US Defense and Silicon Valley: A Red Herring

Ukraine is teaching America and NATO that "big" wars are possible in the 21st century. We need to be prepared.

The Pentagon wants America's defense industry to emulate Silicon Valley and to invest in cutting edge new technology. Does this mean that American defense companies are behind the times and incapable of innovation?  And does it mean that Silicon Valley has a lot to teach US defense companies?

No one doubts that Silicon Valley (and its analogues around the country in places like Boston, Austin, Madison, Phoenix, Raleigh-Durham and many others) is innovative.  

Likewise it is true that since the invention of the transistor in 1947, carried out at Bell Laboratories, technology originating in the commercial sector has contributed significantly to America's defense capabilities.  

John Bardeen, William Shockley and Walter Brattain at Bell Labs, 1948

But it is not all one-sided.  Nuclear weapons were developed by the War Department (later named the Defense Department) during World War II.  That effort leveraged the brain power of physicists and engineers, many of them refugees, who exploded the first Atomic weapon on July 16, 1945 at Alamogordo, New Mexico, 210 miles south of Los Alamos.  While nuclear weapons needed industrialization, which was mostly achieved in the private sector, development was done by the government.

In a similar fashion, at the end of World War II the US had tens of thousands of manually operated machine tools with little or nor future.  It was the US Air Force that paved the way for numerically controlled machine tools. The first CNC machine was credited to James Parsons in 1949.  Parsons was a computer pioneer who worked on an Air Force Research Project.

The debate about defense and Silicon Valley often misses many important arguments.

The first, perhaps the most important, is that investment in defense systems represents the use of taxpayer money to purchase specific military capabilities.  Taxpayers do not like to fund projects that fail.  Nor are taxpayers looking to make money from their investment.  Rather, taxpayers are looking for security.  They want US soldiers to have the best equipment money can buy.  Naturally they also want the bulk of the money spent here at home and good jobs for Americans growing out of defense spending.

Unlike Silicon Valley, defense companies fed by taxpayer dollars are not supposed to export American jobs.  Silicon Valley has, almost from the start, outsourced work abroad, mainly to Asia.  In the past two decades, most of the outsourcing has been to China.

US defense companies have partnered with foreign defense companies and carried out production in the NATO countries, Israel, Egypt, Australia, Korea and Japan. However, the outsourcing and partnering represents a tiny share of production. Comparatively, Silicon Valley has often outsourced all of its production abroad.

American defense companies have operated in China too, but nothing like the scale of Silicon Valley operations.  Moreover, most US defense companies have sold technology for allegedly civilian products that include things like satellites, commercial aircraft and helicopters.  Unfortunately US Defense firms have been less than careful on how they share their intellectual property, and often they have weak security making it easy for adversaries to steal defense secrets. 

Recently the Pentagon was "horrified" to find out that a magnetic alloy used in the turbomachine pumps in the F-35 engine was bought from China, violating US procurement regulations.  There probably are other examples of US defense equipment with Chinese parts that have been "laundered" making them hard to discover.

The second argument put forward is that US defense companies are not innovative.  One of the examples used is the rise of new technologies like artificial intelligence where US defense companies are behind the commercial sector.

But is that true?  

Leidos, Boeing, GE, L3 Harris technologies , Airbus, AECOM, ManTech International, Perspecta and Bechtel are investing in artificial intelligence technology.  Even NATO has set up a $1 billion fund to invest in artificial intelligence startups.  These companies are recruiting new engineers and scientists and some are filing patent claims or already have them.

There are other sectors also getting innovation dollars from defense companies.  Boeing has invested in Wisk Aero, a company that builds autonomous air taxis.  General Dynamics Land Systems is an investor in Epirus, a company that develops drone zapping technology.  Boeing has partnered with AE Industries setting up a $250 million investment fund to invest in startups in future mobility, space, sustainability, digital enterprise applications, networks and security.  Lockheed put $100 million into Florida-based Terran Orbital which specialized in small satellites.

The other place to look is innovative defense systems.  US defense companies today produce the best fighter planes, the best submarines, the best tanks, and the best anti tank weapons in the world.  Today the US military is moving toward operational integration of weapons, sensors and fighters, far beyond any other military in the world.  

Certainly there are gaps and problems.  The US lags in capable air defense systems not because it is missing any key technology but because the Defense Department, and more specifically the US Army, has stubbornly resisted allowing a real competitive environment in this sector.  For the same reason plus the prevalence of the so-called Not Invented Here attitude, the Army is behind in deploying active defense for armored vehicles.  As the Russians have learned so painfully, the absence of effective active defense systems spells doom for armor.   

