As a procurement organisation, we have to understand fully what globalisation means for us and for our suppliers. The influence of the civil marketplace and the consequent decline in defence-specific aspects of equipment will change defence companies from being heavy industry manufacturers to being integrators of commercial technologies. The role of the defence company in a globalised industry is to utilise these commercial technologies to produce defence capabilities. It is the clever ways in which these capabilities are integrated that will define a defence company from now on. This is an important step-change for these companies to make. And if we go on placing too much emphasis on the manufacturing component, whether of the naval, land or aviation structures, we could easily condemn our defence industries to a decline in productivity, then in profitability, and we know what that means: good people will not want to work in these industries and our nation's strategic capability will have been seriously wounded. Governments also have a role in removing the obstacles to co-operation between our national defence industries.

To take our organisations with us we have to understand these risks and communicate them to our people so that they also understand the issues.

My own organisation is committed to developing a closer relationship with industry. To do this we have to know their business as well as they want to know ours.

There is also new impetus to start the collaborative process much earlier in a project's lifecycle. The UK is engaged in bilateral discussions with its allies, aimed at identifying common doctrine and concepts that are more likely to lead to genuinely common requirements on which to base future collaboration. Early work on common technical concepts, while avoiding the trap of committing to hardware too early, is just as important.

Restructuring of the defence industry, both within Europe and transatlantic, also should have a positive effect on collaboration. The existence of fewer purely national companies should engender a culture of mutual interdependence among nations. And, above all, as industry becomes more international, there should be less pressure for national workshare.

So I think indications are promising, and we hope to see further progress in the next few years, particularly as big new projects like the A400M transport aircraft and the BVRAAM missile come on line. Each will be procured in a different way, matched to the circumstances of the programme; each will have learned from experience.

These then are what I see as the main issues. Security; reciprocity; interoperability and keeping defence industry at the cutting edge of business in its investors', customers' and employees' eyes. If we do all that right we will have responded to many of the fundamental concerns and will be in a strong position to exploit the opportunities of globalisation. The opposite is also true.

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