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NATO Summit: What’s at Stake for Defense Industry
By Sandra I. Erwin

As the 2012 NATO Summit gets under way May 19 in Chicago, U.S. defense industry will be looking for clues on how the alliance plans to tackle vexing equipment and technology challenges.

Although an endgame for Afghanistan will be the dominant item on the agenda, U.S. weapon manufacturers are still hopeful that NATO leaders will devote some attention to how they will implement the much-ballyhooed concept of “smart defense.”

The smart defense initiative is code for how to bridge the yawning gap in military capability and resources between the United States and the other 27 members of the alliance. The imbalance was on full display a year ago during the conflict in Libya to overthrow Moammar Gadhafi. NATO forces ran out of precision-guided munitions just weeks into the operation, and had to rely on the U.S. military for additional weapons, as well as logistics support, intelligence and aerial refueling.

Wayne T. Fujito, chairman of the NATO Industrial Advisory Group, or NIAG, said alliance members are under pressure to improve their military capabilities even in times of shrinking budgets. The smart defense concept, he said, is about “nations spending not more, but more efficiently, about prioritizing, specializing and seeking multinational approaches to capability development.”

NIAG members have been “working very hard to get the summit to recognize the important role that industry has in solving the smart defense challenges,” Fujito told National Defense. “There needs to be a trusted partnership between industry and nations.”

But with Europe mired in financial woes and military budgets there are taking a nosedive, industry might have to temper expectations, analysts said. The widening disparities between the United States and the rest of the alliance reflect chronic underinvestment in defense, said Stewart M. Patrick, senior fellow at the Council on Foreign Relations. Since 1991, the European share of total NATO defense expenditures has dwindled from one-third to one-fifth, he estimated. Today, the United States spends more than 4 percent of its GDP on defense spending. Europeans, on average, devote only 1.6 percent. “Without greater European efforts, as former Secretary of Defense Robert Gates warned in his June 2011 valedictory speech in Brussels, the alliance faces the very real possibility of collective military irrelevance,” said Stewart.

U.S. military commanders and arms suppliers also would like to see some concrete actions taken on the perennially frustrating issue of interoperability between U.S. and NATO allies’ equipment, computer networks and information systems. The future of NATO indeed might rest on fixing the interoperability problem, officials said.

Chairman of the Joint Chiefs of Staff Army Gen. Martin Dempsey recently published a new “joint operational access concept” for how U.S. and allied forces would fight a war against a technologically advanced enemy. Key to that concept is the ability to integrate command-and-control systems so partner nations can fight as a single force, said Marine Corps Lt. Gen. George J. Flynn, director J-7 of the Joint Staff. “One of the risks we’ve already identified is what happens if our partners aren’t able to network,” Flynn said May 18 at a Center for Strategic and International Studies conference in Washington, D.C.

Fujito said that technological incompatibility problems are fixable, as long as there is clear communication of the alliance’s requirements. “Industry needs to be involved earlier than currently experienced,” Fujito said. He said industry would like to see a coherent plan for how to pursue multinational efforts in areas such as missile defense, cybersecurity, aerial surveillance and intelligence sharing.

The NIAG is hoping for an endorsement in the Chicago Summit’s Declaration of Defense Capabilities, Fujito said. “I understand that the NATO Secretary General will recommend the appointment of a special envoy to hear the voices of industry,” he said. “That is a good thing.”

Fujito noted that NATO leaders can solicit the views of industry via the NIAG, which was formed in 1968 as a high-level consultative and advisory group of senior industrialists.

NIAG soon will unveil two major studies on cybersecurity and missile defense. The group also is gearing up for a NATO Industry Day conference in Riga, Latvia, Oct. 15-16.


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