Back to the Future? A Look at U.S. Defense Innovation

For the past 70 years, militaries have set the research and development agenda for evolving defense technologies. Prior to World War II, though, militaries often adopted technologies that had been developed commercially. Historian, author, and naval architect Larrie D. Ferreiro is the Director of Research at the Defense Acquisition University. We spoke to him on the sidelines of GMF’s symposium “Defense Innovation and the Future of Transatlantic Defense Cooperation” on whether today’s defense needs might be better served by the older paradigm. He notes that these views are his own and do not represent any part of the Department of Defense.

You have suggested that innovation in the defense industry might be best served by shifting back toward a model that existed before World War II. Could you explain how you see the model that predominated for most of the 20th century, what the model was before that, and what a pivot towards that older model might look like?

During the Cold War, the defense research and development paradigm, greatly simplified, was as follows: The Department of Defense made forecasts of what the threat would be in 10, 20, and 30 years, and the R&D planning was put into place to match the threat and develop the required technologies. The classic example for this is the Second Offset Strategy. The Soviet Union always had more troops and conventional arms than did NATO. The first strategy to offset that advantage, build more nuclear weapons, failed when the Soviets matched our production. So, in 1975 the DOD started on what we now call the Second Offset Strategy, at the time called a Long-Range Research and Development Planning Program run by ARPA (today DARPA), because we had to out-think them and out-technology them; to paraphrase Mark Watney from The Martian, "We needed to science the shit out of this." We identified and developed over the next two decades the kinds of technologies that would allow us to outperform the Soviets, including stealth, microprocessors, software, the beginnings of the Internet, and long-range cruise missiles.

For example, the DOD put seed money into underwriting the large-scale manufacture of microprocessors that could fit on ballistic missiles and cruise missiles and all these other electronics that we needed in order to achieve this second offset. That seed money got a lot of commercial companies involved in the development of microprocessors. At that time, the late '70s, early '80s, the U.S. government was a major consumer of microprocessors. The technology had not quite penetrated into the commercial market. That seed money enabled companies like Microsoft and Apple to start radically reducing their cost in miniaturization, which allowed the government to buy products at a much lower cost.

Fast-forward to the year 1989, the Berlin Wall collapses, and within two years the Soviet Union collapses. The reason this paradigm worked was that the DOD was able to leverage our R&D investments to change the face of technology worldwide. And in the 1970s, the DOD owned 10 percent of the world's R&D budget, which was a substantial amount of leverage.

What was the model for innovation before World War II?

World War II marked the start of heavy government investment in research and development, especially military. Prior to that, the largest part of the research budget of the United States was devoted to agriculture, so very little of the Army and the Navy actually went through what we would call today R&D.

For something like 180 years of our existence, we looked at the commercial sector to develop the technologies that would change the way we fought. That was not simply the United States — Britain, France, and Germany were all the same way. They all relied very heavily on their commercial sectors to develop these technologies. As these commercial technologies were developed, the militaries would look at how they would be adapted to the military manner of fighting. It was the commercial sector that developed the Maxim machine gun in the 1880s. It was the commercial world that developed the wireless radio a decade later. It was the commercial world that developed the airplane in the 1900s. At each point, the militaries tried to use these new inventions, but it was the nation that could adapt its own doctrine fastest to those new technologies that gained the greatest military advantage. And it was quite a contest. By the way, spoiler alert, in none of those cases did the United States initially lead the pack. However, the United States did eventually learn and outstrip its competitors. 

One particular example involves the aircraft carrier. The United States, France, Germany, and Britain were all looking at the commercially-developed airplane as a military weapon, but no one was quite sure how to use it at sea. So, there was a long period, primarily between World War I and World War II, where the navies did a lot of work to slowly but surely develop the ideas of how this would operate, develop the doctrine, develop the methods of taking off and landing, of how it would be used in warfare. And they did a lot of wargaming and operational fleet exercises. That was the key to adopting a new technology. It was not simply somebody looking at it and thinking, "This is a great idea. Let's do it." There was usually a careful process of trying it out in different scenarios, taking lessons from the operational experience or the wargaming experience, folding it back into the technology, and then, eventually, it became part of the fleet. So that is a fairly systematic way of thinking about how an organization can change its paradigm,  not in one fell swoop but by actually thinking carefully about which inventions, technologies, concepts would change the way they fight, try them out, go back and revise the doctrine. This process is very similar to modern agile development in software, but of course at a longer scale — not weeks as with software, but rather months and years.

What is the difference in the context for innovation right now? What advice do you have for policymakers around this?

