Francois-Xavier Meunier - Dual Innovation Systems

Consequently, the added value of this study is threefold: first, a duality analysis framework rooted in the principles of industrial economics and innovation economics, because of which duality is no longer considered a defense particularism; second, a set of tools that make possible, in addition to the traditional case studies, the measurement of the dual potential of various knowledge systems and their comparison; finally, an analysis of the dual potential of knowledge systems that are representative of the innovation activity of the world’s largest innovative companies in the field of defense between 2010 and 2012.

Technological production is partly driven by the intended uses of the developed technology. This does not exclude the possibility that certain technologies simultaneously have multiple uses. Putting together defense innovation and civilian innovation for the joint production of technologies that are useful to both civilian and defense domains is a challenge that can be addressed by gaining a certain understanding of technology production and dissemination mechanisms.

This first part of the book aims to build the theoretical framework for studying various modes of interaction between the defense innovation sector and the civilian innovation sector. Starting in the 1980s, technological duality has been dealt with in many works (Gummett and Reppy 1988; Alic 1994; Cowan and Foray 1995; Molas-Gallart 1997; Kulve and Smit 2003; Mérindol and Versailles 2015b), but the manner in which it is defined often varies from one author to another. It is nevertheless easy to get a sense of dual innovation, whose common and prosaic definition is the search for synergies between defense and civilian sectors in the innovation process. However, distinguishing it from related and sometimes amalgamated notions, such as dual-use items, technology transfers, spin-offs and spillovers, is not always an easy task. Whatever the case, the most recent works seem to agree on the systemic nature of dual innovation (Guichard 2004a; Mérindol and Versailles 2010; Acosta et al. 2013) and in order to integrate all the dimensions of duality, this is the path followed in building the theoretical framework proposed here.

The analysis will however focus on the purely technological dimension and the perspective adopted for this purpose is that of the technological system, as defined by Carlsson and Stankiewicz (1991) as a flow of knowledge and competences. Due to this approach to technology, the specific role of knowledge flows can be pointed out. As will be shown further on, these differ from other flows of goods or services and have an essential role in the definition of dual potential. In this context, the way knowledge dissemination is dealt with is crucial. In line with the above, a systemic perspective will be adopted here.

This first part of the book aims to propose a “universal” framework of analysis of duality, which facilitates an analysis focused on one of its components and its integration in the broader perspective of innovation systems. In terms of knowledge dissemination, this proposal opens up the way to creating a set of tools that will enable, in addition to the case studies, the measurement of the dual potential of various technological systems. The first step is to understand how knowledge production is a vector of technological proximity between the civilian sector and the defense sector and how this proximity can be measured.

This part is composed of three chapters that successively present the concept of duality, the method used for the study of knowledge dissemination and the definition of an original framework of analysis for the subsequent study of duality.

The relationship between civilian production and military production has evolved throughout the centuries. However, it was after World War II that this relationship developed considerably, and also became more complex. The period prior to the 1970s abounds in “spontaneous” technological spin-offs resulting from military innovations produced during World War II. Then, during the 1980s, the technological initiative attributed to the defense industry was called into question; it was the end of the spin-offs paradigm (Alic 1994). From a pure economic perspective, military expenditure became more difficult to justify.

In the transition period between the 1970s and 1980s, the term “dual use” was introduced in the United States to justify civilian R&D expenses on defense budgets, and thus bypass WTO rules (Uzunidis and Bailly 2005). Many authors have since then studied this notion, approaching it from various angles (Gummett and Reppy 1988; Alic et al. 1992; Alic 1994; Cowan and Foray 1995; Molas-Gallart 1997; Kulve and Smit 2003; Guichard 2004a; Mérindol and Versailles 2010). While duality between civilian and military sectors obviously suggests a rapprochement between these two sectors, no consensual definition has been reached. There are two major lines of research in the literature. The first one focuses on the object supporting duality, while the second deals with the actors and the objectives they are trying to reach through duality.

This chapter presents a review of the theoretical and empirical literature on duality and related concepts, aiming to highlight the key characteristics of this phenomenon.

The debate on the role of defense innovation in a dual technological universe is marked by extremely clear-cut positions. The first states that, due to military R&D specificities, public expenditure is less productive in this sector than in the civilian sector (Mowery and Rosenberg 1991; Lichtenberg 1995); it opposes the idea that due to these (financial, technical or organizational) specificities, defense innovation can generate technological breakthroughs that the market would not be able to bring (Alic 1994; Mowery 2009). Moreover, it adopts a position according to which civilian or military technical specificities limit technological transferability (Chesnais and Serfati 1992; Serfati 2005, 2008), or that it is first of all the civilian sector that stimulates innovation (Braddon 1999; Stowsky 2004). In reality, all these perspectives strongly depend on how defense innovation is perceived and on the authors’ understanding of the relationship between civilian and military sectors.

The first works employing the concept of dual-use technologies referred to specific technologies, which, given their characteristics, led to applications in the civilian and military fields. The direction of this dissemination ran particularly from defense to the civilian world; this was named the “spin-off paradigm” by Alic et al. (1992). They referred to technologies developed within large military programs and subsequently used for new opportunities (most of which were not expected). The orientation of these spin-offs from the defense sector toward the civilian sector dominated the perception on the civilian–defense relation until the end of 1980s. It is worth noting that this perception of duality highlights the fact that, given their nature, only certain technologies can be the object of a transfer from one sector to another.

Such an understanding of this relation focuses on the result rather than on the technological rapprochement between the military and civilian sectors (Gummett and Reppy 1988). This assessment relies on many case studies, conducted in particular in the United States at the end of the 1980s, which identify technologies that can be transferred, most often from the military to the civilian sector, but also in the reverse direction in certain cases. Industrial sectors such as data processing, electronics or aeronautics in particular have been cited in many works, such as those of Flamm (1988), Gansler (1989) and Alic (1994) or in OTA (Office of Technology Assessment) publications, such as the 1990 report entitled “Arming our allies: Cooperation and competition in defense technology”.