Speech at the Norwegian-American Defence Conference 2014

State secretary Øystein Bø held a speech at the Norwegian-American Defence Conference (NADIC) 2014, in Washington D.C. - "Innovation in Times of Austerity". At the NADIC conference Bø also met with Senator John McCain.

 

*Check against delivery*

Ambassador, Ladies and Gentlemen, Dear Friends,

Good Morning,
Allow me at the very outset to take this opportunity to thank the hosts for the kind invitation. It is a great pleasure and honor to speak at this timely and important NADIC Seminar 2014, Innovation in Times of Austerity.  A fitting title, we are indeed living in times of great challenge.

NADIC has existed for two years, and you are already a success. You are doing an important job in promoting Norwegian defence and homeland security communities, increasing awareness and making yourselves better known to the larger community here in the United States. You are well underway and I would like to commend you on that effort.

The transatlantic relationship and the future of NATO are two areas of key importance to the Norwegian government. We took office last October, and have made it a priority to come to Washington as early, and as often, as possible to make one point absolutely clear: the US is our most important ally. It’s a trusted partnership and we have to build and strengthen it together, respecting and understanding each other’s security needs.

We do certainly not take you for granted. 
Norway and the United States have a long shared history – one that has continuously strengthened our ties. Back home, we have just celebrated our Liberation Day commemorating our common sacrifices during the Second World War. We stood together during the trials of the Cold War. And over the past two decades soldiers of our two nations have fought shoulder to shoulder in demanding operations across the globe; far too often making the ultimate sacrifice.

We should also have a long and shared future – but I am under no illusion that this future is predetermined. We have to define it, frame it, and build it – all allies sharing the burden together. Norway's ambition is a continued strong transatlantic relationship with NATO at its core. I pledge to make every effort to make sure Norway contributes to such a shared future in the best possible way. 

Within the important and complex area of defence and security, our shared future encompasses international operations, training and exercises, research and development and, increasingly so, armaments and industry. Hence, this seminar appears to be on the mark, both in time and substance.
Before turning to the topic of the day, allow me to make some comments with regard to the situation in Ukraine.  Russia’s use of force to redraw borders and destabilize a fragile situation is unacceptable (and Russia has to bear the consequences). Common and agreed rules for state-to-state relations are being challenged. How we manage the on-going crisis may have consequences for a long time to come.

The Geneva accord has not been successfully implemented by all parties. Instead, we have seen a further escalation of the conflict. Pro-Russian militias have not been disarmed and continue to pose a threat to both international observers, as well as to stability inside Ukraine.

Regrettably, Russia has so far chosen the path of escalation, accompanied by a targeted media campaign. The level of rhetoric is damaging to the general atmosphere in Russia and Ukraine. I am deeply concerned with the way the Russian leadership is currently deceiving its domestic audience.

Currently, we are experiencing a serious and worsening situation in Eastern Ukraine. Apparently, Russia is exerting pressure on Ukraine through a strong military presence close to the Ukrainian border. The so called referenda in parts of the Luhansk and Donetsk regions on 11 May were illegitimate, and threaten to deepen divisions in a country facing a civil war-like situation. The international community must support the Ukrainian government’s consistent efforts to hold presidential elections on May 25. It is important that they are as conclusive as possible.

We are faced with a situation in which the post-cold war security order in Europe is challenged. The need for real, and honest, dialogue is greater than ever before, in order to prevent a further deterioration of the situation.

Norway has condemned Russia’s actions. My government is determined to further follow up if new restrictive measures are being adopted.

NATO has over the years consistently shown its relevance as a political consultative forum, based on common values, - values that foster cohesion and solidarity in time of crisis. NATO's quick, coordinated and relevant response to the crisis in Ukraine is possible because all Allies share these common values and principles.

The Alliance has already taken immediate reassurance measures that demonstrate the credibility of our collective defence capability and deterrence posture. We have deployed capabilities at sea, in the air and on land, enhanced exercises and re-enforced defence plans. I am proud that two of the vessels in the Standing NATO Mine Counter Maritime Group currently deployed in the Baltic Sea, are Norwegian - including the command vessel.

NATO’s resolve and ability to provide reassurance to Allies is a fundamental part of the NATO’s core tasks.  As a key element of Alliance burden sharing, we must, both collectively and nationally, ensure equal and undivided security to all NATO members.

As follow-up measures Allies are considering how NATO can further bolster its defence capabilities, increase its preparedness and readiness, and further develop credible operational capabilities, including through enhanced training and exercises. We are grateful for the active and regular US participation in exercises as Cold Response, and aim at continuing providing new opportunities for exercises in Norway.
Ukraine has definitely focused our minds, not least on the need to maintain a strong defense and a competitive and innovative defense industry.

Allow me, therefore, to turn back to the issue of the day - Innovation in Times of Austerity and address some issues and policies that perhaps are closer linked to the defence industry – both US and Norwegian - present here today.  The Norwegian defence industry may not be among the largest, but it is, I dare say, technologically advanced and competitive within a number of areas. 

Norway is a nation of five million people, and our resources in absolute terms are fairly limited. Nevertheless, in recent years, our industry has been investing heavily in both innovation and endurance. This has paid off, and resulted in significant growth, both in magnitude, scope and technology. It would, however, not have happened if our industry was not regarded as highly competitive and reliable partners. 

New markets have developed in Asia and South America, while the more traditional markets in Europe and North America have been consolidated. This has largely been achieved through innovation, development of technology and the ability to stay the course - giving way to competitiveness and gaining market access.  These are qualities that are valuable to any enterprise, particularly when clearly defined and applied in a long-term perspective. 

