How NATO Works with Industry - The Samuel Associates Advantage

In the lead up to the Vilnius Summit (July 11-12, 2023), the private sector’s importance to NATO came into sharp focus. From the provisioning of “cybersecurity support” to refilling arsenals, observers commented on some of the ways that partnerships with the private sector can help the alliance and its members fulfil NATO’s mandate. But what is the significance of these partnerships for the private sector? This essay considers three functions—buyer, consultative partner, and incubator—that NATO serves for the private sector.

Buyer

Procurement is one noted avenue through which industry and NATO interact. The alliance is a major purchaser of goods and services, with several buyers and procurement bodies. NATO’s Communications and Information Agency (NCIA), for instance, handles “developing, procuring and through-life support of Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Capabilities for NATO.” NATO’s Support and Procurement Agency (NSPA), on the other hand, primarily works “to assist NATO nations by organizing common procurement and supply of spare parts and arranging maintenance and repair services necessary for the support of various weapon and other systems.”

Entities like NSPA, deemed “NATO’s principal logistics support and management agency,” depend on the private sector to fill the varied needs of its customer base, which includes member states and partner nations. Browsing NSPA’s ever-changing portal reveals requests for proposals (RFPs) on assorted items. An array of firms bid on these RFPs. Reportedly, the firms “actively doing business with NSPA’s customers” total 10,000. However, the number of registered firms exceeds 60,000.

In monetary terms, NSPA buys a considerable amount every year through these transactions. The sum totalled “CAD $6 billion (EUR 4 billion) worth of goods and services annually on behalf of NATO nations,” at least in 2019, when the website containing these figures was last updated.

Consultative partner

NATO also consults with the private sector on contemporary challenges, enabling industry to offer input on the alliance’s agenda. Indeed, the “Framework for NATO Industry Engagement” states: “Industry should been seen as a partner in innovation and strategic thinking and, if required by nations, as a possible source of advice on business models and potential solutions during pre-procurement activities in respect of principles of transparency and equality of opportunity.” In this spirit, the Vilnius Summit Communiqué hints at the value of industry-NATO cooperation, mentioning that the alliance envisions consulting with the private sector on safeguarding “undersea infrastructure” and “cyber defence,” as some had recommended.

NATO has established channels for engaging on such issues. In fact, the “Framework for NATO Industry Engagement,” which was released in 2013, has sought “to improve the way NATO engages with industry in a mutually beneficial, coherent and transparent relationship for harmonization of capability requirements and solutions through existing NATO-Industry arrangements and bodies.”

The noted “arrangements and bodies” are extensive. The “Framework for NATO Industry Engagement” lists five “NATO Committees” in which industry participates. Among these, the NATO Industrial Group (NIAG) is long-lived and particularly influential. Founded in 1968, this “high-level consultative and advisory body of senior industrialists of NATO members countries, acting under the Conference of National Armaments Directors (CNAD).” Along with other functions, NIAG extends “industry’s advice to CNAD on how to foster government-to-industry and industry-to-industry armaments co-operation within the Alliance.”

In addition to consultative bodies, industry and NATO have other avenues for interaction, including various alliance-sponsored events. Some of these occur regularly. Each year, for instance, the alliance hosts the NATO-Industry Forum, which offers another touchpoint for the private sector and NATO to dialogue about common priorities. Conversely, the “NATO-Private Sector Dialogues”(2020-2021), which was a collaboration with GLOBSEC to solicit industry’s input on a slew of topics, concluded after six sessions.

Incubator

Additionally, NATO helps the private sector incubate ideas regarded as crucial to the alliance. NATO is especially keen to support innovation on emerging and disruptive technologies (EDTs), encompassing “nine priority technology areas,” including artificial intelligence (AI) and quantum. To this end, NATO has advanced a host of initiatives, most notably the Defence Innovation Accelerator for the North Atlantic (DIANA). Adapting the broader accelerator model to the NATO context, DIANA exists, in part, to facilitate “competitive industry challenges” that could yield “deep tech, dual-use technologies” with relevance for the alliance and its members.

The DIANA initiative buoys participating innovators through various supports. These include receiving funding as well as the opportunity to utilize “10+ accelerators” and “90+ test centres” and work with experts. Crucially, too, participants secure “pathways to market within the NATO enterprise and 31 Allied markets.”

The distinct but related NATO Innovation Fund (NIF) contributes to incubating innovation. The NIF, which pools €1 billion from 23 members of the alliance, helps to amplify DIANA’s efforts by providing necessary start-up capital to selected innovators.

Takeaways

Clearly, trends and developments within NATO have relevance for the private sector. NATO procures high-value goods and services from industry, consults with industry to identify solutions to common challenges, and supports related innovation efforts among private-sector actors. For these reasons and others, the private sector should follow developments within NATO closely and look for opportunities to work together to address shared goals.

Samuel Associates can help your firm make sense of these trends and identify potential synergies between NATO and the private sector. We are a leading authority on relations between NATO and the private sector, with the Policy Insights Forum, which is part of the Samuel Group, helping to facilitate NATO-Private Sector Engagement (NPSE), an annual, multi-day event on the subject. To start a conversation about how your firm can work with NATO or participate in NPSE, book a consultation.

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