June 21, 2018

Despite successive governments’ endorsement of the 2.5% target, R&D expenditure in the UK is around 1.7% of GDP – the same as it was 25 years ago. That places the UK 11th in the EU. Most ­– two-thirds – of the UK’s spend comes from the private sector, but of the state investment, 40% comes from the Ministry of Defence.

Adjusted for inflation, however, defence R&D has fallen by 61% since 1990. Unsurprisingly, that decline in investment coincided with the Soviet Union’s demise. But as defence is the first duty of government, making sure the armed forces are able to fight the next war, rather than refight the last, means investing heavily in R&D.

In The Entrepreneurial State (2013), economist Mariana Mazzucato advocates more government spending on R&D generally. She debunks the belief in the ‘small state’ and the innate superiority of lightly regulated private enterprise – something she believes that the facts of technological innovation in the US simply do not bear out.

Given the urgency and complexity of both the SDI and radar programmes it was wholly beyond private R&D

It is, though, a powerful American myth, celebrated even in that long-running encomium to the Democratic Party, The West Wing. In Episode 55, 100,000 Aeroplanes, President Bartlett gets a “legacy idea”: just as Kennedy put a man on the Moon, the government will cure cancer. This is the ensuing discussion between two of the President’s advisers, Sam Seaborn and Joey Lucas:

Joey: Federal government shouldn’t be directing scientific research.

Sam: Why?

Joey: Because you stink at it. If it was up to the NIH [National Institutes of Health] to cure polio through a centrally directed program instead of an independent investigator driven discovery, you’d have the best iron lung in the world, but not a polio vaccine.

Sam: When did you get an M.D.?

Joey: I was just quoting Samuel Broder.

Sam: Who’s he?

Joey: The former director of the National Cancer Institute.

Joey, the audience is supposed to conclude, is presenting ‘the American way’ – the private sector innovates, and the government should get out of the way.

But then something contrary happens. Sam Seaborn’s Democratic high-mindedness (and remarkable recall of historical defence statistics), preaches that presidential overreaching is both good and effective:

“In 1940 our armed forces weren’t among the 12 most formidable in the world, but obviously we were going to fight a big war. And Roosevelt said the US would produce 50,000 planes in the next four years. Everyone thought it was a joke and it was, because we produced 100,000 planes. Gave our armed forces an armada which would block out the sun.”

Conveniently, Roosevelt was a Democrat. Seaborn could have chosen a much more recent triumph – and of actual R&D rather than of production.

Credit: Lockheed Martin

The US Strategic Defence Initiative of the 1980s – a space-based missile defence system that would intercept all incoming Russian intercontinental ballistic missiles (“Star Wars” as it was dubbed) – can trace its origins to the Second World War, when the US Army began thinking of a defence system to counter the German V2 rockets. It lingered on in the minds of various scientists and research institutes, some of them partially government-funded, but it was going nowhere fast. Then, in 1967 the idea lodged in Ronald Reagan’s mind when as governor of California he attended a lecture by Edward Teller, who had worked on the Manhattan Project – the development of the atomic bomb.

SDI became Reagan’s signature project when he became president in 1981, and he threw huge resources at the R&D. The costs have never been publically aggregated, but in 1985 one scientific study estimated that by 1990 SDI would absorb one quarter of the US Defense Department’s R&D funding. The programme was progressively abandoned after 1992, although some aspects were incorporated in other (non-strategic systems).

No project in history that did not get beyond the development stage ever had the strategic effect of SDI. It convinced the Soviets that the US could achieve a position of invulnerability from which they could launch a nuclear attack on the Russian homeland. It precipitated the end of the Cold War and the break up of the USSR. And it was conceived and driven by government rather than industry.

Britain’s greatest strategic defence programme – radar – was conceived and researched independently in a university laboratory (Dundee, by Robert Watson Watt) before the First World War, and then developed by the Meteorological Office (a branch of the Board of Trade). It came to fruition in large part through the Committee for the Scientific Survey of Air Defence, set up and funded by the government in 1934 under Sir Henry Tizard, principal of Imperial College London. The committee persuaded the RAF of radar’s potential, and its development was then funded in full by the Air Ministry. Without radar the Battle of Britain in 1940 might have been lost.

Given the urgency and complexity of both the SDI and radar programmes it was wholly beyond private R&D, although some subsidiary elements were taken up from concepts stemming from private research. There comes a point when government must make the critical decision to accelerate investment in R&D, whether in its own research departments or via the private sector (the latter will probably be increasingly the case with cyber).

President Eisenhower famously warned: “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex.”

Without that state action,  priorities would not be met in time. Private enterprise, after all, cannot be expected to be more certain of a concept – and therefore more generous in its R&D – than its intended user.

There is a danger, however. Unchecked, the close and mutually beneficial relationship between government and private defence R&D will tend towards ever greater spending, since the potential of technology is in large part a function of how much is spent. President Eisenhower – who had been a soldier for 41 years – famously warned in his farewell address in January 1961 of this tendency: “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex.”

For this reason government must be prepared to direct defence R&D along specific lines of exploration, based on its own assessment of future operating conditions. In other words, the state must make choices, and in doing so direct its entrepreneurial capability to smart ends. That means resisting routine, incremental R&D that is likely to yield only marginal advantage – a notoriously profitable area for defence companies. Instead, the state must be alert to unexpected technological potential from ‘off-field’, and agile enough to fund urgent R&D to the point that a decision about viability can be taken – a fine balancing act.

Although in the past there has been much commercial spin-off from defence R&D, it is not obvious that in the future this will be so. Indeed, defence acquisition will increasingly become a business of technological repurposing. To meet the likely increase in R&D expenditure needed in a world where the rate of technological change is increasing at an unprecedented pace, government spending might have to be offset by limiting production. In the past production has tended to automatically follow development – that must change.

Whatever the mercantilist advantages of the entrepreneurial state, however, it is worth recalling Eisenhower’s specific concern about R&D:

“Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite. It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system – ever aiming toward the supreme goals of our free society.”

R&D is an infinite process. Every new technological concept begins the process of counter-concept, and the ‘threat’ is an ever-evolving one. State investment is essential to ensure urgent needs are met. But success breeds ever more demands for more investment in new R&D projects, and government must be disciplined in resisting that pull. Benjamin Franklin famously remarked “nothing can be said to be certain, except death and taxes”, to which should now perhaps be added “more R&D.”

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