RESEARCH AND DEVELOPMENT
Lack of R&D Funding and Skilled Workers Threatens Air Force, Northrop CEO Warns
NATIONAL HARBOR, Md. — The predicted wave of baby boomer retirements among the nation's elite military engineers and scientists has arrived, Wes Bush, chairman, CEO and president of Northrop Grumman Corp., said Sept. 16 at the Air Force Association conference here.
More than half are now eligible to retire, and there aren't droves of young science, technology, engineering and math specialists to take their place, he said. That coupled with a dramatic reduction of research and development funding doesn't bode well for an Air Force, which depends on technology to maintain its global superiority, he said.
"Even in an economic downturn and shrinking defense budgets, we are out aggressively recruiting new engineers," he said. What Northrop has found is that the talent pool on college campuses is small, and those who are available are being pursued by many competing industries, he said.
The advantage the company has in this competition for talent is "that we do cooler stuff than they do," he said. However, that might not be the case if defense R&D budgets continue to shrink and the military becomes more risk adverse, he said.
What Bush sees is more funding moving away from cutting edge research into taking mature technologies and improving them so they can be fielded. It is important to do that, and to be a good steward of taxpayer funding, but basic research is how the nation innovates and comes up with technologies that give the nation superiority over its adversaries, he said.
"Whatever R&D budget results from the current [budgetary] environment, whatever the outcome, we have to recognize that that outcome is actually a decision," Bush said. "It is a decision about our future."
Industry must keep up its part to invest in research and development. It is not only needed to maintain military superiority and the health of the industrial base, but to also attract those younger engineers and scientists into the fields, he said.
The nation spent about 1 percent of its GDP on military R&D in the 1960s. That is down to .5 percent now and is projected to fall to one-quarter of one percent, he said.
"We have to make sure we don't bleed that dry," he said of basic research.
There are also ongoing concerns about the defense industrial base, and Bush agreed with a question from the audience that it was not well understood how the current budget crunch will affect the supply chain.
"We are, as we go through the downturn in our collective environment, increasingly dependent on fewer and fewer smaller companies that are going to struggle through this," he said. If there is a better understanding, then industry and the government can collectively intervene.
Bush said there needs to be new starts on programs such as the long-range bomber to keep the industrial base active. It is difficult for companies such as his to "bridge" to these programs and keep talent on the payroll. Looking for opportunities outside the military market is not the best solution, he said. He didn't want Northrop Grumman to lose its focus on its primary defense customers.
Some have asked him why his company simply doesn't do what other industries do. When they don't have work, they lay people off. When there is an upturn, they rehire. But the defense industry, with its specialized skills, doesn't have the luxury of a "fungible" talent pool, he said.
"That is not the way it works for the types of capabilities that we create. It takes a sustained understanding of how to make these classes of technologies work for them to be successful, and for them to be affordable," Bush said.