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Interview

“The Operating Environment Which Turkey Offers at the Moment is one Which British Companies Find Attractive!”

Issue 94

“The British Army Marches in Turkish Boots”

During the IDEF 19 Fair on 30 April 2019, Mark GOLDSACK Director of the Department for International Trade’s Defence and Security Organization (DIT DSO) hosted a media briefing at the DIT DSO stand in Hall 2 Stand 226A. During the event which represented his first media briefing since taking up his appointment as DIT DSO Director Mark GOLDSACK provided detailed information on the UK’s defence and security strategy for Turkey and replied our questions.

DIT DSO Director Mark GOLDSACK’s Speech 

“I am very glad to be back in Turkey, it’s not my first visit here. Inevitably as an Army Officer I’ve had a lot to do with the Turkish Armed Forces over the years. The last time I was here extensively was working with the Turkish Army when deployed in Afghanistan where I served along side them. So, a long history of working with our Turkish friends. 

I’m delighted in my new post to be able to come to the Show (IDEF ‘19) here and pick up on an extremely important strategic relationship for the UK, not just from the military point of view but from the defence industrial complex as well. And for me to be able to come, talk, learn – most important thing – just what the potential of that relationship is, is fantastic. We have a long history working here, BAE has been, for many years, in joint ventures, and from our perspective the strength of the Turkish Industry – which came out very clearly in the opening ceremony, that surge and desire to invest and to develop and pick up on an indigenous capability here, is all part of how we want to see our own industry develop. And our industry is uniquely placed I think globally because it’s private, because it’s efficient, and because it’s driven by competetive hunger. It has business models that mean joint ventures with the sorts of companies that Turkey is fielding these days, they are extremely viable. I think we, globally, can provide a real market lead from that respect. There’s some very inventive propositions out there from all of the companies that we brought with us, on how we might work together. And I think from our point of view the trick here is to come up with longterm strategic development partnerships in which both sides win. The amount of national treasure that gets invested in these projects, the significance of those projects to our respective countries are really fundamental. So, none of us can afford to waste resources, waste money, waste efforts. And so, we are constantly looking for how we can link up. And where we have really strong healthy military links as we do in Turkey and where you can combine two powerful economies, it really does make sense to seek those joint ventures out.  

So from my perspective, I’m delighted to be back in Turkey. It’s a place I’ve always enjoyed coming, always enjoyed working with the Turkish Army and I’m delighted to be coming back as a civilian this time heading up our defence and security organization. And from my perspective, not just looking at defence, its probably just worth expanding slightly what we are dealing with here, because the defence side is the easiest, the most visible, it attracts the big numbers and the great videos and so on, but there’s a significant amount of activity in the security space as well. 

Cyber, as a subset of that, obviously is critically important these days given how agile most of our common foes are at disabling national infrastructure and so on, but also physical security, fundamentally important when we are facing the range of terrorists threats that we are, across the board. So, there’s a huge amount of work to be done in that space well. So, from our perspective, we are looking, sadly, at a much more destructive world than we did perhaps 20 years ago. Alongside our strategic partners in Turkey, we’re looking at very similar threats, very similar challenges for how we employ and use our defence, security and cyber capacity.

And for us, coming here with I think, some 14 firms on the wider show piece and a good 19 displaying in close proximity here to the UK national stand, that I think is evidence of the seriousness in which we regard Turkey as a partner, and the seriousness with which our firms are looking forward to engaging over the next 2-3 days. I was very struck, this morning walking around initially, at the stands, just the the depth and variety of relationships that have been generated here, and most of it in that most important space of all, which is what you do with intellectual property. How do we actually create design together? Because creating plate metal is fine, but actually the clever bit is can you share the design? Can we work together in that space where you’re looking at a threat and you’re being innovative in how you take it down.

So that’s probably enough opening remarks from me, I don’t know if it gives you a flavor of where we are coming from. As I said, I am excited to be here, and I’m excited to be engaging over the next couple of days with both officials and businesses.”

Defence Turkey: On the Intellectual proprty (IP) side, there’s obviously a strong initiative in Turkey to establish it’s own domestic development but IP is arguably probably the most valuable part of the development. What plans do you have to balance that relationship between building a joint venture and not giving away all the IP or at least protecting the IP, so the company’s investment is safe or secure? 

Mark GOLDSACK: IP lies at the heart of every joint venture, so the most difficult piece to settle when you’re discussing any of these things is exactly how its going to be shared and how in turn its going to be exploited. From our perspective we are very open to innovative proposals. None of our companies are against sharing IP, all of them are looking at how we can, not just work together, but look to third markets as to how we can exploit those together and take advantage of the joint offering that we’re going to put out there. But we should not kid ourselves that its going to be an easy discussion, its not. That piece lies at the heart of all of these discussions and therefore the value of it is reflected in the negotiations that take place and most are very commercial by thier very nature, and that is the company’s business and it would be wrong for me to interfere with that. All I would say is that all of them in my discussions with them have recognized that the way forward in the modern world is to come together in partnerships where that IP becomes shared because when both sides win, you have the most powerful offer, and that’s where we are coming from.

