For some 70 years, the United States has relied on its competitive advantage in finding, developing and fielding advanced military technologies to counterbalance adversaries’ and enemies’ advantages in quantities of forces, proximity to the battle space, local geography and ideological fervor. To use the current parlance, we preferred capability to capacity. For many decades, advances in technology allowed the U.S. military to increase the effectiveness of individual weapons, platforms and even combatants, literally allowing it to do more with less. The wisdom of this approach was demonstrated in the demise of the former Soviet Union, which up to nearly its dying day had sought to pursue both capacity and capability.
The problem with the U.S. strategy is that the Pentagon had to continually invest in new capabilities in order to stay ahead. But starting with the end of the Cold War, successive Administrations took a modernization holiday while at the same time reducing the overall size of the U.S. military, i.e., its capacity. The George W. Bush Administration came into office with the intention of reversing this trend – remember Transformation, anyone – but got caught up in the wars in Iraq and Afghanistan. Tens of billions of dollars went into capabilities suitable for those conflicts while traditional areas of U.S. competitive advantage were starved for modernization funding.
Now an even more serious problem looms on the horizon. The era of U.S. competitive advantage in advanced technologies with military applications may be coming to an end. Senior Pentagon officials having been running around town with their hair on fire about this problem. Simply put, we are losing our technological edge.
This situation should not have come as a surprise to anyone. In part, it reflects the decision to skip a generation of modernization, failing to invest in new capabilities as the existing ones reached obsolescence. Admittedly, the acquisition system seemed to do its level best to sabotage what modernization programs there were.
The loss of competitive advantage also appears to be the result of massive commercial and military espionage by our competitors. In July 2009, former Secretary of Defense Robert Gates canceled the F-22 program after contracting for 187 aircraft largely on the grounds that the United States had the competitive advantage in stealth aircraft for the foreseeable future. Beijing unveiled its first fifth-generation stealth fighter, the J-31, in November 2014, well in advance of Gates’ timeline for it.
But this situation also is a reflection of a larger shift in the locus of general economic and technological strength. Economists and business leaders are beginning to consider whether the pursuit of enduring competitive advantage in commercial activities makes any sense. This approach fails to take adequately into account the globalization of science and technology activities, shifts in the locus of manufacturing, particularly from West to East, and the impact of cyber espionage. At best, these sources argue, companies will possess transient competitive advantage and must adjust their business strategies accordingly. The decision by Western firms, notably those at the cutting edge of R&D, to move not only production facilities but research activities overseas has only accelerated this trend. This phenomenon is particularly apparent in commercial IT and electronics.
As a result, the Pentagon’s plan to recapture its erstwhile advantage in cutting-edge technologies may be fundamentally flawed. This plan assumes that a set of technologies can be identified and developed that will provide the U.S. with decades of advantage. This is the heart of Deputy Secretary Robert Work’s Third Offset Strategy. The flaw in this approach, actually more of an Achilles heel, is the assumption that the U.S. alone will be able to acquire, exploit and sustain the advantages of new breakthrough technologies as it did in the case of the prior two offsets: nuclear weapons and precision navigation/targeting and stealth. It should be noted that the critical technology areas identified by OSD as candidates for exploitation in the new offset strategy – robotics, autonomous operating guidance and control systems, visualization, biotechnology, miniaturization, advanced computing and big data, and additive manufacturing like 3D printing – are commercial in character and globally available.
In addition, this plan assumes that should such new technologies be identified, the Pentagon can acquire them rapidly and at an affordable price. Not only is there no evidence to support this view, but there is compelling examples to contradict it. While software programs make a generational leap every six months or so, it can take the acquisition system two years to write a Request For Proposals for the next generation of software. Here is an easier example. The Air Force wants to recapitalize its aging fleet of JSTARS airborne ground surveillance aircraft using existing commercial airframes. Yet, it plans to take at least 6 and possibly up to 12 years to develop and procure 17 aircraft. On this leisurely schedule, by the time the last aircraft is delivered the first will be ready for its midlife update.
The reality is that the department which once designed and deployed the U-2 and Polaris ballistic missile submarines in just a few years cannot acquire anything serious in under a decade. On such a timeline, it will be impossible to recapture and maintain America’s competitive advantage in advanced military technologies.
 Rita Gunther McGrath, The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, Harvard Business School, 2013.
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