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<HTML> <HEAD> <TITLE>1999 Book</TITLE> </HEAD> <BODY LINK="#0000ff" BGPROPERTIES="FIXED" BGCOLOR="#ffffff"> <BASEFONT SIZE="3"> <HR SIZE="2"><P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="7" FACE="Palatino"> Chapter 37 </FONT></P><HR SIZE="2"> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="6" FACE="Palatino"> Evolving Trends and Their Effect on <BR> The Future Security Environment </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> Mr. Ralph Crosby<BR> Corporate Vice President Northrop-Grumman Corporation </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> <BR> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> <BR> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> <BR> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> <FONT COLOR="#000000" FACE="Palatino" SIZE="7">A</FONT>s issues of security increasingly interact with international defense-industrial consolidation, the need for a NATO dialogue that includes the voice of industry is critical. I thank you for recognizing this need—one which the existence of this panel demonstrates. Certainly our work with B-2s, EA-6s, and JSTARS is relevant. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Currently a number of transitions are underway that are influencing the shape of the future security environment and the role that we play as providers of the systems used by NATO’s 19 nations. These are: the evolving of NATO’s roles and missions in the post-Cold War era; the evolving of doctrine as technology integrates the battlefield and the peacekeeping environment; the way constraints on investments are being applied to NATO countries’ national security resources; the continuing consolidation of the U.S. and the European defense industries. Each is a distinct trend, but all clearly link. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B></B><B>NATO’S EVOLUTION</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Everyone recognizes that NATO’s role has changed and must continue to evolve. Changes in the nature of threats to member-nations’ security, the growth of Alliance membership, and the evolving European economic community call for NATO to become a strong leader as a world organization. NATO must become even better at: </FONT></P> <UL> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Defining the probable next-century threats and their solutions </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Determining the requirements to enable our military capability (forces, hardware, doctrine) to meet NATO’s strategic objectives </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Leveraging the capabilities of member-nations to gain the best results at an affordable cost </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Maintaining readiness for and leading combined military and peacekeeping operations such as those in Kosovo. </FONT></LI> </UL> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>THE EVOLUTION IN DEFENSE DOCTRINE</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Over the past decade, we have seen defense policy shifting worldwide, including the focus of the defense environment and warfighting. Our force structure has changed from a Cold War platform-centric, service-specific structure of armored warfare, carrier warfare, strategic bombing, and amphibious warfare to a post-Cold War <I>network-centric</I> structure involving all services in surveillance and reconnaissance; command, control, and communications; and intelligence, coupled with precision strike capabilities. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>THE EFFECTS OF DECLINING RESOURCES</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The trend toward greater sharing of responsibility unfortunately intersected directly with smaller defense budgets, particularly on the eastern side of the Atlantic. International retrenchment in defense budgets as priorities began in the early ‘90s, with monies redirected from military to domestic and social issues. In the United States, the cycle has now begun to return to defense spending, but in Europe the struggle continues. Each nation has an evolving posture relative to domestic policy versus defense spending. Some are focused on non-defense issues, waiting for a clearer understanding of NATO operations and direction before committing funds. Others are increasing spending, but appear to lack an overall focus for procurement strategies. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> In general, while the need for equipment modernization is widely acknowledged, member-countries have not increased their momentum to fully meet NATO’s current force strategy. A few figures demonstrate the problem: U.S. defense spending is 3.5% of GDP; NATO’s is 2.2%; the U.S. is spending twice Europe’s total on defense and almost four times its R&D. Can these differentials co-exist in the drive to establish common procurement and interoperability? It will certainly prove to be more difficult if “Fortress Europe” and “Fortress America” develop. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>THE DRAMATICALLY CHANGING INDUSTRIAL BASE</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> While NATO member-nations have been dealing with budget priorities, the structure of the industry has been changing radically. We have just seen significant defense industry consolidation in the United States. During the last decade, its defense industry has been reduced from 50 independent companies to five major companies, but while mergers of second-tier companies continue there, the major consolidations appear to be over. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The consolidation of the U.S. defense industry has now increased pressure on European defense companies to accelerate efforts to restructure their defense industry. European consolidations would further build critical mass, allowing for a more effective pooling of technology and reduced production costs. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> In addition to consolidation, there is also a compelling view that favors broadening transatlantic aerospace and defense cooperation. Various forms of transatlantic relationships, from outright acquisitions to strategic alliances and joint ventures, are now being explored by both American and European companies. The U.S. Department of Defense has expressed cautious support for trans-oceanic expansion, and has three studies of the issue now underway. To continue in this direction we must determine a policy framework and demonstrate continuing value. