The Defense Innovation Imperative

The Defense Innovation Imperative: A Prescription for Preserving and Formalizing Rapid Technology Innovation in the Department of Defense

Adam Jay Harrison

With the withdrawal of U.S. forces from Iraq, the eminent wind down of combat operations in Afghanistan, a shift in emphasis to the Pacific theater of operations, and increasing Federal budget pressures, the last four years have evinced a major strategic shift by the Obama administration, one that will almost certainly result in a continued rebalancing of military capabilities in the upcoming 2014 Quadrennial Defense Review. While there is near universal consensus that the U.S. must maintain a force structure that supports a combination of capabilities for conventional power projection, strategic deterrence, and flexible response, there are troubling signs that decision makers in the Pentagon, the White House, and Congress have failed to learn the real lesson of the last decade of conflict, that is, the greatest threat confronting the U.S. is not geopolitical, it is technological. As the Department of Defense (DoD) moves to curtail operations of the agencies that led the innovation response to the rapidly evolving threats in Iraq and Afghanistan without introducing commensurate changes to the defense acquisition system to offset this loss in capability, the U.S. is at risk of exposing a strategic vulnerability to military adversaries who fully incorporate the rapid innovation cycles of the commercial technology marketplace.^[i]

Innovation won the Cold War. At any given point along the fifty year arc of conflict that dominated the twentieth century, the Soviet Union and its Warsaw Pact allies maintained a two to five times numerical superiority over the U.S. and NATO in virtually every category of conventional forces.^[ii] The Soviet bloc’s quantitative advantage derived in large part from a combination of conscription, which ensured a reliable supply of manpower, and state control of industry, which prioritized military materiel often at the expense of the general economy. To the extent that such measures could not be easily (or desirably) replicated in the liberal democracies of the West, this disparity forced the U.S. to pursue an asymmetric strategy that sought to balance Soviet conventional forces by alternate means. In the years following World War II, this approach meant developing and deploying a strategic nuclear deterrent. But it would not be long before the Soviet Union deployed a nuclear arsenal of its own, ushering in the age of Mutually Assured Destruction and nullifying the West’s asymmetric lever.

The ensuing strategy was more implicit but proved ultimately decisive. In the late 1950’s when it became clear that the West would not continue to enjoy a one-sided advantage in nuclear arms, the Pentagon dramatically increased R&D spending with an eye towards introducing qualitative improvements to conventional and strategic weapons systems.^[iii] A sustained and well-funded R&D effort underwrote major advancements in U.S. warfighting capabilities and led to the emergence of a new strategic asymmetry, one that the Soviet Union sought to counter through a combination of its own R&D investments and the modernization and expansion of its arsenal. Ultimately, though, the efficiency of the American free market and the technology innovations it churned out proved too much for the centrally planned Soviet economy, which collapsed under its own weight in the early 1990’s.

Fast-forward two decades to the present day. Outwardly, the international security environment has little in common with the Cold War. The U.S. is the world’s lone “hyperpower” and has no military rival. But look more closely and a disquieting similarity emerges. Overwhelming U.S. military superiority has in many respects destabilized the security environment by forcing potential state and non-state competitors to develop their own asymmetric strategies. The preeminence of America’s kinetic military capabilities, conclusively demonstrated in Operation Desert Storm in the early 1990’s, would so shape the international security landscape that potential adversaries would be forced to invent new tactics - cyber, Improvised Explosive Devices, etc. - deployed on new battlefields where the application of conventional force can be mitigated.

The story of the Cold War is one of adaptation. The inability of the Soviets to efficiently adapt to a continuous stream of both real and perceived military innovations from the U.S. inevitably contributed to the demise of the Soviet state. In today’s international security environment, adaptation cum technology innovation continues to play a decisive role. But in this current context, it is the U.S. that has been cast in the role of laggard with the pace being set a spectrum of threats underwritten by the commercial technology marketplace. The proliferation of increasingly sophisticated component and design, prototyping, and manufacturing technologies is enabling a new generation of adversaries who learn in rapid, iterative cycles - just like Silicon Valley. Leveraging the lessons and tools of high tech industry, these adversaries operate inside of the U.S. military’s innovation cycle, fielding multiple generations of threats before the organizationally and legislatively encumbered DoD can react. Former General Electric Chairman and Chief Executive Officer, Jack Welch, said, “When the rate of change outside exceeds the rate of change inside, the end is in sight.” His warning is as true for defense as it is for big business.

The dynamics of contemporary conflict are increasingly influenced by the democratization of high technology and the social learning of open, adaptive networks that evolve innovations at faster and faster rates. Technology futurist Ray Kurzweil describes this phenomenon, where technology evolution “advances (at least) exponentially” driven by “human ingenuity combined with ever changing market conditions,” as the Law of Accelerating Returns. Within this context, succeeding generations of technologies interact in a multiplicative manner to produce a cascading flow of future innovations.^[iv] The influence of this principle is manifested in a broad spectrum of emerging threats shaping contemporary battlefields.

