Extramural R&D Expenditures

Extramural R&DIn the mid 1960s when I was most active in military intelligence, the United States’ internal orientation was reflected in its R&D expenses—more than 90% of private R&D expenses in the United States were for internal operations, and the tools and techniques for technology management were applied inside the R&D lab.

However, between 1965 and 1995, R&D managers in other nations (such as Japan, Germany, France, the Netherlands, and Finland) vastly improved the positions of their firms, at least in part, by focusing more on technical intelligence. The success of these efforts is evident in industries such as automobiles, specialty-chemicals, textiles, electronics, and pulp and paper. Responses by United States businesses began shifting R&D expenditures: in 1995, Industrial Research Institute estimates were that only about 60% of private U.S. R&D dollars were for strictly internal operations. U.S. firms continue to increase their commitment to alliances, joint ventures, and a variety of external networking mechanisms and scanning activities. This trend is a sign cant adjustment in the attitudes and outlook of technology development managers from the previous century.

The graph to the left is for Federal R&D spending, but it is certainly in line with the extramural spending on the part of firms worldwide. What percentage of the extramural dollars spent on legitimate research versus intelligence gathering, as is not surprising, is hardly reported by anyone.


Internal vs External Threats

S&T ThreatsIn the past, formal methods for monitoring R&D in competitor organizations were not considered necessary because scientists and engineers could learn about advances informally from colleagues and other professionals. But in today’s global world, informal watching of the players, developments, and trends is usually not sufficient. What is needed is often called competitive technical intelligence (CTI)—systematic methods carried out by professionals to collect, analyze, and communicate (to relevant users) action-oriented information on external S&T threats and opportunities.[1]

This distinction between external and internal attention is critical. CTI addresses the future needs of decision-makers and analysts from a uniquely external viewpoint to complement each organization’s tendency to focus inside the organization. One way to understand the shift from internal technology development to external technical intelligence is to examine the United States’ response to the R&D strategies of firms from other nations

[1] Figure 1 is from ScienceDirect, “Technological Forecasting and Opportunity Assessment,” by Gert T. duPreez and Carl W. I. Pistorius (19 August 1999), downloaded May 4, 2015

Case of the F-35 Stealth Fighter

Historically, most commercial technology development has been focused inside the firm. In research and development (R&D) laboratories and company test sites, new technology was expected to emerge from internal sources. Company attention was therefore directed at day-to-day management of in-house ideas, projects, and technical operations. Now these behaviors are changF-35 Stealth Fightering and R&D laboratories are seeking more information about developments outside their walls. Market competitors (such as General Electric and Westinghouse or IBM and Apple) are now becoming R&D competitors, often pursuing similar technical objectives for improved products and processes. Company laboratories and development centers recognize that technology is available from many parts of the world and that gaining an R&D edge requires more attention to exploiting the know-how developed by others. No matter where new technology comes from, the first firm to commercialize an advance is likely to capture the significant returns.

Therefore, no one should be surprised that such recognition is not limited to the United States.

“Top Official Admits F-35 Stealth Fighter Secrets Stolen”[1] By Sydney J. Freedberg Jr. on June 20, 2013 at 2:21 PM

At a subcommittee hearing attended by just half a dozen Senators, the Pentagon’s top weapons buyer made a blunt admission: The military’s most expensive program, the stealthy F-35 Joint Strike Fighter, has been hacked and the stolen data used by America’s adversaries. Under Secretary Frank Kendall didn’t say by whom, but the answer is almost certainly China, a cyber superpower whose People’s Liberation Army Air Force has recently rolled out some suspiciously sophisticated stealth fighter prototypes of its own. The Russians also have skilled hackers and “5th Generation” stealth jet programs, but they’re not suspected of such direct copying, at least not yet.

[1] By Sydney J. Freedberg Jr. at Breaking Defense (June 20, 2013). Downloaded May 1, 2015

Sci and Tech Intel as a Profession

China HackersThe practice of applying intelligence principles to science and technology (S&T) for purposes of security, is a relatively new field. Of course, acquiring new technologies that can be used defensively has always been with us. However not a great deal of effort has been expended to make the field of S&T intelligence a professional enterprise.

This blog is an attempt to bring together information on this topic from professionals who are skilled in intelligence production and use. The motivations for this endeavor are straightforward. I have been intimately involved in S&T intelligence since the 1960s, and have been teaching the same for over twenty years. In spite of the general recognition that S&T knowledge is vital to security, there has been only a gradual acceptance of that intelligence as a significant element of national security. The S&T aspects of competitive intelligence have been slower to evolve, but the pace of interest in this field is accelerating. An increasing number of business, research, technology, and investment professionals are now focusing on use of intelligence to exploit technology. It is no secret that US technology has been a target of foreign intelligence especially since 1940. Therefore it is evident that there is the need to integrate these experiences in a practitioner-oriented blog at a time when the field is still young.

