New Delhi – Not long before he left this mortal world, former President A P J Abdul Kalam had stressed the importance of having a long-term defence strategy and vision for defence industry growth. He was keen on India establishing a military-industrial complex involving large private industries. “The need of the hour is to establish a military-industry complex (MIC) at the national level enlisting large and medium industries to be partners along with defence PSUs (public sector units) as its members,” Kalam had said at an event organised by Associated Chambers of Commerce and Industry of India in May this year. However, a MIC for Kalam was not collaboration simply between Indian PSUs and Indian corporate houses. “Encouraging high technology tie-ups and joint ventures between Indian and other global defence industries will achieve not only competitiveness but also envisage the product for export,” he had underlined.
In my considered view, the former President was bang on. MICs these days are getting increasingly globalised. Take, for instance, the case of the United States, the world’s foremost military power. Incidentally, the term “military industrial complex” was coined in the United States by President Dwight Eisenhower during the Cold War to welcome the emergence of what is said “the second era” of the American MIC. During the first era, which lasted from 1787 to 1941, the defence sector in the United States consisted totally of the government-owned arsenals and shipyards. However, with the United States participating in the World War II, President Franklin Roosevelt established the “War Production Board” by conscripting the major private industries, particularly those in the automobile sector, into wartime service. But after the War ended, not only these private companies, such as Boeing and General Motors stayed and consolidated their involvement in the military sector, but they were also joined by others like AT&T, General Electric and IBM. One of the important features of this second era was that the Pentagon financed the private sector, which, in turn, created world class technologies that were for use by not only the military but also by the ordinary citizens. One can cite in this regard the examples of drone, night vision goggles, GPS in cars, and what is most important, the Internet.
The end of the Cold War in the 1990s saw the emergence of the “third era” (and this is prevailing at the moment), whose important features are as follows. First, the industry shifted from diversified conglomerates and was managed by defence-only firms. Secondly, the contribution of the Pentagon, both financially and technologically, has been declining, thanks to the shrinking defence budgets. As a result, and this is the third feature, the American MICs are increasingly buying commercial technologies (either buying or giving these technology providers shares) such as cloud computing, cyber security, nanotechnology and even smart phones. Just see how Google acquired Boston Dynamics that had created BigDog, a four-legged robot that can support soldiers in rough terrain.
However, these features are increasingly proving insufficient to sustain the US defence industry. Though it is courting commercial companies, it only prefers the American ones. It is not globalizing itself properly, shunning the option of coproducing products abroad with allies and friends the way the Japanese and Koreans are developing their technologies and manufacturing brands in foreign countries, from where they are exporting them to various parts of the world. America’s F-35 example, by distributing the burden of the development cost of the fifth generation fighter plane with some NATO allies, is said to be not enough.
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