Center for Strategic Decision Research

P

 

The U.S. Technology Transfer System

Vice Admiral Norman Ray
President, Raytheon International Europe


APPROACHES TO TECHNOLOGY TRANSFER

Iam going to talk about the problems both industrialists and those who are not industrialists face with the American technology transfer system. The American technology assurance system is driven by considerations not only for the security of the United States but for that of friends and allies. It is a system designed to insure that when American technology is transferred it creates a net benefit to the security of the United States or its allies. Working with this system the United States, if I can speak for the United States, does not view itself so much as an arms exporter as a security exporter. That is what I call the high-road approach.

Some who use the system, however, take the low-road approach, as is perhaps inevitable. A number of players, not the least of which are the armed services, believe in what I call the crown jewel argument of security technology transfer, which goes something like, “That’s my crown jewel, I paid for it, I am the best in the world, and I intend to be the best in the world simply because I want to be the best in the world.” That is the very narrow-minded low-road approach with which we have to contend.

There is also what I would call the invisible road. That road is the political lever the technology transfer system provides—to the United States vis-à-vis foreign governments to use with the Congress of the United States, the Department of Defense, and the armed services.

Using these three approaches, technology transfer is here to stay. It has a tremendous number of constituents who see some very important benefits from it, some of which are very altruistic and very important to global security and others that are more narrow and of a more political nature.

THE TECHNOLOGY TRANSFER PROCESS

But technology transfer is not an event; it is a process practiced in the United States. The actual disclosure part of technology transfer takes place in the Department of Defense, and for something significant it can very often take as much as two years. That is two years after you have worked with an American company to seek a disclosure or after you have formally requested that disclosure from the United States. And then once you get permission to sell something, you have to go to the Department of State to get a license, which could take four months, and then you have to give congressional notification, which can take many more months. So the whole process is very long, but as Ambassador Giovanni Jannuzzi, a former Italian representative to the North Atlantic Council, once said famously, on a different subject, This is tragic but it is not serious.

I think that what Ambassador Jannuzzi said is true if you examine closely the technology transfer problems we live with. If an Allied customer wants American technology in a certain area because he really wants to have that capability and the security that goes with it, and if an American industry interest really wants to sell it, meaning that it does not think it would erode our commercial advantage if we transferred it, then we would sell it and we would all be very patient. I do not think there have been many times when the United States did not ultimately transfer an appropriate technology, so the situation is usually tragic but not serious.

If some of you think that I am describing a victimless crime, it is not. First of all, obviously, it is not a crime. The industry point of view may be “Poor us,” we are victims of this as businesses, because the long timeline and the difficulties with requirements very often greatly complicate our ability to be competitive. To be competitive, we have to come to market at the right time and in a timely way and we have to be flexible in terms of meeting customer requirements. At a glance, the technology transfer system greatly complicates our ability to be a good provider to our international customers and also complicates our ability to plan. Why is that important? Performing to plan affects our stock price, which is important to us and to our stockholders. So in a small way those in business are victims.

Those who are not in business also suffer from difficulties with technology transfer. They suffer because they are trying to increase their capability in some area and the fact that it takes so long to get there slows their ability to progress, and their capability is probably less than it might be otherwise. This, of course, complicates their strategic thinking and their joint operations because it complicates their ability to work jointly.

It also very much complicates political harmony among Allies. Recently, there was a tremendous amount of noise on the network regarding the erosion of sovereignty associated with certain cooperative projects that require technology transfer. This is political friction we really do not need in the face of the current challenges we have been discussing. We also do not need the damage that can be done when we have to develop a system from scratch in the face of certain countries’ R&D limits or when a certain technology cannot be transferred to a country because it does not satisfy either its requirements or its technology industrial base growth and viability requirements.

MAKING TECHNOLOGY TRANSFER FASTER AND MORE EFFECTIVE

To solve these problems, industry needs to work the process in the United States. We have to work very early with the armed services, with the State Department, and with the Department of Defense to satisfy all the questions that are necessary to gain disclosure. I said that took up to two years, but we can greatly shorten the time if we in industry do our jobs better. We can do a very good job of explaining what it is we are trying to transfer and thinking about how we can transfer it in a way that is better designed to satisfy U.S. security issues. But we also need to work with you to moderate your expectations. By that I mean that too often we market things to you that we sincerely know we are going to have real problems transferring. We ought not to do that; ultimately it is foolish and counterproductive.

You on your part need to include us in your requirement discussions as soon as you identify the possibility that you might need an American partner. The sooner you do that, the faster we can move through the United States’ system and the better we can satisfy all parties. You also need to keep pressuring the United States government, because if you do not, the process slows down, I can assure you. And last, you have to be serious, because nothing gums up the United States’ system more than having various international companies or governments seeking technology transfer of things that they are really not serious about buying or operating.

Finally, I want to remind you that technology transfer in the context of international relations is a symptom, not the disease. It is a symptom of striving for security in an atmosphere in which we have not yet achieved full trust in one another. Despite this, NATO has a very strong record of success in technology transfer—the United States has transferred tremendous amounts of technology throughout its long period of successful Allied association. There is no reason for despair, there is no reason to think we cannot do better. We can do better. Growing confidence is both a journey and a habit and I know of nothing better than increased confidence to facilitate transfer and to open markets on both sides of the Atlantic through partnerships that facilitate non-U.S. access to the U.S. market and vice versa.


 

Top of page | Home | ©2007 Center for Strategic Decision Research