The decline of US mil­i­tary in­no­va­tion

Financial Mirror (Cyprus) - - FRONT PAGE -

The United States is at risk of los­ing its mil­i­tary edge. Amer­ica’s armed forces may still be the most ad­vanced in the world; af­ter all, the US spends more than twice as much on mil­i­tary re­search and devel­op­ment as ma­jor pow­ers like France and Rus­sia, and nine times more than China and Ger­many. But Amer­ica’s con­tin­ued tech­no­log­i­cal lead­er­ship is far from as­sured.

Since 2005, the US Depart­ment of De­fense has cut R&D spend­ing by 22%. In 2013, as part of a deal to avert a show­down over the debt ceil­ing, the US Congress man­dated some $1.2 trln in au­to­matic spend­ing cuts. The move, which re­quires re­duced spend­ing in nu­mer­ous pro­grammes, in­clud­ing many de­fense re­search ini­tia­tives, was de­scribed by US Pres­i­dent Barack Obama’s ad­min­is­tra­tion as “deeply de­struc­tive to na­tional se­cu­rity.” If US de­fense in­no­va­tion con­tin­ues to erode, not only will Amer­ica’s de­fense ca­pa­bil­i­ties suf­fer; the coun­try will also risk slip­ping in terms of com­mer­cial in­no­va­tion and com­pet­i­tive­ness.

Bud­get lim­i­ta­tions pose some of the great­est chal­lenges to the US mil­i­tary’s ef­forts to main­tain its tech­no­log­i­cal edge. The Army and the Mis­sile De­fense Agency have been par­tic­u­larly hard hit, with R&D spend­ing nearly halved since 2005. The Navy’s re­search bud­get has been cut by some 20%, and the De­fense Ad­vanced Re­search Projects Agency (DARPA) – the or­gan­i­sa­tion tasked with keep­ing the US mil­i­tary ahead of the tech­no­log­i­cal curve – has had to slash R&D spend­ing by 18%. Even the Air Force, where re­search spend­ing has tra­di­tion­ally been a con­gres­sional pri­or­ity, has been forced to cut its bud­get by roughly 4%.

When money does get al­lo­cated, cost pres­sures too of­ten en­cour­age in­vest­ment in projects that prom­ise quick re­sults – a bias that comes at the ex­pense of long-term in­no­va­tion that could pro­vide a strate­gic ad­van­tage. Even DARPA has fallen prey to pres­sure for re­search that can demon­strate im­me­di­ate progress.

To make mat­ters worse, the US mil­i­tary’s in­no­va­tion ef­forts face sev­eral struc­tural prob­lems. Six decades of at­tempts to re­form the de­fense ac­qui­si­tion process have yet to yield fruit. Most of the de­sign, devel­op­ment and pro­duc­tion of mil­i­tary sys­tems is car­ried out by civil­ian in­dus­try, but de­ci­sion-mak­ing re­mains firmly in the hands of mil­i­tary of­fi­cials, who may not be able to strike the right bal­ance be­tween cost-cut­ting and in­no­va­tion.

Ri­val­ries within and among the mil­i­tary ser­vices once mim­icked the role of com­pe­ti­tion in the pri­vate sec­tor: they drove in­no­va­tion. But with the end of the Cold War, the pres­sure to re­main a step ahead has waned, de­priv­ing the de­fense sec­tor of a cru­cial en­gine of progress. More­over, top de­fense con­trac­tors’ R&D spend­ing as a pro­por­tion of sales plum­meted by nearly a third from 1999 to 2012. By con­trast, Amer­ica’s tech­nol­ogy gi­ants in­vest 4-6 times as much in R&D.

Mean­while, the US is suf­fer­ing from the hol­low­ing out of its de­fense industrial base. In­creased com­pe­ti­tion from China and other large emerg­ing economies has eroded US man­u­fac­tur­ing ca­pa­bil­i­ties, jeop­ar­dis­ing Amer­ica’s abil­ity to de­velop the most tech­no­log­i­cally so­phis­ti­cated de­fense plat­forms. The de­fense in­dus­try once cre­ated the new tech­nolo­gies – lasers, GPS, and the In­ter­net, for ex­am­ple – that helped drive the Amer­i­can econ­omy. To­day, in most fields, civil­ian tech­nol­ogy is likely to be lead­ing the way. The re­sult can be seen in the rise of for­eign com­pe­ti­tion in the in­ter­na­tional arms mar­ket. Amer­i­can man­u­fac­tur­ers are find­ing them­selves in­creas­ingly vul­ner­a­ble in ar­eas that they once dom­i­nated – in­clud­ing un­manned aerial plat­forms, in­tel­li­gence sur­veil­lance and re­con­nais­sance, mis­siles, and satel­lites – as low-cost com­peti­tors gain mar­ket share. In 2013, Rus­sia’s weapons ex­ports sur­passed Amer­ica’s by more than $2 bln.

In Novem­ber, US De­fense Sec­re­tary Chuck Hagel an­nounced a new ini­tia­tive to “sus­tain and ad­vance Amer­ica’s mil­i­tary dom­i­nance for the twenty-first cen­tury.” In a time of shrink­ing bud­gets and shift­ing strate­gic chal­lenges, he fo­cused on in­no­va­tion. “Con­tin­ued fis­cal pres­sure will likely limit our mil­i­tary’s abil­ity to re­spond to long-term chal­lenges by in­creas­ing the size of our force or sim­ply out­spend­ing po­ten­tial ad­ver­saries on cur­rent sys­tems,” he said. “So to over­come chal­lenges to our mil­i­tary su­pe­ri­or­ity, we must change the way we in­no­vate, op­er­ate, and do busi­ness.”

Nine days later, Hagel handed in his res­ig­na­tion, which will take ef­fect as soon as the US Se­nate con­firms his re­place­ment. A pol­icy aimed at restor­ing de­fense in­no­va­tion and pro­duc­tion in Amer­ica would en­sure that the US up­holds its global tech­no­log­i­cal lead­er­ship and com­mer­cial com­pet­i­tive­ness. Un­for­tu­nately, Hagel’s suc­ces­sor is likely to find that, in an era of limited bud­gets and au­to­matic spend­ing cuts, the type of com­pre­hen­sive in­no­va­tion strat­egy that Hagel en­vi­sioned may sim­ply not be vi­able.

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