Defence Turkey: How many British companies are participating at IDEF?   

Mark GOLDSACK: There’s 13 in a group and there’s over 20 others. For me, the tell isn’t so much that you have independent company stands here but most of our biggest brands are actually working with a Turkish partner here. So it would be for example, SAP with their joint venture partners here, not demonstrating separately. That’s what I think the significant shift is. The fact that we’ve got these joint ventures up and running and if we are genuinely going to turn those offerings into shared capability, shared projects, that’s, I think, the indicator of success, not so much that you’ve got stand alone statements of separate and independent IPR (Intellectual Property Rights), its that joint piece that we are looking for.

Defence Turkey: At the moment the UK is undergoing the process of Brexit – Do you expect any change in relations in the field of the defence sector after Brexit?  Any measures taken?

Marc GOLDSACK: I’m not going to comment on Brexit, but from a defence perspective, and its a very stable part of the economy, particularly the countries like Turkey or the UAE, the relations will continue as before. None of the joint ventures that we are talking about are affected adversely by anthing that is happening, so I just see it as a movement of strength...  

Defence Turkey: In the Turkish media there was some news about Rolls Royce and BAE Systems having had some difficulties due to IP issues, since BMC, a joint Turkish-Qatari venture, had already taken part in the TF-X Engine Program. Maybe the defence ministries of both countries can take a role in holding and the sharing of IPR on a governmental level to help the program progress smoothly?

Marc GOLDSACK: On that I cannot comment on the specifics of commercial negotiations because I am not privy to that, generically though, I would just say don’t be suprised that these discussions are difficult because the IP lies at the heart of this whole piece. It would take some robust discussions on both sides to work out what is a mutually beneficial outcome from it. And I said in the begining, for me the ideal outcome is both sides walk away with a win from this.  You are never going to get a satisfactory joint venture when one side or the other feels that the IP has gone too far in the other direction. It has to be a shared output at the end of the day. And what you see being reflected in the more public arena, is simply the fact that these are very robust discussions. The offers that the British companies have put on the table are very good offers, they’re sound and we believe there’s a real strength to them and there’s a real voracity to the depth of IP cooperation that is sitting behind that. I am confident that those discussions will continue, and I am sure that over the next couple of days we’ll be having a lots of dicussions about that and I’m looking forward to them, because for me, that’s where the sweet spot lies.

Defence Turkey: The UK has recently launched a new 6th generation jet fighter, Tempest. Would it be possible for Turkey to join the UK’s next generation fighter program?  Some countries already declared their interest to be a partner in that program.  

Marc GOLDSACK: These discussions are on-going, and I look forward to hearing what people have got to say.  The UK is always looking for international partners. I don’t think its any different on the F-CAS piece. And again, if you bring it back to the opening points we were discussing on Intellectual Property, the real question is what are people bringing to the party? If we have substantive, genuine investment and deep research that starts to develop this leading-edge technology in a meaningful way there’s absolutely a discussion to be had there.

Defence Turkey: What kind of collaborations do you think will emerge in the near future between Turkish & UK Defence Industries? 

Mark GOLDSACK: Well if you look at the variety of companies that you come across at this show, there’s a significant number of companies in aerospace. I would be very suprised if you didn’t see some very interesting stuff float up from that.  The discussions have always been ongoing with TF-X the stimulation from discussion from our own Program (Tempest) I think will also provoke some of those disucssions and help us try to map out where some of those relationships can go. So, I would expect a good strong conversation on aerospace. 

Maritime, always an interesting space. We’ve got a large number of companies demonstrating there, not just pure maritime in terms of ships but also the systems and the aircraft that go with them, helicopters and so on, so I think there’s some interesting discussions to be had there. We’ve got some very leading-edge technology there, world beating in fact. So, there’s some interesting opportunities there and again if you bring it back to the purpose of these joint ventures is that everybody should benefit from it. It’s not just about dominating production from one side or the other. So, I think the maritime space offers some very interesting opportunities.

Then in the land space, we’ve got a number of exhibitors with us who have a long history of providing power trains, a lot of the more sensitive ways of deriving availability into activity, and indeed a couple of service companies that also look at how you do test and evaluation, how you drive forward availability in a broad sense, all of which, when you put them together, make for quite a powerful offering to the system. So, I think from my brief walk around this morning everybody is looking forward to really a quite stimulating set of discussions on how we can take things forward.

What we are also looking for in that discussion is a two-way traffic. Because not only are we here selling, we’re are also a buyer in our own right. And I think what you are seeing is the defence market starts to globalize better and joint ventures start to establish themselves, my challenge back to you is where is the Turkish supply chain that we can engage with? Because, when you look, we’ve already got a joint venture which is supplying into us, the British Army, when the Army marches on its boots, what’s it got on its feet? Turkish boots. So, there’s a two-way traffic here that we need to see come to life and so I would encourage you to encourage Turkish companies to approach us, to find those roots into the supply chain. I believe that Turkey has got some really competetive offers to make, those that pair up with our industrial entities. The quality of Turkish engineering, the depth of your labor market, the skill sets of your engineers, are all things that are valuable, and they just need to be brought together. And so, for us we are looking for that two-way piece. It’s not just a one-way trade anymore in this game. It’s absolutely about joint parntership.