Although there are still considerable challenges ahead of us, in particular with regard to market access, I believe it could be argued, without being accused of exaggeration, that Norwegian industry has proven adept at entering the US market. Nammo’s co-operation with Raytheon on AMRAAM has been a great success, and their joint achievements are indeed impressive. The further potential for this joint effort is substantial, and we are looking forward to its continuation.  Kongsberg’s sales of NASAMS, Air Defence Systems, and PROTECTOR, Remote Weapon System, to the US are equally important, both great examples of Norwegian innovative strength and technology complementing US industry.

Success stories like these bring Norway to the world. Yet equally important, they bring the world to Norway. Today, Norwegians move abroad to work for Nammo, Kongsberg and others internationally, while engineers from the US, India and France, to name a few, come to work for our industry in Norway. The global marketplace is taking hold world-wide, and for the most part that constitutes a positive trend.
Still, looking beyond the obvious successes of recent years, there is no shortage of challenges facing the defence industries on both sides of the Atlantic.

The significant reduction in defence spending among allies and partners, particularly in Europe, is already leading to structural cuts and reduced investments in new systems.

We seem to be facing continued uncoordinated cuts in Europe, reinforcing dependence on the US when Europe should take more responsibility for its own security. One could ask, do we run the risk of determining our security ambitions based on budget levels, and not on the security challenges at hand?
Development has, quite predictably, led to a more demanding market, in which nations increasingly favour their own industry. It appears that two trends are colliding; on the one hand, the need for cheaper, and more accessible materiel, on the other, increased protectionism and the need to secure national industry.  Thus, it could be argued that the defence industry stands out in several ways; it is largely closed, it is governed politically, rather than by normal market mechanisms, and it operates with strong national ties.

We are also witnessing technological developments leading to steady cost increase for modern defence systems. This has made the industry increasingly pooling and sharing their resources in developing new defence materiel, nationally as well as internationally, sometimes leading to restructuring of the industry across national borders.

Hence, we are currently in a situation calling for new ways to secure our defence industry.  In this demanding climate, we are compelled to apply creativity in bringing innovation and resolve.  The Norwegian government is concerned with the conditions under which the Norwegian defence industry operates. We aim to maintain and further develop a competitive industry.

The Norwegian MoD and Armed Forces will continue to support and promote our defence industry. We will continue our efforts to open doors towards authorities in other countries, such as here in Washington.
Still, an even more important task will be to continue promoting a “level playing field” in the defence market. Fair competition and best value are key in this context. International defence market competition is a condition for technology development – as much as it is a key driver to keep the cost level down.

The US and Norway have adopted two bilateral agreements aimed at facilitating armaments co-operation and promoting reciprocal defence procurement; the MOU, Memorandum of Understanding, from the 1970s, and the DOP, Declaration of Principles, from 2002.  These agreements illustrate the close ties between us. It is my hope that they will continue to pave the way for open armaments co-operation and trade. I am therefore pleased to note that Norwegian companies are being increasingly accepted into competition in the US market.

In times of austerity, to quote the title of the conference, we must co-operate closely, be it on research and development of armaments and industry.  It makes sense to us all to make use of the resources at hand. Norway is sincerely advocating an open market. We can argue for openness with credibility, as our market is indeed open.  As many of you know, we import approximately 70 per cent of our materiel and services, of which a greater part comes from the US. 

I have been speaking a lot about technology and equipment. But I also need to emphasize the importance of capable and well trained personnel. A former Chief of Staff of the Norwegian Army put it this way: It is not about equipping our soldiers - but about manning our equipment. This must not be forgotten. Without dedicated and professional personnel, we are nothing.
Before closing, allow me to elaborate on some of the most important elements of the US-Norway partnership.  Norway stands up to its obligations, as is well demonstrated within the F-35 Program. The Norwegian procurement plan for 52 aircraft remains firm, and we have already obtained parliamentary approval for acquisition of the first 16 aircraft. We are fully committed to the program and recognize the value of the F-35 partnership. We are among the European countries with the highest number of F-35’s. It is our expectation that this will be reflected in the development of the industrial solutions.

Norwegian industry has proven adept on a number of occasions in many different areas. Nammo’s development of the APEX-ammunition shows the ability to combine technological skill with operational needs. As you all know Kongsberg is developing the JSM, Joint Strike Missile. I am pleased to announce that the US Institute for Defense Analysis recently completed a Technological Readiness Assessment. This thorough assessment confirmed that the missile has reached the technological maturity planned at this stage. JSM is now in its final stages of development. When integrated on the F-35, the JSM will provide the aircraft with a unique long range air-to-surface capability. Personally, I strongly believe that there is no better or more capable such missile on the market, or developed today. For us the JSM is deemed necessary for the F-35 to deliver the operational capability we aim at.

Dear friends,
While I'm well into bragging, let me also mention that Norway, for the very first time, is going to participate in the Rim of the Pacific-Exercise – RIMPAC, with a Fridtjof Nansen class frigate. The Frigate left Norway yesterday, and will visit US ports before and after the exercise. Our participation in RIMPAC is a clear signal and commitment, that we take cooperation with our closest ally seriously, also beyond the Euro-Atlantic area. In addition the exercise will be an opportunity to observe a live firing of the Naval Strike Missile. For the Norwegian Defence industry this will be a unique chance to demonstrate its technology.

In concluding, I would like to underline the importance of NADIC and this conference. I sincerely thank NADIC for providing a venue like this, in which representatives from industry and government, both from the US and Norway, can exchange ideas and look for new opportunities. I hope you all make use of this opportunity and that you come out of this day, not only having met new colleagues and upgraded your knowledge, but with a sense of having been part of a session built on real partnership and friendship between two close allies.

 -I wish you all the best of luck for today’s seminar. 
Thank you for your attention.