Speech Gerben Edelijn - 'The Great Defence Debate'

Our CEO Gerben Edelijn spoke live at 'The Great Defense Debate' last Saturday, and emphasized three important points here: Benchmarking, long-term strategy and faster innovation. Interested in his speech? Read the translation below!

"If, as CEO of a major Dutch defence company, you are invited to speak at “The Great Defense Debate”, you can address a number of topics.

I could point out the threats in certain regions of the world, or the threat from new technological developments;

I can point out new areas such as cyber, where a new cold war is raging and where we need to mobilize;

I can name the consequences of excessive budgetary pressure, which means that there is no money for the correct armament of new ships, maintenance budgets for crucial systems fall short, et cetera.

I could get angry and remind you once again of our obligations to contribute proportionally to our security in a European or NATO context.

And as CEO of a company, I can tell you how important it is to stick to your agreements in order not to damage the trust of your employees, customers, partners and the market.

You probably saw this coming: I'm not going to do that. All these topics are known and for several of them there are international security experts who can undoubtedly do a better job addressing them.

In fact, I think that each of the politicians present here would agree with me that the budget for defence must be increased, because we, as a self-respecting country, cannot continue to lean on the strong shoulders of others. Naturally, I would like to help with the formulation of the defense section in the upcoming coalition agreement.

That is why I would like to talk to you today about Thales, the reason why we are a leader in radar technology and why the Dutch maritime cluster is highly regarded internationally.

The figurehead of this success is Nederland Radarland. Next year our collaboration with Defence and the knowledge institutions in the Nederland Radarland will be 20 years old. By means of a targeted roadmap and investments, we are working on technology that will be incorporated into the next generation of products in 10 years' time.

10 years ago, we started to work with the Ministry of Defence to see how we could use this knowledge more intelligently at the various defence units, so that our radars are now not only used by the Navy, but also by the Air Force and the Army.

An example is the long-range radar that is used by both the Navy and the Air Force, but also the radars in the integrated mast on patrol ships and the multi-mission radar of the Army.

Our Dutch market is small. By developing a long-term vision together, we have managed to create scale. Not only for our radar systems, but also for further development and services. Then it enables us to be successful in the export market. This results in a multitude of assignments so that we can again invest in the next roadmap.

Why am I telling you this? Because behind the cooperation with Nederland Radarland are 3 crucial conditions for success. And I would like to share these with you.

First - Benchmark and be transparent

The radar systems that we develop together are the international benchmark. We are regularly regarded out as the best party in international tenders, both in terms of price and performance level.

After all, business is all about benchmarks, or performance comparisons of similar organizations. This is how we determine whether our salaries are in line with the market, whether our financial figures develop in line with the market, whether our products have the right price / performance ratio, and so on.

The industry has the market as pressure. If you fail to perform, you will not receive any assignments and your business won’t survive. However, the government is not influenced by the market in this way and should therefore use the benchmark as a performance indicator. And yet, benchmarks are still only used very sparsely in politics to inform voters.

We spend about 10% of the gross national product on healthcare, 5.5% on education and 1.48% on defence. If you compare this with other EU countries, you will see that we are at the top in terms of healthcare, for example. This is also the case in the field of education. But with defence, we have consistently been lagging behind for the past 20 years, while we do not let the voter know.

Now budget is an input parameter and ultimately it is all about the output. There, too, you can better assess whether we are getting value for money by means of benchmarks. If you look at how our Dutch Defence is performing, you will see that we are quite effective in Defence. They deserve praise for that.

In order to gain public support, it may be good not only to talk about money, but also to tell the voter with whom we want to benchmark and how effectively we perform in comparison with others.

Second - Plan for the long term

Last week, the Perseverance Rover landed on Mars, with a Thales laser on board. This laser melts soil samples to analyze their composition, looking for possible signs of life. In addition, the Perseverance will physically take some of those real pieces of Mars, the soil samples, with it.

That is especially worth mentioning because, for now, we cannot bring the Perseverance or the stored soil samples back to the earth. That technology does not yet exist. But we expect to have that technology in 10 years' time, which is why we are thinking ahead.

This is also how our radar roadmaps work, which we develop together with Defence and knowledge institutes. A ship that we are developing today will be launched in five years and will still have to withstand threats in 30 years that do not yet exist today.

From a political point of view, we have to start thinking like this when it comes to Defence. We already have to aim for a certain future even if there if there are no roads leading to it yet.

You cannot work this way if you only look at the following quarterly results, or the trends of the current political climate. Such a process benefits from long-term cycles, a continuously developing shared vision of threats, the armed forces and the role of industry.

I therefore argue for an innovation agenda with accompanying resources that makes these kinds of developments possible in other areas as well, and does not depend on the budget considerations of the current climate. Especially in the field of cyber defense and other areas where needs, innovative strength and earning capacity meet. That is how, together, we can make the Netherlands safer, stronger and better prepared.

Third - Innovate faster, develop test doctrine

The current method of software development, often referred to as Agile working, is diametrically different from the way in which most defense developments work. We have learned that agile working works very well in certain areas, but also has its limitations for very complex system developments. For example, you cannot develop a Submarine in an “Agile” way. Yet, you can still learn from the current way of development. (Even as a hatter.)

We should no longer want to do everything ourselves - the current toolbox of the SW developers contains a multitude of tools that many craftsmen in the golden age would have envied. By using that toolbox efficiently, combined with the investment capacity of the commercial private sector, the defence market is being overtaken left and right. Technological developments in cybersecurity, digital transformation and quantum computing are developing exponentially, driven by the innovative power of the commercial private sector.

The enormous R&D budget that is being pumped into the market by major tech giants is unmatchable for most governments. Here, Defence depends on outside expertise, technology and operational deployment.

Only by collaborating with industry in new ways can we really make use of the innovative strength and ideas in the chain. Tendering procedures will have to focus more on continuous development and improvement, rather than a set of requirements that have to be realized at a given point in time.

Obtaining more knowledge from industry, more collaboration and therefore allowing for more mistakes is indispensable for innovation and development. Also when it comes to safety. The private sector can really help the government with that.

Our cooperation in Nederland Radarland is an example for other technology areas. It is important that we as government and the business community work and practice together. By specifically selecting partners through a sophisticated selection process, this can be carried out within the tendering conditions.

In conclusion

As I said at the beginning of this speech, I would like to emphasize three points. Benchmarking, long-term strategy and faster innovation. I guess no one can be against these. Benchmarking can better indicate which operational capacity we strive for at what time. The Netherlands cannot continue to squander money in the security field. In terms of long-term strategy, we must consider whether we can make targeted investments in new development areas such as cyber or autonomous systems, in order to become world leaders in sub-areas, just as we already are in the field of radar.

We can still take a step forwards in terms of innovation. Of course, the current budgetary pressure is to blame for the lack of developing new ideas. If there is more room there, I would argue that we should look especially at those areas where there are also opportunities internationally.

Finally, I am concerned about our security and the many threats we see on a daily basis. Together, we’ve allowed our Defence to be minimized. The quality is not what it should be for the world's 19th economy. More money must go to Defence. Defence must also look at how it can use this money to grow its capacity. By working smartly within our ecosystem and our natural predisposition to efficiency, we should be among the world's top ten for safety.

Thank you."