Government closeup: Tokyo transfer to the rescue?

Electronic News, June 15, 1992 by Jack Robertson

TOKYO--After years of a technology mating dance with Japan, the Pentagon has received its first transfer of know-how from the Japanese: a digital flight control system for P-3C aircraft.

Full details haven't been revealed yet, but digital flight controls are not an area where the U.S. is lacking. At least Honeywell, Rockwell International/ Collins, Allied Signal, Hamilton Standard and many of the military aircraft builders would be surprised to learn they needed help from Japan.

Any technology transfer is better than none. Thee Defense Department and Japan have been discussing an exchange for so long that the digital flight control data at least breaks the logjam. Hopefully, it won't take as long to get the next technology transfer.

The lone technical swap from Japan under the formal DOD-Japan program must be put in perspective. The U.S. military and defense contractors get massive amounts of technology from Japan--they buy it off-the-shelf in the form of semiconductors, displays, computer peripherals, etc. The B-2 Stealth bomber uses non-electrical reflecting paint from Japan--bought on the open market for the once super-secret aircraft.

This isn't totally a benefit for Uncle Sam. The growing U.S. military dependence on Japanese electronics has been a serious concern of the Pentagon, ever since the Defense Science Board first highlighted the problem in a study a half-decade ago. It has only become worse since then, concedes Norman Augustine, chairman of Martin Marietta, who headed the landmark DOD study.

The U.S. wants Japan to share some of the technology behind the products that enjoy such lucrative sales to the American arsenal. The Pentagon over the years has opened the way to transfer U.S. military technology to Japan so contractors here can co-produce the latest American weapons.

In fact, the first defense technology swap from Japan comes off the Japanese-built P-3C antisubmarine patrol plane-a project where airframe and avionics technology has been heavily transferred to Japan so it could be built in Japan.

Trying to get two-way traffic in technology transfer took on some urgency after the FSX aircraft flap. The pentagon was set to turn over leading-edge data on the front-line U.S. F-16 fighter so it could be built in Japan. Never mind that the F-16 is one of the hot American arms export items--and setting Japan up in business created a potential powerful competitor in a world market already over-crowded with sellers.

Congress stepped in to force Japan to buy far more product and less technology in the FSX deal. The General Accounting Office also issued a report charging Japan is reneging on sharing any technology it added to the FSX, which it promised to transfer in the deal.

There is a second lesson to be learned in the tortuous Pentagon-Japanese technology transfer negotiations: governments are poor mechanisms to arrange such exchanges. At least the U.S. government is. Pentagon bureaucrats don't always have a commercial grasp, don't always appreciate the sometimes dramatic market implications of the deals they are trying to make.

The best chance of success in global technology transfers are with industry deals. Yes, even in cross-border industry exchanges, one slick negotiator can sometimes take the other side to the cleaners. But, usually, companies aren't in the technology charity business and try to work out quid-pro-quo deals benefitting both sides.

U.S. firms quite often work out mutually beneficial foreign deals, only to run into agonizing DOD delays in deciding whether to approve the technology transfer. The irony is not lost on contractors, seeing DOD giving away the store in signing some of its own technology transfers, and on the other hand subjecting industry-signed deals to prolonged scrutiny and challenges.

Meanwhile, the two Pacific allies should do everything possible to avoid creating yet another contentious issue in defense technology sharing.