. BAE Systems has its own scientific career stream to afford such individuals career progression without them following the conventional path upwards into management.

Secondly, innovation is generally driven by the culture within a company or industry, rather than by individuals. Age is therefore no barrier to this. Even if older senior executives lack the technological know-how to develop new products they can still set the conditions for those that they manage to do so. Conversely management can stifle innovation if it is too prescriptive and does not allow time and space for employees to pursue that which is ‘interesting’.

Thirdly and most importantly, the biannual Defence and Security Event International (DSEI) held in London’s Excel centre is demonstrable proof that the defence industry remains innovative. When I visited last year there was no shortage of pioneering, futuristic and occasionally times curious products. Whether or not there is a market for these products though is a different matter entirely. With an already constrained defence budget, suffering further from the devaluation of our currency, the MOD’s appetite to purchase new equipment seems limited (see my blog ‘Do tanks have a future?’). It therefore strikes me that the defence industry would be within its rights to turn Mr Douglas’ comments back onto himself and challenge whether the people managing procurement in the MOD are agile and innovative enough to supply the new solutions the military might need in future warfare?

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