Policy impetus – Leveraging the strength of private players for Defence Digitisation 2/3

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In the first STL Macro story of this series of 3 on – Policy impetus for Defence Digitisation, we delved into the need for a dedicated defence ICT budget. From a strategic viewpoint, it underscores the need for a technology-centric defence ecosystem in terms of concrete investment roadmap. In this second story, we will discuss how MoD and dPSUs can leverage the capabilities of private sector, to actualise this vision of a Digitally Supreme Indian Defence.

Vision of a Digitally Supreme Indian Defence

The new landscape of warfare and the evolving role of defence networks and allied technologies, is setting the stage for a digital heavy defence strategy. Highly competent and synergised Tri-Forces networks with modern tactical communications and cloud infrastructure need to be systematically incorporated in the medium term defence modernisation vision. This will lay the foundation for using advanced technologies in key defence areas. This network centricity will actually build strategic deterrence for the defence forces, which will serve to diffuse collusive threats from hostile countries and also pave way for superior ISR and intelligent decision support systems. The possibility of weaponising technology, like the way many advanced countries have, can be opened up with the crucial first step of “Digital Modernisation” across the Tri-Forces and the Paramilitary.

The right balance between weaponry modernisation and digital transformation

Amongst the contenders in the defence modernisation space, often primary categories like weaponry, artillery, combat vehicles etc. take precedence over areas like secure communications and digitisation or network centric warfare. The common reason is budget constraints and pressures from revenue expenditures. Looking at this arbitrage, countries with sizable defence ambitions and budgets should re-calibrate modernisation plans basis these two parameters – Strategic criticality to defence outcomes (deterrence and attack capabilities, mission effectiveness) and investment roadmap.

When we look at the defence communications from strategic criticality point of view, we see that the increasing propensity of cyber-attacks and digital warfare makes a compelling case for modern and secure communication networks in all areas of defence. In-fact, it not only limited to communication networks. Creating a digitally advanced ecosystem which starts from the tactical battlefield and goes up to the command level, is of utmost importance and it all starts with a “family of systems” approach with a cutting edge communication network at the centre and all the future technologies like robotics, artificial intelligence operating on the back of this high speed, low latency network.

All key parameters like – information sharing, improved situational awareness, speed of command and enhanced mission effectiveness – can be achieved by creating state of the art communication networks and ensuing digital ecosystems.

When we look at the investment roadmap part, we find that in the absence of a dedicated defence ICT budget, network modernisation tends to take a backseat. In the Indian context, we need to evaluate the modernisation mandate from a new angle to calibrate investments and strategic priorities. In the long run, Defence networks will not only be communication enablers, but will massively contribute in reduction of human casualties, manual intervention, collateral damage and cost of war.

To achieve these outcomes, digital excellence needs to be systematically incubated into the forces. Needless to say that defence ICT and modernisation initiatives need to be indigenised and in this context, the role of Indian Private Sector becomes very critical.

In fact, a home grown technology ecosystem needs to be nurtured to convert the vision of MoD and DRDO into a reality.

The need for private participation in Defence and the status quo

There has traditionally been a technology deficit in the defence area and we see divergent approaches for two key areas which is manufacturing (weaponry and equipment) and other areas like services and ICT interventions. To fix the long standing manufacturing technology deficit, which makes India world’s largest importer of defence equipment, the GoI has put in a huge policy impetus to turn India into a defence manufacturing powerhouse. Country’s defence spending is expected to rise to $620 billion by 2022 and private sector players like Tata Advanced Systems Limited (TASL), Reliance naval and engineering limited, Mahindra, Bharat forge, Ashok Leyland Defence are investing in technology and capitalising on this opportunity. This strategic initiative that nurtures domestic players, will also reduce reliance on big foreign players like Rafael, Lockheed Martin and many more, in the long run.

However, defence ICT, which will be a supercritical element in the defence strategy, has not got the same policy impetus as defence manufacturing. Considering the importance of network centric warfare, each echelon of defence will need to be modernised and digitised. The GoI has earmarked a budget of $130 bn for armed forces modernisation, over the next 7-8 years, but yet, this does not hold any dedicated allocations for defence ICT modernisation.  Also, unlike defence manufacturing, the locus of control for the defence ICT, lies with the dPSUs. Till now, the private sector has been on the side lines of the defence digitisation vision. The engagement and implementation models with the private sector have not evolved with the time. Currently, the defence PSUs (dPSUs) are driving critical defence projects, with the private sector enabling fast and time bound execution. This execution-based engagement, undermines the potential of net new innovations on the defence digitisation agendas and there can be a strong case for new models focused on co-creation, which fully leverage the technology and agility potential of the private sector.

