Sharing Approaches: Innovation In Funding For Security And Defence

Here’s an idea: why not allow privately-funded services and assets provided to defence and security to be temporarily used by third parties when not needed by military forces? The conditions under which this took place would have to be strict and specific, of course, but this could offer a number of benefits for all concerned.

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Innovation for defence usually involves new technologies or new capabilities and sometimes it concerns improvements in the organization or leadership. Funding is almost never subject of innovation, particularly not in relation to capability development. However, funding is an important aspect of incorporating defence activities in the economy. An important reason for innovation in the area of funding is the continued decline of government budgets, which affects technology and capability development programmes in particular.

Private investors and banks are certainly interested in participating in defence and security related projects, just like they are in other sectors of the economy. There are vast amounts of money available in the financial market and fund managers are searching continuously for investment opportunities. The need for a reasonable return on investment and a limited risk are however important factors in addition to military needs and technical merit. This can be made possible when dual use and export opportunities are included as key elements in a proposition. Not all banks and investors are willing to participate in defence and security projects. Concerns about perceived image damage when participating in defence-related activities sometimes can be mitigated by a strict code of conduct against controversial weapons.

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Jan Wind, a retired Netherlands Navy Captain who managed many major capability development projects, is the founder WISER Consultancy, which specialises in defence and security technology funding. He is also president of the Federation of European Defence Technology Associations (EDTA).

An article describing the results of the WISER Consultancy research was published recently in the Security Europe magazine. See www.securityeurope.info under Euro-Views or download it in english or Dutch language here.