Logo: to the web site of the Swedish Defence University

This study originates in a recognised unsustainable cost escalation for complex defence equipment. In order to understand how such cost escalation for complex product systems (CoPS) can be avoided, this study comparatively explores four different industrial sectors - energy, transportation, healthcare and defence - with and without intergenerational increasing costs, represented by four international companies. The results, collected from studying the development of one of each company’s products, reveal some characteristic differences in market factors between those sectors and companies having problems with intergenerational escalating costs and customer affordability, as compared to other sectors and companies. It is suggested that dependent on market characteristics, it might be necessary to actively manage affordability when CoPS are developed. Efforts made by the companies to make products more affordable were identified, and several factors enabling and disabling the development of less costly products without compromising customer needs were explored. Further, the implications of affordability management in a CoPS setting are elaborated on.

Extant theory suggests that paths of development, although identified as being unsustainable, might be difficult to depart from. The aim of this study has therefore been to explore and understand how a path change can be facilitated in a setting of complex product systems. A unique single case of product development that managed to curb an unsustainable intergenerational cost escalation for complex defence equipment has been studied. The study shows a relation between a path change and a challenging opportunity, and also indicates how this relation can be moderated by the company management and the customers. The study provides both theoretical and practical implications, supporting understanding and facilitation of path changes.

Cost escalation for many complex defence equipment is arguably not sustainable. Customer driven requirements have led to an exponential increase in costs by pushing frontiers of technology to support primarily incremental improvements of traditional equipment concepts. Accordingly, affordability has become a more discussed subject indefence acquisition. This paper addresses the process of generating complex defence equipment concepts. The purpose is to explore how affordability is managed in that process and to identify possible leads to how an unsustainable cost escalation for this type of equipment can be curbed. This is done by studying two cases of concept generation of future combat air equipment systems from a company process perspective. This applied micro perspective on cost escalation showed that none of the concepts generated in these two cases were assessed to curb the cost escalation. Further, the innovation model for the generated concepts, with only one notable exception, was incremental. Nevertheless, the empirical observations from these two cases offer leads on how to potentially foster a more innovative and affordability-oriented concept generation process for future defence equipment, as well as indicating avenues for future research.

Early preliminary concepts are claimed to have a profound impact on the final product. Since these concepts often are based on intuitive judgements, it is important that these judgements are appropriate for the desired outcome. Intuition is derived from what one brings to mind, and consequently, the access to information is important for making relevant judgements. Therefore, when a departure from a present path of development is sought for, access to new information is likely to be required. Results from an experimental study, addressing affordability and concept generation, indicated that individuals were influenced, by the provision of selective information, to make more cost considerations and even to change approach when generating new concepts. It was further recognized that weak abilities to estimate costs in a lifecycle and capability perspective likely hampered low-cost ambitions. The findings from this study are suggested to contribute to theory on product development, and to support affordability when new products are developed.

Summary

Four technology forecast reports from the Fraunhofer Institute and two reports from the Swedish Defence Research Agency (FOI) have been reviewed by staff at the Military Technology Division at the Swedish Defence University (SEDU). The task given by the Defence Materiel Administration (FMV) was to assess the military utility of the given technologies in a timeframe up to the year 2040, from a Swedish Armed Forces (SwAF) perspective.

In the review, we assess the military utility of certain technologies as possible contributions to the operational capabilities of the SwAF, based on identified and relevant scenarios.

The technologies are grouped into four classes of military utility: potentially significant, moderate, negligible or uncertain.

The following technologies were assessed to have the potential for significant military utility:

• Rapid field      identification of harmful microorganisms
• Hypersonic      propulsion

The following technologies were assessed to have a potential for moderate military utility:

• Non-line-of-sight      imaging
• Artificial      intelligence for military decision support

The following technologies were assessed to have uncertain military utility:

• Structural      energy storage
• Triboelectric      nanogenerators

No technology was found to have negligible military utility.

The method used in this technology forecast report was to assign each report to one reviewer in the working group. Firstly, each forecast report was summarized. A new methodological step this year was for each reviewer to discuss the assigned technologies with researchers from FOI. This proved to be a valuable enhancement for understanding the technologies’ present state and likely future development.

The chosen definition of military utility clearly affects the result of the study. The definition used here, ‘the military utility of a certain technology is its contribution to the operational capabilities of the SwAF, within identified relevant scenarios’ has been used in our Technology Forecasts since 2013.

Our evaluation of the method used shows that there is a risk that assessments can be biased by the participating experts’ presumptions and experience from their own field of research. It should also be stressed that the six technologies’ potential military utility was assessed within the specific presented scenarios and their possible contribution to operational capabilities within those specific scenarios, not in general. When additional results have been found in the analysis, this is mentioned.

The greatest value of the method used is its simplicity, cost effectiveness and that it promotes learning within the working group. The composition of the working group and the methodology used are believed to provide a broad and balanced coverage of the technologies being studied. This report should be seen as an executive summary of the research reports and the intention is to help the SwAF Headquarters to evaluate the military utility of emerging technologies within identified relevant scenarios.

Overall, the research reports are considered to be balanced and of high quality in terms of their level of critical analysis regarding technology development. These reports are in line with our task to evaluate the military utility of the emerging technologies.