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Think Tanks to Take Deeper Look Into Future of Defense Industry
By Sandra I. Erwin

It’s not as if Washington suffers from a shortage of critical thinking about the defense industry. A number of think tanks as well as the Pentagon’s own industrial policy shop regularly churn out stacks of reports on the state of the Pentagon’s contractor base. The Defense Department is obligated by law to write such studies every year.

But with the Pentagon facing sweeping budget cuts that could dampen future purchases of new hardware, analysts will be seeking to provide fresh insight into the Defense Department’s future contracting needs and industry's ability to fill them.

One of D.C.’s most influential think tanks, The Brookings Institution, has teamed with LMI, a nonprofit government consulting firm,
to further probe these issues.

LMI, based
in McLean, Va., and formerly known as the Logistics Management Institute, will be working with Brookings’ 21st Century Defense Initiative Working Group to study the “future of the national security industrial base,” the organizations announced Jan. 22.

“LMI attracts some of the most experienced and thoughtful individuals to develop solutions for the federal sector, and we welcome their participation in this important project,” said Michael E. O’Hanlon, director of research for the 21st Century Defense Initiative.

“We decided this partnership made a lot of sense” in the context of what is happening with Pentagon budgets, said Luke Knittig,
manager of public outreach at LMI.

With less defense money likely to be spent on next-generation weapons, Pentagon leaders will be concerned about the impact that downsizing will have on contractors, he said. There are emerging questions such as whether the industry can satisfy a projected higher demand to refurbish aging equipment that will not be replaced. “The industrial base has been more geared to putting new things in the field over the past 10 years,” Knittig said. “Now it will be more focused on retrofitting, on adapting what we have. … With fewer new systems, it becomes imperative to get the most of what you have.”

What ramifications this could have for defense industry will be one of several topics that Brookings and LMI analysts will tackle, Knittig said.

Other questions the group expects to take up include:

• Are there any sectors within the U.S. defense industry or types of technologies for the Department of Defense that should be prioritized? • The Defense Department is likely to reduce the size of the nation’s ground forces considerably in the years ahead. Does this imply prioritizing investment in air-sea battle capabilities at the expense of ground forces, or should the United States try to do all with less?

• Do the Pentagon and Congress have enough tools for evaluating the strength of the nation’s industrial base and its access to key raw materials and technologies? If not, what should be done to give this subject greater scrutiny?

• Should private companies be allowed to compete for a higher share of maintenance contracts, even if that means downsizing government depots?

• Is the Pentagon’s focus on enlarging its acquisition oversight workforce making the acquisition process more innovative, economical, and efficient or more burdensome and bureaucratic?

• Are there tools of export and trade policy that need to be adjusted to strengthen the U.S. defense industrial base? Does the consolidation of export control lists within Commerce bode well or are other steps needed?

• Are there foreign allies from which the United States should be willing to import more defense technology, especially if trade opportunities are reciprocated? Should the United States explore joint production options with close allies, along the lines of what Britain and France have recently launched?

• How should the nation strengthen STEM education in the United States, in high schools and colleges, to encourage more Americans to pursue careers in science, technology, engineering, and math? Does the nation need to revise immigration and green-card policies to increase the ability of foreign scientists to remain in this country after studying here and contribute to its scientific and industrial strength?

• Do government regulations and requirements deter new firms from entering the defense market to the detriment of the nation’s military? If so, what should be done to induce their entry?

• Are there any other policy interventions that might be needed to ensure American military technological preeminence in the years ahead?

According to a Brookings’ white paper, “Today, the industrial base as a whole is experiencing changes perhaps as never before. While individual firms and programs continue to rise and fall, the overall U.S. national security marketplace — now extending beyond traditional defense issues — is wrestling with revolutions in technology, new modes of warfare, and uncertainty in everything from its labor pool to trade policy to budgetary resources.”

Analysts have concluded that the industry is at a “strategic inflection point where its future can sharply change for better or for worse,” the paper noted. “Yet despite this combination of importance and uncertainty, the topic is too frequently approached in a short-term manner, too frequently defined by consideration of a single program authorization decision rather than broad trends, and too frequently discussed in mere bumper sticker terms.”

Photo Credit: Thinkstock


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