Opening up: Interview with James Baker, BAE Systems

When BAE Systems is talking about 'open innovation', others listen. Paul Fanning finds out more.

Openness is not a concept most would normally associate with the defence industry, which is why it is a surprise to hear a senior figure at the UK's leading defence company to be hailing it as the key to ongoing commercial success. That, however, is exactly what James Baker, managing director of BAE Systems' Advanced Technology Centre is doing by advocating what he terms 'open innovation', a philosophy that relies on greater collaboration between companies like his, SMEs and academia, using a greater preparedness, sharing technologies and expertise to arrive at a more efficient and cost-effective end result. In advocating this, Baker is well aware that he is running contrary to many of the traditions of the defence industry. He says: "Defence used to be very much what I'd call a 'closed innovation model'. If the UK decided it wanted a fighter, it had to be UK, not American. So we'd have to develop the intellectual property from scratch and then exploit it in programmes for products that only the UK would buy. The model was that the customer wanted it and we'd supply it to them and only to them." However, this business model, says Baker, is "bust". A declining defence budget, a shrinking number of defence platforms allied with over-commitment to those existing platforms has forced companies such as BAE Systems to explore other avenues. "That closed model was based on defence leading the way and driven by a model that effectively funded research to keep the leading edge," he says. "Today, that model has changed. Our model is now about leveraging commercial technology – whether in the supply chain for automotive, telecomms or academia – and looking at how we can exploit that for the benefit of defence." Baker offers a number of examples of how this has worked. One was on the Wildcat autonomous vehicle project where, rather than employ a highly sophisticated (and expensive) camera from the USA, BAE adapted a collision avoidance sensor from a Mercedes, 'rewrote' the electronics and, as he puts it, "the Wildcat suddenly had a collision avoidance sensor that was better than the one on the Mercedes because it was longer range, was fit for purpose and was done quickly. It can now recognise things like potholes, fences and – with that additional capability – it can go back into the supply chain and offer more capability for the automotive sector." Another example is a partnership between BAE and Visteon, the manufacturer of automotive components. Says Baker: "We really understand displays, high-end electronics and military-standard areas. They really understand, low-cost, high-volume manufacturing. We take that high-end challenge from defence and they help us to make it in large volumes for low costs." Such partnerships, admits Baker, do have clear pitfalls. One of these lies in the question of IP, which, he accepts, has to be shared in such collaborations. However, as he puts it, "100% of nothing is nothing. If we have to share some of the IP to get the right solution, then so be it. There are many examples of fantastic intellectual property that's been developed in the past, but it's not been exploited and not reached the market. For me, the key is exploitation, not the actual ownership of the IP." Another more immediate problem, he believes, lies in the difficulty of maintaining necessary levels of secrecy while also explaining the need for a solution to external partners. He offers an example, saying: "One of the biggest challenges at the moment is counter-IED technology. Naturally, the MoD is very reluctant to share with the public what its vulnerabilities are or what the threat looks like. The MoD wouldn't publish the weakness of the vehicles, but what we can do – as people that are trusted – is be told what the vulnerability is and go into the market and without sharing the problem, take a commercial technology and 'chip it'. Do something different with it that makes it more capable for the purpose we have in mind. So we get all the benefit of that investment, that leverage and low cost and can then licence or sell that back into the supply chain, which makes the product more capable for the market." For all the apparently high-flown talk, Baker is keen to make clear that 'Open Innovation' boils down to something very simple, saying: "I've got a problem and the solution is out there somewhere. I need to find a way of sharing that problem, connecting to the supply chain and creating the right partnership, thus allowing us to do things much more quickly and effectively than if we do it purely ourselves. You just can't work in isolation anymore." • See June's issue for a more detailed article on the work of BAE Systems' Advanced Technology Centre