For traditional defense companies, the operative word is “non-kinetic,” another speaker asserted.
“We love our kinetic weapons, and we don’t want to let them go,” he said. “But the world is moving in a different direction.”
Here’s the problem: Kinetic weapons only are useful in phases two, three and four of war. Gates is veering the emphasis to the fringes — to phases zero and one (prevention of conflict, interagency work) and to phases five and six (stabilization and policing).
*****
I love articles like this, because looking into the future of an industry, takes analysis and synthesis. You have to put all the pieces together, and create a picture of what you think will happen. If you have a enough of these articles, you can start to gain a consensus with predictions. You also hope that people aren’t just copying what everyone else is saying, and calling that prediction.
With that said, I take all of these with a grain of salt, and enjoy the process. From what I can deduct, I think organizations like the IPOA are gonna be very popular in this industry. Because stabilization and policing is right at the top of the list with this industry, and if we continue to apply Kaizen to the way we do business, this industry will continue to gain.
I also got the obvious hint in this article about what the big guys are reading. Andrew Krepinevich should be on the reading list for everyone here, if they want to make their own assessments. If the big guys are reading it, and the thing is shaping policy because of what was said, I kind of think that our industry should keep up and get on the same track. – Matt
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To Defense Industry, the Future Looks Uncomfortably Unfamiliar
April 2010
By Sandra I. Erwin
Once upon a time there was much anxiety in the defense industry about the Obama administration gutting the Pentagon’s budget.
Those worries have been allayed, for now. Defense is the only portion of the federal budget that the president sheltered from the axe.
So the industry is breathing a sigh of relief, sort of.
Yes, the budget is huge, but the industry still feels vulnerable. Executives fear that weapons systems that for decades have been reliably profitable are becoming obsolete. They see the Defense Department shifting into new areas of warfare, but are not sure how to reposition their companies to succeed in non-traditional markets. They also fret about the nation’s oncoming fiscal train wreck, and wonder when someone will make the tough choices.
The much-anticipated Quadrennial Defense Review was supposed to give the industry “planning tools” to strategize about the future of the business. But the review was mostly a disappointment for its lack of specificity. One industry official compared the QDR to the Soviets’ infamous five-year plans for economic development.
In boardrooms these days, corporate bosses are brainstorming.
Many in the industry recognize that they are still stuck in the Cold War way of doing business. The 9/11 attacks were supposed to have shaken up the weapons-buying apparatus. That didn’t happen, except for a massive spending surge. It ultimately took a heavy hand from Defense Secretary Robert Gates to shift money and focus from planning for hypothetical future conflicts to dealing with today’s wars.
At a recent off-the-record industry gathering, a panel of high-ranking defense executives told the audience of contractors to stop living in denial about the coming shifts in the market.
Companies have to pay more attention to what Gates is trying to do, and not assume it’s just a temporary diversion until we go to war with China, members of the panel cautioned. Gates’ influence should not be underestimated, one panelist said. “He delivers the message across the river.”
For traditional defense companies, the operative word is “non-kinetic,” another speaker asserted.
“We love our kinetic weapons, and we don’t want to let them go,” he said. “But the world is moving in a different direction.”
Here’s the problem: Kinetic weapons only are useful in phases two, three and four of war. Gates is veering the emphasis to the fringes — to phases zero and one (prevention of conflict, interagency work) and to phases five and six (stabilization and policing).
The industry is “stuck in the middle three,” the official said. The companies that will thrive are those with the non-kinetic technology and skills that can help the military succeed in the outer edges.
Other pieces of advice to the industry:
• Think way out into the future, about what threats the United States might face in 10 years. The menace du jour, cybersecurity, from a strategic planning standpoint, is yesterday’s news, a senior exec said. “What’s next?”
• Keep an eye on U.S. Special Operations Command. SOCOM is growing by 30 percent a year. It is ahead of everyone else in understanding nonconventional warfare. Both the Army and Marine Corps want to be more SOCOM-like.
• Become more culturally aware. Executives on the panel said U.S. companies must think more globally, as opposed to just being American companies doing business internationally.
• Fix the supply chain. Prime contractors are exceedingly dependent on economically fragile lower-tier suppliers. Squeezing subcontractors for lower prices can be counterproductive, he said. “We have to watch this area closely.”
• Think more like commercial companies. One panelist recalled this comment he heard at the Pentagon: GM builds a car and then tries to sell it; the defense industry sells a ship and hopes it can build it.
• Prepare for China to challenge U.S. dominance in the global arms market. That means making better products at lower costs. “China will be a major change agent in the market,” one official said. “We need to be in a position to be competitive.”
• Read Andrew Krepinevich’s “7 Deadly Scenarios: A Military Futurist Explores War in the 21st Century.” The book had quite an impact on Gates and is shaping many of the Pentagon’s war games.
• Read another Krepinevich study, “Why AirSea Battle?” which discusses the potential consequences of Iran and China surging as military powers. It is a useful guide for planning investments in high-end weapons.
• Remember Abu Musab al-Zarqawi. Air Force Lt. Gen. David Deptula often reminds people how the Islamist militant was captured in 2006 in Iraq. It took 600 hours of Predator time, thousands of hours of intelligence analysis and only six minutes for an F-16 fighter to get him. In the old days, the most important part of that chain would have been the F-16. It’s not that way anymore.
It has become a cliché in Washington that the Pentagon has a checkered history in trying to predict the future. The good news for contractors is that the military budget is going to remain the world’s largest, even as the U.S. debt continues to balloon. “We’re the only nation that’s allowed to borrow from itself,” one of the panelists said. “The world admires us and lets us keep doing it because we’re their last best hope, and they know it.”
Story here.
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Product Description for Andrew’s book
A global pandemic finds millions swarming across the U.S. border.
Major U.S. cities are leveled by black-market nukes.
China’s growing civil unrest ignites a global showdown.
Pakistan’s collapse leads to a hunt for its nuclear weapons.
What if the worst that could happen actually happens? How would we respond? Are we ready?
These are the questions that Andrew Krepinevich asks—and answers—in this timely and often chilling new book, which describes the changing face of war in the twenty-first century and identifies seven deadly scenarios that threaten our security in the crucial years ahead. As president of the Center for Strategic and Budgetary Assessments and consultant to secretaries of defense, the CIA, the Homeland Security Council and the Joint Forces Command, Krepinevich’s job is to think the unthinkable—and prepare a response in the event our worst nightmares become reality.
Basing his analysis on open intelligence sources, an assessment of the latest global and political trends, and his knowledge of contemporary military history, Krepinevich starts each of the seven scenarios in the context of current geopolitical realities and vividly tracks the path to crisis. From the implosion of Pakistan to a worldwide cyberattack, from the consequences of a timed withdrawal from Iraq to the likelihood of a China on the march, Krepinevich reveals the forces—both overt and covert—that are in play; the ambitions of world powers, terrorist groups, and rogue states; and the actions and counteractions both our enemies and our allies can be expected to take.
As riveting as a thriller, 7 Deadly Scenarios takes you inside the corridors of power, peers into the world of defense planning, and explores U.S. military and political strategy in the past, present, and likely future. The result is a must-read book that will trigger discussion, thought, and—hopefully—action.