Indian private sector is strongly positioned to deliver on the digital transformation needs of Defence

If indigenous capability to achieve digitisation in defence is a measure, then Indian private sector has proved its mettle in not only taking the Indian telecommunications industry to new heights but by also evolving to deliver on the global technology mandates like 4G and 5G. India’s transition from a voice to a data consuming country has been led by the private sector, with companies like Airtel (a first generation home grown business) and Idea (an Indian conglomerate). More recently, the democratisation of 4G in the entire country along with evolution of OTT models for telecom operators has been led by Reliance Jio, which is now the largest telco in the country. This feat is now a global case study on the fastest subscriber and traffic growth. Many more such technology disruptions in the ICT field are being led by the private sector and the burgeoning tech start-up ecosystem.

With the help appropriate policy push and the technology and execution capabilities of the private sector, India has not only been successful in achieving more than 90% tele density, 50% internet density but has also been successful in bridging the rural and urban digital divide to a large extent.

The same success can be replicated in the area of Defence, where-in not only networks, but an entire set of digital technologies need to be incubated in a systematic way in the following critical defence areas:

  • Designing and building futuristic Tri-forces networks with the much required ‘Jointness’
  • Guarding and tech-manning borders to reduce intrusions and human casualties
  • Next generation of ISR with miniaturised, self-healing and multidomain sensor and autonomous technologies
  • Tactical communications and connected soldier applications
  • AI/ML based decision support systems

PPP – A global perspective

India can take some precedence from countries like Australia, France, Germany, Japan, South Korea and the UK. These countries have leveraged PPP models across many areas including infrastructure development, MRO (Maintenance, repair, operations), ICT, satellite communications, simulators, training and many more. These engagements have increased capital infusion, technology innovation and contributed to defence goals of these countries

Private sector participation on equal footing is required to catapult defence into digital supremacy

In many areas, private sector has been on the forefront of achieving strategic national goals. As per the latest policies, government is opening up critical sectors like agriculture, railways and coal mining for greater private participation. In defence per se, the GoI launched the strategic partnership model last year to cover 4 critical areas of helicopters, submarines, armoured vehicles and fighter jets. The plan is yet to take off conclusively but opens a way for similar models for defence communications and digitisation.

If India has to be at par with the most advanced defence forces globally, then next-gen networks and a 360-degree digital ecosystem is a must.

Unlike defence manufacturing, in the defence ICT space, there is only marginal technology deficit vis a vis foreign players, hence implementing this model for defence networks makes a more viable and credible case.

10 reasons why private participation is critical and not only desirable in Defence ICT

  1. Need for business and economic best practices to make defence operations more efficient – Indian defence is fraught with mounting revenue expenditures and a healthy participation from private players can bring in some of the best business best practices in defence
    1. Total quality management
    1. Just in time logistics
    1. Synergised supply chain management

The military can particularly benefit from increased collaboration with the private sector in the areas of logistics, additive manufacturing and rapid prototyping, and talent management”

  1. Skewed tooth to tail ratio – According to a Mckinsey global benchmarking survey for defence, tooth to tail ratio or ratio of combat, combat support and non-combat support manpower for each of the forces. India’s tooth to tail ratio is heavily skewed towards the tail i.e the non-combat support, to the tune of 74%. This presents a huge opportunity for digitisation and private participation is the only option which can deliver this at such a large scale.
  2. Past successes in PPP models – There is enough precedence that PPP models can create value in sectors of strategic importance. India has witnessed tangible results in PPP for ports, Mumbai and delhi metros and a score of health related partnerships in the southern states.
  3. All-stack network capability – All stack network capability is lacking in the DPSU’s which leads to un synergised planning and execution of digital initiatives in defence. With experienced private players having end to end expertise from physical layer to the application layer, a robust and future ready defence ecosystem can be created
  4. Deploying technologies of future – Various syndicated studies across the defence milieu cite the dawn of robotics, artificial intelligence, internet of battle things as the next big wave in the coming 5 years. Is Indian defence (with the current DPSU horizon) ready for taking these technologies mainstream? The answer is no. This can only happen when private industry experts come in.
  5. Bringing in disruptive use cases (bespoke solutions) – to meet critical defence outcomes of situational awareness, reconnaissance and target acquisition. The R&D budget for defence is pegged at a 6%, as against a 20% in the case of China. This inhibits critical research in upcoming areas. Private players bridge this gap by designing and prototyping bespoke solutions like – fibre optic sensing, hybrid surveillance, Ad-hoc network set up etc.
  6. Solutions based approach – When a complete overhaul is not possible and existing ecosystem needs to be augmented to make it future ready, a solution based approach is required. This is a consultative exercise which involves complex problem solving, hypothesis testing and resource optimisation. Private players with better exposure across industries are well poised to crack difficult problems faced by the defence network – for example – how to make legacy networks carrier grade without
  7. Strategic partner ecosystem – Private players are constantly evolving and creating partner ecosystems which go beyond short term relationships and are built on long term technology roadmap. This gives an opportunity to get the best of partners deliver the most relevant services at the most competitive prices
  8. Executional efficiencies – With a focus on deign thinking and project management rigor on execution, private players can be instrumental in delivering cost and time efficiencies for large scale projects
  9. International benchmarking with the best – The United States arm – Federally Funded Research & Devt Centres (FFRDC) owns 42 R&D centres with numerous public private partnerships thriving under govt sponsorship.

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