However, in the past few years there has been a growing reluctance from governments to continue issuing blank cheques and that has reached a climax this year with the current financial crisis.

This is the sad background against which suppliers and buyers in the military are due to meet when they gather for the Defence Systems & Equipment International (DSEI) show in London (8-11 September 2009) and between them they will have to face some tough questions.

"Every country in the world has a real problem with matching aspirations with budget," said Paul Beaver, spokesperson for the DSEI event. "What needs to be done is a reappraisal of what capabilities are required. This is everything from blue water navies to the strategic reach of air forces and the need for tank battalions in armies."

He said there was need for more intelligence in the way military systems were procured because the military could no longer spend whatever they liked.

"We always overspent in the past, but that didn't matter," he said, "It does now. There isn't enough money to do all the things we have traditionally done."

This he said would include a lot less money being spent on commissioning the large platforms such as ships, submarines and armoured vehicles but because of this more is being spent on upgrading existing vehicles.

"The major platforms are on hold," added Andy Gales, vice president of international sales for exhibitor Vicor.

"It is expensive to build new aircraft carriers but you can upgrade the existing platforms with better communications. In many cases, there is not a lot wrong with the old platforms and you can put new functionality into them. These will include sensors, radar, identification friend or foe, all things that were not possible a few years ago."

One of the biggest upgrades that has been happening in Afghanistan is the introduction of communications technology for jamming the signals being sent to road-side bombs to stop them being activated. This type of equipment can be retrofitted to vehicles and even to foot soldiers.

"We are involved in some niche stuff for saving soldiers' lives," said Steve Cranstone, managing director of Link Microtek. "These include counter measures against road-side bombs and the like, and there is still money available for that. Road-side bombs are the main killer of our troops."

Bigger programmes, he said, though were being delayed because neither the government nor the Ministry of Defence had the money to spend on them.

Protecting our troops

"I think the whole situation will struggle for a while," he said. "Programmes will be delayed if they are not directly related to the front line of protecting troops. There will be a squeeze going forward."

The upgrading attitude has also changed the way modern big systems are being bought. Because of the difficulties found in upgrading some of the older systems, new equipment has to be designed in such a way that it can be upgraded.

"The military have traditionally replaced larger platforms every 15 years," said Beaver. "This won't happen in the future. There will be more COTS procurement, particularly in the electronics area. And everything will have to be to an open architecture and plug-and-play will be a priority."

In fact, some old technology is being thrown away specifically because it cannot be upgraded. And the military are now also taking a more use-and-abandon attitude on even large pieces of equipment because of the cost of transporting them around the world.

"If you buy a vehicle for Afghanistan for example, and then we pull out, why not leave it there?" said Beaver. "It won't be needed in the future, so leave it there or sell it on. In Iraq, we have left a load of equipment for use by their national army."

Changing nature of war

This also means looking at the types of war that will be fought in the future. Afghanistan is a troops-on-the-ground war and the British soldiers have been equipped to deal with that. But in the future, will large items be needed for major state-on-state wars or will more be needed for equipping soldiers in the field? For tackling pirates, large ships are required but are not needed for a peace-keeping force where maybe smaller and more nimble crafts are needed.

"Procurement takes so long, you can't react to both types of event when they happen," said Beaver. "So you need both but we can't afford both and the defence budget will be cut in the next two years. We won't be able to afford the big platforms."

Paul Hill, a general manager at C-Mac Microtechnology, said already military spending was being based on what was happening rather than what might happen.

"We are seeing programmes being driven by actual operational requirements," he said. "I think this will happen more often."

He said though that the normally long procurement times were protecting many in the industry from an immediate effect of the cut-backs but that this situation would not last forever.

"What I am being told is that the military will hold up but there will be an impact and nobody knows what that impact will be," he said. "Programmes are fairly long term so it takes time for things to have an effect."

There are no easy answers and that is why events such as DSEI will be important as they provide an opportunity for all sides to discuss what they can afford and what they can supply.

More dialogue

"DSEI will be hugely useful as it gives opportunities for business to talk to business and it will let the people in the services see what is new all in one place," said Beaver. "We need more dialogue. We need more conversations and fewer hard and fast decisions."

Vicor's Gales added: "This is the first year we have had our own stand. Our distributors will still be there, but we felt it was important to be there in our own right."

One area where there will be growth is in unmanned craft for air, land and sea. Unmanned aircraft are being used in Afghanistan but there are fewer opportunities in Europe because of the already crowded air space. Most of these will also be left in Afghanistan when the troops pull out. However, unmanned sea vessels can be used again for, say, protecting harbours or ships. And in Sweden, nuclear power stations are being protected by intelligent detector systems and they are now planning on having unmanned vehicles on patrol.

"A big cost in defence is people," said Beaver, "and unmanned vehicles take that away. They can do the dirty and dangerous jobs."

Where there is likely to be an increase in military spending is in the security side, protecting against terrorist threats. This is set to grow significantly in the UK in the coming years in the run up to the 2012 Olympics.

"There is no stoppage is spending; it is quite buoyant," said Simon Mathias, UK country manager for Anritsu. "The security industry is really buoyant because of the terrorist threat. This is important in the run up to 2012 to safeguard the athletes and spectators."

But whether this will be enough to offset the cuts in other areas is unlikely, and is sure to be one of the talking points of the conference.

Anritsu | www.anritsu.co.uk

C-Mac Microtechnology | www.cmac.com

Link Microtek | www.linkmicrotek.com

Vicor | www.vicr.com

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