The mission of the 5,000 people in the Defence Procurement Agency is to equip the armed forces. This is simple, direct and challenging. It costs £6 billion of tax payers' money each year to carry out this mission and anything that has direct implications for it is important to me. Globalisation has such direct implications. We need to manage the issues it raises and we need to take every opportunity to discuss them.

There are three key questions: What does globalisation mean? What needs to be done? How are we going to do it? By we, I mean both national governments and the business community.

I believe this is right, I agree with the view that globalisation is not a policy option but a fact to which policymakers must adapt. That is what the competitive market, something in which I believe passionately, means. I am sure this will come as no surprise, although many believe that the pace of our institutional adaptation is too slow. The truth is one does not often meet people who suggest the pace of change is too fast unless they are the actors in the drama!

What does globalisation mean?

The classic definition, that it is the integration of the political, economic and cultural activities of geographically or nationally separated peoples together with the flow of goods and services, materials, capital, technology (know-how and equipment), information and people across borders is true enough but very dry. From my perspective globalisation means a fundamental shift in the environment that produces and sustains the potential suppliers with whom I do business.

First, there is the increasing influence of the civil sector in the defence industrial supplier base, driven by substantial levels of high-tech research and development investment, not least for the consumer market. In parallel, advances in weaponry are driven more and more by the development of commercial technologies such as digital communications and microelectronics. This means that weapons factories and research laboratories must be less isolated from the mainstream economy than they used to be. The consumer market is not just about high technology, it is about high technology that works first time, every time, subjected daily to a huge and demanding army of customers who have the critical advantage of choice. If it does not work or it costs too much or nobody wants to buy it, the product vanishes with its creators. The black museum of commercial failure has no shortage of grim exhibits, from the Ford Edsel to the Sinclair C5, the eight-track cassette and quadraphonic sound.

Second, there has been a fundamental shift because defence companies need to develop new markets. Defence globalisation has in part resulted from the decline in home markets. The cake has to be enlarged. Greater access to defence markets, in both de-regulation and reciprocity, holds the key.

The final, and arguably the most important, driver for change underlying the globalisation process is the information revolution. Gaining intelligence; taking decisions; hitting the target; reviewing the position. Doing this in the defence field is the greatest information systems challenge on earth and we must harness the best that is available in the civil market place.

But the information revolution also has relevance to the acquisition process, putting together multiple customers and multiple suppliers in a genuinely neutral electronic market place. A click on a mouse button and purchases can be delivered to any chosen door. Or so suppliers claim.

This is the backdrop against which my organisation is operating.But all these opportunities bring a number of concerns, and security, so often the Achilles heel of defence systems, is uppermost. There is a trade-off between widely available civil technologies and the need to protect those technologies where they generate a sensitive and strategic capability. We are also acutely aware of the risks posed by criminal or other malevolent attacks on global information systems via the civil sector.

Security of supply is also an issue. A significant effect of the increasing influence of the civil sector in supplying critical high technology components and sub-systems is the realisation that a captive national industrial base to supply these products no longer exists. Companies are spread far and wide, many cutting-edge software firms are offshore, no longer needing to be physically close to their customers. Even the US will have to adapt, just as we in Europe are doing, when it can no longer offer a choice of national competitors across all capability categories.

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