As a case in point, Improvised Explosive Devices (IEDs) are to date responsible for the majority of U.S. combat fatalities in Afghanistan and Iraq.^[v] Costing on the order of tens to hundreds of dollars per device to manufacture, IEDs are typically cobbled together from materials on hand augmented with electronic triggers re-purposed from consumer electronics. While opinions vary, it is generally accepted that one of the main challenges in mitigating the IED threat is their lack of standardization combined with an evolutionary cycle that measures in weeks to months. Almost as soon as the U.S. military deploys an IED countermeasure, new IED variants start to appear on the battlefield rendering the countermeasure obsolete.

The problem is not just operational. The Pentagon has spent approximately $100 billion on Counter-IED capabilities since 2003, an investment that has funded such products as the massive Mine Resistant Ambush Protected (MRAP) vehicles, radio controlled IED jamming devices, and a legion of IED detection systems. By contrast, IED development and manufacturing operations, underwritten primarily by the commercial marketplace, benefit from economies of scale and commodity pricing. All told, for every dollar spent on IEDs, the U.S. spends $100,000 or more developing and deploying countermeasures. These economics are both unsustainable and increasingly at odds with the fiscal realities now facing the nation.

While the U.S. economy of today bears little resemblance to that of the Soviet Union in the 1980’s, Federal defense spending at current levels is at best a very real opportunity cost and at worst an outright liability. The U.S. spends more on defense then the next fifteen largest defense budgets combined, and competing priorities have placed heightened pressure on defense spending at the same time that the international security environment continues to evolve in dangerous new directions. Moreover, the ability of the military to adapt in response to these changing conditions is constrained by institutional friction from a defense acquisition system optimized for industrial-scale applications rather than information age innovations. The Pentagon spends too much on defense, but it’s still not enough. And the biggest obstacle to spending smarter is a defense acquisition system that is unsuited to the modern innovation economy.

Despite a chorus of calls for acquisition reform, few if any tangible steps have been taken to alter the status quo. DoD personnel and infrastructure costs associated with various acquisition-related functions (i.e. “The Tail”) continue to grow faster than investments in combat units (“The Tooth”) with a greater percentage of acquisition programs running over budget and behind schedule than at any time in history. In a recent McKinsey study, the U.S. ranks next to last among thirty leading militaries in Tooth-to-Tail spending, beating only Switzerland.^[vi] To the extent that long-term reform has been attempted, it has tended to focus predominantly on long-term enterprise-level planning and risk management associated with a small number of Major Defense Acquisition Programs and not DoD’s fundamental approach to technology innovation in an increasingly fluid international security environment.

But the practical necessities of the last decade of conflict have given rise to a countervailing process operating on the margins of the conventional defense acquisition system. The current incarnation of the DoD rapid acquisition enterprise came to life beginning in 2002 with the establishment of the U.S. Army Technical Operations Support Activity (TOSA), the U.S. Army Rapid Equipping Force (REF), and the U.S. Army IED Task Force and reached maturity with the establishment of the Joint IED Defeat Organization and the ISR Task Force. Collectively, these and many other similarly constituted organizations have pursued an agenda to speed the flow of life saving innovations to the front lines of conflict, rethinking how DoD sources, develops, procures, and fields new capabilities with improvised threats in mind.

Formed in 2002, TOSA was one of the earliest progenitors of the current generation of DoD rapid innovation agencies. It was established as a public-private partnership at the intersection of the Intelligence Community, DoD Special Technical Operations, and non-defense R&D and charged with harvesting commercially derived technologies for sensitive military missions. Staffed by an eclectic mix of former intelligence and special forces operators and world class technologists and researchers, TOSA executed an unprecedented campaign to learn the tradecraft of the commercial technology marketplace and apply these lessons to a new generation of information age threats confronting warfighters engaged in combat operations abroad. Leveraging a design-based approach inspired by the consumer product development techniques of Silicon Valley, its members embedded with operational units on the front lines in Afghanistan, Iraq, and around the world to observe tactical operations first hand and translate these observations into life saving products.

