Digitalization of the defense sector

Israel is a pioneer in the field of digitalization. While Germany is increasingly using digital solutions, there is still much catching up to do. This is particularly true in the area of defense. Germany can benefit from close cooperation with Israel in this area.

ELNET promotes a close exchange between the two countries. As part of the annual Forum of Strategic Dialogue (FSD), ELNET invites experts and political decision-makers from Germany and Israel to jointly discuss current challenges and opportunities.

This year’s FSD will take place in Israel on November 15 – 17. With a guest article from the Bundeswehr Cyber Innovation Hub of the German Armed Forces, ELNET provides initial background and highlights the potential of close German-Israeli cooperation in the digitalization of the defense sector.

It is a rumor that digitalization does not hurt. In fact, it has to. Many digital innovations that we use on a daily basis today were born out of revolutionary processes. Entire companies became redundant in a short time and the knowledge they accumulated became worthless. It is no surprise, then, that large organizations often struggle to embrace digital transformation. Therefore, it sometimes takes smaller organizations to model change for their larger relatives. 

Just take the image of a large tanker. It is heavily loaded and can carry a lot of goods from A to B along a set route. This is, where it is really good. But what if a change, of course, is necessary due to sudden events? Making tight turns is not something a big tanker can do very well. But a small speedboat can. It can sail ahead and explore new paths. That is exactly what a digital innovation unit set up by a larger organization does.

In 2017, the Bundeswehr Cyber Innovation Hub (CIHBw) of the German Armed Forces was the first digital innovation unit to be established by a German ministry. It was initiated as a catalyst and driver for digital innovation in the Armed Forces—to complement processes, expand options and potentially look at things from different angles. Our vision of „Empowering Innovation in Defence“ is aligned with the needs of military personnel. We see ourselves as a „do tank“ for our troops. Our task is to develop digital solutions for problems that exist in the everyday life of the German Armed Forces. Oftentimes, technologies developed by startups help us significantly in this endeavor.

One of our greatest strengths is that we are fundamentally fast. It usually takes only three months from the first project idea to testing. After a year, we can then usually say whether we recommend a project for procurement. Since the CIHBw was founded in 2017, we have already launched over 140 innovation projects. 

This pace reflects the new social realities of the 21st century. The digital revolution has increased the speed at which innovations reach the market. At the same time, however, the speed at which decisions must be made in the military sphere has also increased. In this respect, countries with structural problems in implementing digital innovations are especially being forced into action.

Germany, too, faces such challenges. And remarkably, they result in part from the very strengths that have hitherto made the system crisis-proof so far: In many places in Germany, things work exactly as they should. Over decades, an immense amount of knowledge has been accumulated about how to drive processes and keep them moving. Unfortunately, digital innovations are mostly disruptive and challenge precisely this knowledge. New processes take the place of the old, established structures which become redundant and suddenly lose their meaning. 

Just think of the breakthrough of digital photography in the 2000s: The knowledge about the production of chemical films that had been accumulated over more than a century became effectively worthless within a few years. The history of the former global company Kodak is just one example.

At the same time, there is growing pressure from users for them to finally be able to use the new possibilities offered by technologies. Let’s just take the digitalization of administration: Of course, the processes established over decades still work. But when in other countries, administrative procedures can be carried out via an app, analog mechanisms are becoming increasingly time-consuming. In the military sector, there is also a risk that important capabilities cannot be established, despite already existing in other places. 

Often, however, new and old technologies continue to coexist for a long time, seemingly on an equal footing. This is currently the case in the automotive industry. Initially, the first question that comes up is when an exit might be worthwhile. After some time, however, the question becomes: When is it absolutely necessary? Producing both technologies simultaneously does not work in most cases. Because the necessary expertise for structural change cannot be gathered in this way—and because the system tends to channel the necessary capital into the old business models that still seem to work.  

In most cases, it takes an impulse to question long-established structures. And it takes a certain amount of pressure to be able to establish innovations. In the startup economy, we speak of a „sense of urgency“ that makes innovations necessary and ultimately drives them forward. For startups, the sense of urgency arises from the competition with other competitors and the race for new capital. In security policy, a sense of urgency can arise from a critical juncture in the international security system.

Such a juncture occurred on February 24, 2022. The start of Russia’s war of aggression on Ukraine marks a “Zeitenwende”, a turning point in time, as the German Chancellor Olaf Scholz has said. The sense of urgency to modernize the German Armed Forces stems from the changed security policy constellation. We are forced to push ahead with innovations to be able to continue to provide security.

Against the backdrop of this „sense of urgency,“ innovations are taking place at a rapid pace. It is a matter of responding to the external pressures that trigger a sense of urgency. Sometimes, it is necessary to approach the necessary solutions step by step—just as startups experiment, learn from their trials and incorporate the knowledge gained into building new technologies. We therefore do not have time for large-scale projects, which often take decades to develop and are intended to satisfy all stakeholders. Military innovation under a sense of urgency has one primary goal, to satisfy acute security needs and ensure that the system learns to live and grow with this need for urgency.

Against this background, Israel is a good example that can provide us with guidance. Confronted with a sense of an immediate threat for decades, digital transformation has taken place there at an enormous pace, especially in the defense sector. One reason for this was that Israel had to respond to new threat scenarios in cyberspace that go hand in hand with digital transformation. Today, industrially far less developed countries and non-state actors can inflict great damage with cyber weapons. And the more advanced the technology of the target country of a potential cyberattack, the greater the damage can be. But we can learn from Israel not only speed and effectiveness. The defense sector’s cooperation with startups also serves as a model. 

After all, Israel’s world-famous high-tech sector has always been linked to the defense sector, not least through a lively exchange of personnel. The 1970 founding of the Israeli Industry Centre for R&D (MATIMOP) by a commander of the Israeli Defense Forces (IDF), which was merged into the Israeli Innovation Authority in 2016, served as an essential impetus. Today, Israel has the highest startup density per capita. Studies show that in this innovation environment, both military and civilian sectors mutually benefit from each other.

It is precisely this environment and these capabilities that we also need in Germany to drive digitalization in the defense sector. The sense of urgency to do so will be with us for a long time to come.

Author: Sven Weizenegger, Head of Bundeswehr Cyber Innovation Hub (CIHBw)