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>COOPERATIVE PROCUREMENT</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Despite the interest in cooperation, progress in forming industrial alliances and establishing common procurement of weapon systems continues to be slow. NATO members vary widely in their ability to link effectively with a common procurement strategy. Difficulties include: </FONT></P> <UL> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Lack of critical mass, or production capability limitations </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> R&D investment priorities </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Gross Domestic Product versus defense spending </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Maturity of the force-modernization strategy </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The incidence of mergers, both in Europe and across the Atlantic. </FONT></LI> </UL> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>THE POLICY DILEMMA</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> If we look closely at all the points I have just outlined, we are led to a clear set of conclusions: </FONT></P> <UL> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> NATO’s evolving focus requires the adjustment of force capabilities to meet the new security environment. NATO must adapt to the new notions of info-centric warfare, applying more generous resources supplied by its member-nations through a fully restructured transatlantic defense industry. </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> While this prescription has generous support, 19 political processes are involved in fulfilling it. </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> A major question is how to set the process in motion. My own view starts with the belief that intensive successes breed extensive change. </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> By their very nature, cooperative defense programs require progress in each of the key areas that we discussed today. </FONT></LI> </UL> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Focusing on the critical elements of Alliance modernization—and on the key elements that enable the restructuring of NATO forces—will go a great distance toward creating momentum in each of the areas I have mentioned: evolving roles; changing doctrine; Alliance investment; industry cooperation that leads to greater trust and contributes to the consolidation we all believe is necessary. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B></B><B>A TRENCHANT EXAMPLE</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> By working on these areas, and by wielding its considerable influence on national decision makers, NATO can become the catalyst for achieving the right balance between defense and domestic policy. In Kosovo, constraints on defense spending for technology and equipment were evident in specific shortcomings. For example, air wars such as the one in Kosovo require systems interoperability, real-time information, and precision weaponry, all linked to central command and control. Although NATO has significant capability and used it effectively in the Kosovo action, there were gaps in execution: </FONT></P> <UL> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Some members were unable to gather data by satellite and to rapidly fly large numbers of troops into a conflict zone. </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Pilots were sometimes given photos of mobile targets at takeoff, which meant that the data would be hours old when they arrived at their destination. </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> NATO air crews had to talk “in the clear” because of incompatible secure communications across NATO forces. </FONT></LI> </UL> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> These situations clearly call for a more precise, more real-time, and better integrated battle management “system,” one with fully compatible assets for effective coalition warfare. Thus far, member-nations have not been able to meet such compatibility requirements because of stagnant defense budgets, different national agendas, and varying levels of economic development. While individually we have sophisticated defense systems using the best available technology, in the battle zone we are not realizing their full potential because they are not completely linked. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The technology exists—or is well under development—for enhancements that will provide the command and control systems that are needed to dominate the battle zone. Airborne Ground Surveillance is a prime example of one system that is ripe for such enhancements. Today, Joint STARS is delivering real-time information to commanders concerning the movement of ground equipment across the theater. However, there is still the need to advance this capability and to enhance the array of information for battlefield management. This can be accomplished through continued development and exploitation of today’s technology. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Recently the CNAD undertook the task of increasing capability in this way. The U.S. government endorsed the work by offering the technology from the Radar Technology Insertion Program as the basis for a NATO airborne ground surveillance capability for network-centric warfare. But this is only one example. There are many others. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The point, however, is not about the system, it is about the process of joint development and procurement, a process that can not only improve military capability but also advance doctrine, forge Alliance interoperability, create cross-national and transatlantic partnerships, and make optimal use of scarce investment resources. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>CONCLUDING REMARKS</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The Kosovo conflict—though unfortunate—has provided us with lessons that NATO can apply to refocus, reprioritize, elevate its leadership role, and accelerate the decisionmaking process. Right now we have an opportunity. Through its architecture and leadership, NATO can bring about the governmental cooperation that is necessary to resolve competing agendas and balance the Alliance’s military needs against the domestic needs of its members. Such work will result in better-equipped NATO forces able to maintain security and, if necessary, deal with future conflicts. </FONT></P> <P> </P> <P ALIGN="CENTER"><A HREF="workshop1999.htm">Back to 1999 Workshop Index</a></P></BODY> </HTML>