By repurposing existing defense acquisition authorities, TOSA was able to dramatically shorten the conventional defense product development timeline from years to months and even weeks, delivering dozens of unique products to the battlefield during the most tumultuous periods of fighting in Iraq and Afghanistan. One of these products, an aerostat-based surveillance system called the Persistent Threat Detection System (PTDS), was cobbled together from a combination of found items, including a mothballed twenty-year-old aerostat, and Commercial Off The Shelf (COTS) components. Developed to aid in the rapid locating of hostile low trajectory mortar fires and Man-Portable Air Defense rockets, the first PTDS system was fielded to an operating location on the outskirts of Baghdad in less than ten months from program start at a fraction of the cost of conventional surveillance systems. Eventually, 66 units would be built and deployed to operating locations in Iraq and Afghanistan. PTDS systems recently surpassed one million airborne mission hours in the Afghanistan theater of operations alone.^[vii]

To shorten the time from insight to innovation, TOSA and other rapid acquisition agencies have taken advantage of design-based approaches that capitalize on insights from the tactical edge as a basis for innovative new defense products. Today the REF with its Army CoCreate platform and the U.S. Army Asymmetric Warfare Group are continuing to champion user focused design as a basis for rapidly and cost effectively developing new solutions to complex battlefield challenges.^[viii] By aligning technology innovations from a network of partners in academia and industry with the critical unmet needs of military personnel and first responders, these organizations seek to lower the barriers to entry that inhibit the full participation of the national innovation economy in the defense marketplace, thereby, capitalizing on non-defense R&D investments in the development of better, cheaper, and faster capabilities.

But with the strategic shift away from Iraq and Afghanistan, the Pentagon is losing its wartime appetite for rapid innovation projects that defy the conventional wisdom of defense acquisition planning. Combined with increasing budget pressures across government, the defense rapid acquisition enterprise is at fundamental risk of being reduced to the point of irrelevance or decommissioned outright. In the military history of the U.S., this scenario has played out many times, where the infrastructure of rapid technology innovation is dismantled once the immediacy of active combat operations is removed. What makes today different is the fundamental speed and uncertainty of the innovation environment. Technology is the new battlefield, and the players who master the tactics of innovation own the high ground.

Some leading experts have suggested that there is no way to reconcile rapid, commercially derived innovation practices with the process-laden and risk intolerant defense acquisition system. A 2009 Defense Science Board study chaired by former Under Secretary of Defense for Acquisition, Technology, and Logistics Jacques Gansler goes so far as to recommend that DoD implement a “dual acquisition path that separates ‘rapid’ and ‘deliberate’ acquisitions.” The rapid path would “utilize existing technologies and acquisition flexibilities” to achieve good enough solutions, whereas the deliberate path would continue to operate based on conventional defense acquisition norms.^[ix]

While the recommendations in the Gansler report, if implemented, would go a long way towards formalizing rapid acquisition as a core DoD competence, in light of the current budget climate there is little chance that DoD will be in a position to absorb the costs of a separate rapid acquisition system that runs parallel to the existing system. Given the strategic imperative to internalize rapid technology innovation practices within DoD, the available near-term option is limited to modifying the defense acquisition system to accommodate the innovation paradigm. This idea is not as intractable as some experts have surmised. Like conventional acquisition, rapid acquisition needs a process, an agile and responsive process, but a process nonetheless. And the first article of this process should promulgate the most effective innovation practices prototyped by the current defense rapid acquisition community across the long-standing institutions that comprise the functioning core of DoD. It should ensure a meaningful and continuous dialogue between commercial markets, academic research programs, military end-user groups, and the entirety of the DoD enterprise - so that technology innovations arising from this interaction can inform and be informed by Doctrine, Organization, Training, Materiel, Leadership, Personnel, and Facilities considerations; the conventional defense acquisition system; and the corporate defense Research, Development, Test and Evaluation apparatus.

The path to accomplishing this objective is to define a strategic framework within which a program of pilot projects can be undertaken with the aim of augmenting the existing defense acquisition system to accommodate the opportunities and challenges of the contemporary technology innovation environment. Collectively, these projects should seek to instantiate the primary lessons learned from the last decade of rapid acquisition activities with the aim of increasing innovation velocity across DoD by 1) improving DoD’s exposure to and domain awareness of the non-defense technology base, 2) creating a more efficient defense technology marketplace by improving information flows between the Pentagon, practitioners, and all sectors of the innovation economy, and 3) lowering the barriers to entry that limit the full participation of the commercial technology ecosystem.

In a period of shrinking budgets and dangerously unpredictable threats, the Pentagon and lawmakers must rethink the relationship between the military industrial complex, its key stakeholders, and the broader U.S. economy to produce better, cheaper, and faster solutions that reflect the opportunities and challenges of the current innovation environment. While arguably necessary to underwrite development of major military platforms, costly and protracted defense acquisition cycles have become a strategic vulnerability in an age when the commercial technology marketplace is setting the pace for advanced technology innovation. The recent history of rapid acquisition in DoD offers a valuable baseline around which a measured program of enhancements to the core defense acquisition system can be introduced, but the verdict is uncertain whether DoD will move to preserve this competence as a permanent and scalable tool in the defense arsenal.

End Notes