In the 1970s, the DOD was the single biggest player in the R&D world – 10 percent of the total was a big lever — and it was able to wag the tail (so to speak) of R&D investment globally. The trend today is that the DOD owns less and less of the world's R&D budget, and the leverage is simply not there — the DOD is now just a few hairs on the tail of the dog. In 2010, it had 5 percent of the world's total, about $80 billion out of $1.6 trillion. In 2016, it is 3.5 percent of the world R&D total, and it continues to fall. So, the ability of the DOD to influence how research and development, and by that token, investments in very specific parts of technological development is anywhere from limited to almost non-existent. Today, almost no federal money goes into microprocessor research.

What I am suggesting here is reframing the concept of how we approach defense acquisition. Instead of taking the doctrine that we imagine we are going to have in 10 or 20 years and developing the technologies and the engineering to achieve that, we instead develop new doctrines based on the technologies and developments in the commercial sector that are appearing. In other words, it is the reverse of what we are doing now.

Instead, we are looking at what is present now, what is present in the next few years, what can we do with it? How can we establish the kind of doctrine for fighting that would take advantage of these new technologies? And it may not be what we had predicted. One of my favorite examples is the self-driving vehicle, which is coming along at a faster pace than we had ever imagined. Had we been following the standard military R&D course, we would have put in place a plan to develop autonomous capability that would arrive at some endpoint 20 years from now. We will get there much faster if we are looking toward what the commercial world is doing, following it, figuring out where we can adapt what is happening now, and instead of dictating the requirements for creating a technology, we instead take those emerging technologies and decide how we would use them on the battlefield.

None of these ideas by itself is greatly different from what we do today. It is quite common for new technologies to be folded into the way we fight. But in order to make those new concepts fit into an acquisition system, we are going to have to rethink the way we do large-scale acquisition for high-value platforms. This final piece is the one that will require the greatest institutional shift.

We have believed for a very long time that economies of scale will reduce cost. We buy 1,000 aircraft or 500 aircraft, in the belief that once we have got the industrial process established, we have learning curves and other things that will drive down cost. I do not think it is ever worked quite that way, because in so many cases, the 50th and 500th unit to come off the military production line do not resemble each other the way a Ford or Hyundai or an Apple product are done in a very standardized fashion. The savings from building 500 aircraft or 50 warships are probably not nearly as much as are often advertised, when you look at the actual return costs.

The other problem with having a 500-aircraft buy is if your technology isn't there at the beginning, it's not going to get there at all, so there's a race to get all the technologies into one platform. Every program manager knows this. If instead we went to a paradigm where that number came down dramatically, so instead of saying that we're going to buy 500 aircraft in a series, it might be 20 or 50 and then move on to the next series, the pressure to get the latest technology into that particular series is lessened. There's often an argument, yes, it's true that aircraft are produced in blocks or flights, so you have a block one F-35, a block two model, etc., and there are technology insertion points, but the major parts of the aircraft really don't change. The airframe can't really change that much. The engines can change but not by much. The gross takeoff weight can't change much. For a ship, same thing.

For these high-value platforms, the technologies are often in the mission systems and the software. The goal should be to make the platforms more flexible to allow “plug and play” over long periods. It probably makes more sense to think not about the flexibility of the individual platform or the individual aircraft, but rather the flexibility of the entire series of platforms. As a new fighting doctrine evolves, a new line of aircraft, ships and other platforms can be developed, if not in real time, certainly in a way that is more adaptable to these evolving technologies and evolving ways of fighting, which would allow technology insertion and doctrinal change to happen more quickly. They would enable it to be tested far more rapidly and would get us to where we want to go in a more efficient manner.

As we are thinking about how we are going offset the near-peer competition, we find ourselves in a situation where our near-peers are quite capable of taking most of the technology that we are developing and, quite frankly in some cases, developing at a faster rate. The same commercially-developed technologies available to the DOD will almost certainly be available to everyone, including our competitors. The real question is, who is going to be able to out-doctrine the other one? Not who is going to be able to out-produce or out-science or out-technology, but who is going to be able to out-doctrine?

This all means we would be looking at a much different paradigm where we are looking at things like balance of power where what we are capable of doing is not terribly dissimilar from what other competitors are able to do, and how we adapt our way of deterring war and conducting war has to outpace that of our potential adversaries. I am suggesting that we leave behind the notion of  trying to project 20 years into the future and develop technology, and instead  figure out what our technologies let us do and adapt our platform buys and ways of way of fighting to that. This process will get us inside our peer competitors' OODA loop — observe, orient, decide, and act — much faster.