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Editorial: Quality vs. Affordability

Nov. 19, 2012 - 01:33PM   |  
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In unveiling its newest acquisition reforms last week, the United States joined Britain and France in moving to make exportability a key part of developing future weapons.

Faced with declining orders at home, all three realize that unless they continue to develop quality products that are also affordable, they will fall from the ranks as leading arms exporters in an increasingly competitive market that seeks not top capability, but as much capability as possible on a budget.

In contrast, Britain, France and especially the United States have focused on highly capable systems that have grown increasingly expensive.

And all three have turned to export markets with a vengeance to preserve national industries while helping allies, friends and partners better defend themselves, forge security relationships that span decades and lower domestic acquisition costs while keeping factories humming and skilled workers employed.

For Britain and France, the export dynamic is more challenging, as domestic production volumes tend to be smaller, leading to higher unit costs.

The United States could benefit from economies of scale and pay less for weapons if foreign sales were factored in earlier in the development process.

America has an advantage in volume — vast in comparison to its competitors — and its superpower status make it a coveted security partner.

But U.S. weapons are, in former Defense Secretary Robert Gates’ words, getting exquisite: so expensive that not even the United States can afford them.

Better, he said, that America buy more systems that are good enough and affordable. U.S. systems also have become so packed with cutting-edge technology — and American export controls so stringent — that even Washington’s friends have trouble getting them without costly modification and licensing headaches.

Britain led the way on the exportability drive in its 2010 strategic review. French industry is also working hard on improving the exportability of its products.

Once, America, Britain, France, Israel and Russia were the big players. Today, Brazil, China, India, South Korea and Turkey are all committed to becoming first-rate players — thanks in part to U.S. and European technology, education and training — grabbing orders where good enough is, well, good enough. Once sleepy, the Zhuhai Airshow is now a major international exhibition marking China’s relentless march to global aerospace status.

Systems conceived to be affordable export products, such as the multinational F-35 Joint Strike Fighter, have grown so expensive that even partner nations are struggling with sticker shock, much less potential customers.

Here, the Swedes smell opportunity, hoping the updated version of their Gripen will prove attractive for nations that want a light, advanced fighter jet that is inexpensive to operate. Fortunately for Saab and Swedish industry, Stockholm has greenlighted the project, but it remains unclear whether the order for 80 planes will survive intact.

For all concerned, there are three simple rules well worth following.

First, avoid odd national requirements unless they contribute to capabilities.

Second, never let perfect be the enemy of good enough. a reliable and inexpensive 70 percent solution is good enough most of the time, and the savings can be used for things that really have to be exquisite.

Third, carefully considered, tightly controlled requirements can yield universally appealing systems, whether the Hunter, Mirage or F-16 fighters, ubiquitous transport planes like the DC-3 or C-130, Leopard tanks and German submarines, or Kalashnikov rifles. All achieved immense popularity because they did the job at the right price.

None of this is to say that playing it safe is the key to success. To the contrary, this is about innovation at its best — to develop cutting-edge products that deliver capability, but on a budget.

Ideally, the climate ought to spur greater cooperation, but that may be hard to do as this will be, ultimately, a battle for survival, especially for long-standing players. Those that fail to adapt and continue down the road of innovative overkill will price themselves out of international markets key to their economies and national security.

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