The US also is behind in hypersonic weapons while potential adversaries including Russia and China lead.  That gap will soon be closed, but the slow uptake on hypersonics was a failure to understand how quickly certain technologies such as advanced materials and developmental products such as scramjet engines would get incorporated into fielded systems.

It did not help that the US supplied some of the main technology for China’s hypersonic weapon’s program.

The Dongfeng-17 missile launcher displayed at the "Forward New Era" theme achievement exhibition at the Beijing Exhibition Hall.

The gaps and failures have nothing to do with Silicon Valley or with a lack of innovation.  The US was a leader in developing scramjet technology, but it shared its technology and testing with Russia and China quite openly (largely through NASA, not the Defense Department).  While the others carried it forward, NASA had no operational interest in weapons, so it did not proceed and, meanwhile, DOD was sleeping.

Defense companies mostly build what the Defense Department asks for and far less often develop something on their own without DOD support.  Part of that is related to money, but it is equally true that not much is gained from building a terrific product that DOD does not want.  Typically, the Defense Department comes up with a list of requirements, often developed with the help of industry.  One familiar technique is Requests for Information (RFI), where the Defense agencies (for example the Air Force or Navy) ask whether industry can offer ideas on how to develop this or that technology or product.  An RFI is a fishing operation and there are no commitments, but defense companies answer the call in the hope of future business.

A second technique is competition where companies get initial funding to build a prototype that will compete against others.  Today these competitions often are composed of industry teams (more than one company, but one acting as prime) where team members hope to get future business if the prime wins the competition.  Some players join more than one team if they can, assuring they win no matter what the final selection decision is.

How the Defense Department procurement system works (or does not work) has been the subject of controversy for years.  It is far from an ideal system, since the buyer is influenced not only by price or technology, but also by extraneous considerations that include maintaining the defense industrial base or satisfying a powerful Member of Congress.  Likewise there are a number of procurement failures --where the final product fails to perform and ultimately is dropped.  Taxpayers pick up the bill for these failures, and they can be very expensive with billions of dollars lost.  

Product failures are not confined to the United States.  Russia and China have plenty of them and so do our NATO partners.  Britain is close to cancelling its multibillion dollar Ajax armored fighting vehicle which has performed poorly and caused health problems for the vehicle's crews.

Yet at the same time many US weapons well outperform peers and near-peers and give the US a warfighting edge.  Some of that is on display in Ukraine where a number of US systems, including the FIM-92 Stinger, the FGM-148 Javelin and M-142 HIMARS have performed admirably.  It is interesting that the last US procurement of Stingers took place 18 years ago, showing that US systems are sustainable over time.

The High Mobility Artillery Rocket System fires the Army's new guided Multiple Launch Rocket System during testing at White Sands Missile Range.

One key difference between commercial products and those in the defense world, a difference that causes any number of supply and replenishment problems, is that US defense goods stay operational for long periods.  A front line fighter aircraft may stay in the inventory for 30 or 40 years; the venerable B-52 has been around so long that the grandsons of the original B-52 pilots are flying them today.  Commercial products often are jettisoned when it is more cost effective and performance enhancing to replace them far sooner.  Years ago when I served in DOD I asked Bob Noyce, the cofounder of Intel, to have a look at an expensive strategic system and give us advice.  Bob reported that many of the critical parts were no longer manufactured, calling them "sunset technologies."  This problem remains a challenge today.  We will feel it as defense companies such as Lockheed and Raytheon attempt to source parts for products such as Stinger that need to be replaced in inventory as a result of the Ukraine war (or replaced with something else as it may no longer be practical to keep producing Stinger).

Germany and the United States have sent hundreds of Stinger missiles (like this one being fired during a Marine Corp training mission) to help Ukraine fight the invasion from Russia. U.S. NAVY PHOTO BY MASS COMMUNICATION SPECIALIST 2ND CLASS CHANDLER HARRELL

Comparing defense companies and their products to those of Silicon Valley is not a productive way to figure out how to improve defense procurement or get better defense products to our military.  In this sense, Silicon Valley only serves as a kind of red herring.  We should focus on improving and sustaining procurement cycles, introducing new technology wherever we can, and above all purchase enough hardware for our troops. Ukraine is teaching America and NATO that "big" wars are possible in the 21st century.  We need to be prepared.