Foreign Threats to National Technological Information

In 2010, China announced that it has conducted a missile defense test. The announcement was brief:

BEIJING, Jan. 12 [2010] (Xinhua)—China’s missile interception test Monday [January 11, 2010] accorded with its defensive military strategy, said Foreign Ministry spokeswoman Jiang Yu on Tuesday.

China conducted a test on ground-based midcourse missile interception technology within its territory on Monday.

“The test was defensive in nature and targeted at no country,” said [Spokeswoman Jiang Yu] Jiang, adding it was in line with the defensive national defense policy that China had always pursued.

China had always taken the road of peaceful development and its strengthening of national defense construction was for the maintenance of national sovereignty and security, she said.

The test would neither produce space debris in orbit nor pose a threat to the safety of orbiting spacecraft.

What are the implications for U.S. security? In April, 2015 the U.S. announced its tripling of spending on offensive space control and “active defense” weaponry since 2013.[1] It would seem that the Chinese test, as well as indications of Russian ASAT development caught the US flatfooted. This was supported by an interview on CBS Sixty Minutes segment, “The Battle Above.”[2]with what CBS calls “The Air Force’s top ‘space geek,’” Gen. John Hyten, the head of Air Force Space Command.

According to Air Force Lt. Gen Jay Raymond, “We’ve known for some time that China conducted an anti-satellite test, July 23 last year [2014], but we learned today [April 14, 2015] that the test was “successful” even if it didn’t destroy anything.”

In reality, no nation really wants a war in outer space. Satellites are, to be sure, highly vulnerable, not only to a variety of measures of attack, but to solar flares and especially space junk. One might ask, “Isn’t there an ASAT treaty?”

Actually no. No single treaty fully specifies which space activities are allowed an which prohibited,, and existing agreements do not apply uniformly to all countries. Some states are party to the 1967 Outer Space Treaty[3]. The US and the Soviet Union agreed bilaterally in the context of SALT I (the ABM Treaty[4]. Was the US “at ease in Zion” given these treaties, and surprised by the successful test by the Chinese?

One must note that for most of the space era, it was assumed that our geosynchronous satellites, about 22,500 miles up from Earth’s surface, were invulnerable to killer satellites, or ground-based missile attack. They were so far out it seemed unlikely that any weapon could reach them well enough to target them. That is now highly in question, given the ongoing tests by China and Russia.

Geosynchronous satellites are the eyes and ears of the world. All countries rely on these satellites for GPS information. From cell phones, to defense. The current constellation of satellites providing GPS consists of 24-28 operational satellites. What are the implications of threats to satellites?

It’s not as far-fetched as it might sound. Eighteen of the 28 satellites in the GPS constellation are operating past their intended lifespan or suffering from equipment failure. There have been three launch incidents in the past five years, and the Air Force, which maintains the 20-year-old network, is overburdened with competing space priorities.

Given the circumstances, planners are concerned with the system’s health. “If GPS were to fail completely, the cost would be incalculable,”[John] Petersen [Director of the Arlington Institute, a scenario-planning outfit in Virginia] says. “Civil aviation, trucking, shipping, and telecommunications would be worst hit, but countless other industries would be affected.” Internet activity would slow to a crawl, because many backbone operators rely on precise GPS time stamps to route data. Agribusiness and commercial fishing could be blinded, causing food prices to skyrocket. The $12 billion market for GPS devices would be sent reeling, and the arrival of location-based wireless services would be set back years.[5]

To avoid just this one kind of disaster (there are others with loss of satellites) scientific and technical intelligence must be kept abreast of emerging science and technology as is possible. Thus we begin looking at Technical Intelligence for Security.

[1] Colin Clark, “US Presses Russia, China On ASAT Tests; Space Control Spending Triples,” Breaking Defense (April 16, 2015).

[2] CBS News “Sixty Minutes: The Air Force’s top ‘space geek.’” Produced by Andy Court, producer, David Martin, correspondent.

[3] “Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, ” 18 U.S,T. 2410; T. I.A.S. 6347. “’Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space and Under Water, “14 U. S.T. 1313, T. I.A. S. 5433.

[4] “Treaty Between the United States and the U.S.S.R. on the Limitation of Anti-Ballistic Missile Systems,” Oct. 3, 1972, 23U.S.T. 3435, T. I.A.S. 7503.

[5] Andrew Zolli, “Oh, Nooo! What If GPS Fails?” Wired (May, 2003)