Defence Turkey: Do you expect any new joint ventures in the near future?

Mark GOLDSACK: I cannot announce anything now, but I encourage you to discuss with these companies over the next 2-3 days, it is where this stuff is going.  All of these companies have come because they have had engagements with their Turkish opposite numbers that have said to them this is an interesting conversation, this is somewhere we can really do business, and the operating environment which Turkey offers at the moment is one which they all find attractive. So, if you look at the show as a marriage making effort, everybody is interested in linking up. We need from that to have those industrial conversations with one another  to find exactly where those hook ups are sweetest and to pick on those technologies, those projects, those endeavors where, with a reasonable amount of pace, we can create that growing momentum of the stuff that’s already picked up and come along, and I hope over the next 2-3 days to be involved in those conversations and have a very different conversation with you in 2-3 days time once I have been fully educated myself on the potential of the Turkish market.

Defence Turkey: Will you also perform such conversations with the Presidency of Defence Industries (SSB)?

Mark GOLDSACK: Yes, the SSB obviously – but I have a list over 40 companies that I will personally be discussing with – my program is packed, from one end to the other with it. And that is something that I’ve always felt is important because if you don’t cover the ground, you don’t really understand the potential of the market and one of the really interesting bits of this is that there’s a hook up at the OEM level with big companies, they will always find a match. The trick is can those companies that provide cutting edge technolgies, the smaller guys who tend to be the market leaders in what they are doing, can they find lodgings inside those big partnerships where you start to pull through some genuine development, for example there’s a number of people that are offering that design capability into the system and looking at providing very very key subsystems for these projects.  Whilst the top-level piece is fine and they’ll have the big meetings, there’s a large number of smaller companies as well, who in time will grow the next generation of commercial contracts.

Defence Turkey: Where do you see the relationship between the UK and Turkey in terms of Cyber Security? 

Mark GOLDSACK: I don’t think its overstating anything to say that every single government in the world is deeply concerned about cyber security. Its the most fast evolving and the most potentially threatening of any of the things that we face, and therefore every single government I know of is deeply concerned on how to deal with that threat. The things that we do know are that it is very difficult to deal with it head on, on your own, because it’s a global problem, therefore, you need partners to deal with it. And where you’ve got not just a close strategic relationship but deep economic relationships, much broader than defence and we need to look at the relationship between Britain and Turkey not just in terms of the defence relationship, but the depth of the broader economic piece, our interests are absolutely aligned in trying to come up with common protection.  Because we are all threatened by the same sets of cyber destabilization tactics. So, I think for all of us its a really interesting conversation. Its also very different to bring it to life in the open press, because of the sensitivities are such that the technology, the details of the threats, the details of the counters and the solutions and the nature of the discussions taking place. I think it goes without saying that the cornerstone of the strategic relationship is to be able to discuss these things.  Cyber is a strategic issue. It fundamentally affects any government across its whole broad range of operating issues, not just the defence economy piece, certainly not just the military threat piece, so as a strategic threat you require really really carefull strategic relationships to manage it, and its a challenge and all countries look at it and take it extremely seriously.

Defence Turkey: Is it possible for Turkish companies to meet the requirements of the UK Government and the UK Armed Forces? Have these questions come up on the agenda during your discussions with Turkish companies and the SSB?

Mark GOLDSACK: Absolutely, there’s a constant discussion about it. In a previous job of mine, I used to work in our land requirements area, and we were in open discussion 6 or 7 years ago with Turkish companies on supplying into the British military supply chain. So, its a discussion that’s been there for a long time, it’s an established one and the trick of all of these is to make sure that when companies bid in, they’re given the right introduction into the system so they can identify the opportunities in a timely manner and make their pitches accordingly, and my team here on the stand, stand ready to help with that process. They are ready to talk to any company that wishes to export to the UK, to invest in the UK. We are absolutely there to promote that as well. I’ll bring it back to my opening comments.  It’s about a two-way relationship. Defence, security, cyber matter so much to countires, they have to be a mutual relationship. It’s no longer a game of one-way dominance of the other. You have to work together in the space. Otherwise people get frustrated, they don’t get what they need and the amount of national resources that is invested in this space needs to see a return back into the economy.

Defence Turkey: How do you view Turkey’s economic situation? Do you think Turkey’s current economic abilities create sufficient attractiveness for foreign investment and partnerships?

Mark GOLDSACK: The best answer that I can give to your question is you wouldn’t see the 30 plus British companies here if they didn’t think there was a secure investment platform. The companies speak for themselves much better than any government official can. And why? Because they are genuinely private companies. They’re not here because the British Government has told them to be here. They’re here because they can recognize a partner when they see one, they recognize a good investment when they see one and they they’re all having substantive discussions with their Turkish opposite numbers that see a real genuine joint business opportunity out there. So, yep, things are rough in the world now, but it doesn’t mean that there isn’t opportunity or platforms to work in