It's a passive buff that applies only to that Sova (passive means once you upgrade that ability it is always active).

It increases the physical damage of it's squads by 12/24/36% and increases the armor of it's attached squads by 2/3.5/5 (numbers are per level increases).

The only TEC capital ship ability that is affected by research is the Sova's missile platform (which gains the benefit of hull, shield, armor, and missile damage upgrades).  All capital ship abilities are fully functional without any research, though some aren't very useful until later in the game.