Francois-Xavier Meunier - Dual Innovation Systems

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Nevertheless, an opposing view on duality has progressively emerged and has taken a parallel development path. Its supporters perceive the rapprochement between defense innovation and civilian innovation as a risk of disseminating military technologies in general, and weaponry systems in particular (Alic 1994; Tucker 1994; Bonomo et al. 1998; Meier and Hunger 2014). According to this paradigm, on the one hand, duality weakens the capacities of States to control defense technology dissemination, making it easier for enemy or unallied powers to acquire it. On the other hand, military technologies are this way made available to non-State groups, which would then pose a new threat for the States. From this perspective, duality would lower the performance of military expenditure as a guarantee for peace and would pose a risk for global security and economic stability.

Besides these two macroeconomic approaches, there is a later microeconomic perspective on duality, which is seen as an opportunity for defense companies to diversify their activity. Although the aeronautics sector is a pioneer in this field, today almost no industrial sector involved in the military field is free from a dualization of the market, and duality is now key to the strategy of defense companies (Depeyre 2013; Mérindol and Versailles 2015a).

System integrators in particular are leading this rapprochement between civilian and defense fields (Prencipe 1997, 2000; Gholz 2002; Sapolsky 2003; Hobday et al. 2005; Lazaric et al. 2011). Given their specificity, they have to aggregate an increasing number of technologies that are not always exclusively owned by defense manufacturers (for example, semiconductors or telecommunications) and must be able to appropriate or “absorb” technologies that are nowadays not necessarily intended for military application. Conversely, while system integrator skills were originally developed within the defense industry, they are now widespread in many large civilian companies. Due to this competence, such manufacturers, particularly those with access to high technologies, can integrate in their production a broad technological spectrum, which partly originates in the military field. Therefore, due to technology transfers, companies in both defense and civilian sectors benefit from technical advances in various sectors.

From a broader perspective, this dualization can be interpreted as a rapprochement of civilian and military production systems (Guichard 2004a, 2004b; Guichard and Heisbourg 2004; Serfati 2005, 2008; Bellais and Guichard 2006). In 1995, the U.S. Congressional Office for Technological Assessment defined duality as a process through which the Defense Technology and Industrial Base (DTIB) and the broader Commercial Technology and Industrial Base (CTIB) merged into a single National Technology and Industrial Base (NTIB) (US Congress 1990). In its most integrated sense, duality is then defined as an organization aimed at joint defense-civilian technological and industrial production. In the absence of a border between defense technology and civilian technology (if it never existed), the two sectors have an opportunity to cooperate in the research and development of technologies in order to take maximum advantage of overall competences and knowledge previously divided between two environments.

According to this approach, situations such as civilian material being used in a military context, off-the-shelf purchases by the Defense Ministry or, conversely, a technology initially intended for defense being appropriated by an industry, no longer fall under the umbrella of duality. The latter is only defined in terms of commonality, synergies and technological coherence between technological systems and “meso-sectors”, according to the approach proposed by Guichard (2004a, 2004b). The challenge is then to classify technologies in order to evaluate duality. If uses are no longer considered key factors for duality, then it is possible to reduce the bias of the analysis linked to fluctuations in the acquisition policies of Defense Ministries. Moreover, while uses are essential in assessing the criticality of a technology for defense operations, they provide no explanation for a potential technological transversality. How a technology is used gives no indication on its technological characteristics. In this case, an essential distinction lies at the basis of this analysis. The dual use of a technology (market-related duality) should be distinguished from dual innovation (production-related duality).

A second theme approached in addition to duality, and deriving from it, is that of technological innovation as such. When studying innovation, the definition proposed by the second edition of the Oslo Manual can be used, namely: “Technological product and process innovations (TPP) comprise implemented technologically new products and processes and significant technological improvements in products and processes. A TPP innovation has been implemented if it has been introduced on the market (product innovation) or used within a production process (process innovation)” (OECD 2005). By this definition, it is the very essence of innovation to provide companies with a competitive edge. This definition resumes the position supported by Porter (1985), who presents it as key to company competitiveness. Companies willing to maintain sustainable competiveness on a constantly evolving market must have innovation at the core of their strategies.

Moreover, companies are at the center of the innovation process: seizing technological opportunities is a first step that must be followed by protecting the advantage thus obtained, which is key to capitalizing on it (Teece 1986). A company can implement several protection regimes, with various performance levels in terms of degrees of appropriability (Dosi 1988). Six appropriation instruments are commonly identified (Levin et al. 1985): patents, secrecy, lead time, effects of the learning curve, duplication cost and time and the efforts involved in sales and high-quality services. While patents are acknowledged as an efficient product innovation appropriation mechanism, secrecy, lead time and the effects of the learning curve are considered as efficient for process innovation protection. The latter are nevertheless difficult, if not impossible, to understand, at least as far as secrecy, a very significant concept in defense industry, is concerned.

Technology draws particular attention from economists, who, among others, attempt to formulate a precise definition of this term. There are many approaches according to which technology – sometimes referred to as “technique” – is not considered as a simple artifact. It is obviously composed of one or several artifacts, but it may also include technical systems, knowledge, a social environment or uses (Pinch and Bijker 1984; MacKenzie 1993; MacKenzie and Wajcman 1999; Bijker 2010; Bijker et al. 2012).

Knowledge plays an essential role in these approaches, similar to that described by Carlsson and Stankiewicz (1991), according to whom technology is a “flow of knowledge and competences”. Knowledge is the basis of technological systems and operates as a means to differentiate them. On this subject, the economists make a fundamental distinction between codified knowledge and tacit knowledge (Polanyi 1983). Codified knowledge is explicit, and can easily be the object of transactions through a medium (for example, a patent) which carries it. Tacit knowledge comprises know-how that is often associated with an individual or an organization, which renders commodification more difficult.

Even codified, technological knowledge is not transferred as simple information. There are costs involved in the acquisition of unformalized knowledge and organizational competences required for its use (Mansfield 1998). While the study of knowledge is instrumental to understanding technological systems structuring, the analysis is expected to capture, beyond its formal part, the informal aspects that are necessarily associated with it.

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