The United States has long maintained a causal relationship between industrial capability and national security. As our domestic manufacturing capabilities continue to erode and fall behind those in other global superpowers, the outcomes are predictable. In a recent series of war simulations, research organization RAND pit the U.S. against China and Russia. The results were startling. We lose quickly and badly.
It goes without saying that another world war would produce catastrophic loss of life and unimaginably bad postwar life for survivors. That’s a dark prospect made even more frightening by the reality that we have reasonable grounds for the inevitability of another war. Our nation’s leaders are working to do everything possible to deter and avoid such a scenario.
“Long-term strategic competitions with China and Russia are the principal priorities for the Department, and require both increased and sustained investment, because of the magnitude of the threats they pose to U.S. security and prosperity today, and the potential for those threats to increase in the future.”
~ The 2018 National Defense Strategy
Our domestic manufacturing capability must be a central consideration in this commitment. It’s reasonable to correlate that one of the reasons the U.S. loses in the RAND simulation is the erosion of our domestic manufacturing capabilities – especially in areas involving advanced technologies such as additive manufacturing, sensors, and the Industrial Internet of Things (IIoT) – and particularly in comparison to our adversaries. Make no mistake, the “Made in China 2025” vision may be advertised as an effort to help the Chinese population “escape the middle-income trap,” but it is squarely focused on unseating the U.S. as the world’s military and economic superpower. Should that happen, the results would be far worse than economic.
The Past and Future of U.S. Manufacturing
The U.S. is not without a foundation for competitive advancement. The Manufacturing Institutes, established in 2014, was a step in the right direction. Five years later, we need to do more. In a recent Toffler Associates research study, approximately 85% of manufacturing experts highlighted the future workforce as the biggest challenge to U.S. capabilities – both in terms of filling unmet current labor demands and training for necessary future skills.
All these unfilled jobs translate to slower capabilities and production rates – which puts the U.S. at risk. Solving the problem and building resilience into the manufacturing ecosystem demands a process of teaching the necessary skills earlier and with more of a focus on global competitiveness than is currently happening. With stigmas around trade and vocational schools, and STEM talent shortages starting at the collegiate level, some in the industry are trying to mitigate the issue by establishing partnerships with ‘alternative’ institutions like trade schools and junior colleges. Students who train in areas that fill specific manufacturing capabilities gaps gain job guarantees – which ostensibly benefit the individual, the company, the manufacturing industry, and U.S. national security.
But even this intentionality is not enough to secure the standing of the U.S. It’s not happening fast enough to fill our talent pipeline. And the training is still more generalized than focused on a specific area of advanced manufacturing. China, on the other hand, has mandated that capital is directed at advancing the capabilities in particular areas that have obvious and grave impacts on their ability to compete as a global superpower. For example, Chinese investment in AI will soon overtake ours in the U.S. By 2030, it is projected to be a $1 trillion industry. Already, many of the critical technologies used in modern weapons systems (like printed circuit boards and semiconductors) are manufactured in China.
The U.S. is not without efforts to advance our technology production. The Department of Defense (DoD) invests heavily in modernization and advanced technologies. Herein lies the rub. Their focus is more on the technologies themselves – and less on how the country can improve and direct resources toward identified and articulated top risks.
A simpler way of saying this is that while the technology is critically important, so are the people who create and deploy it.
Rectifying the imbalance will be no easy task. The DoD is operating under a 60-year old acquisition reform promise to its vendor stakeholders. Early on, this promise was less risky – products, weapons, and systems had useful lives that spanned decades. Today, the processes, policies, and procedures are not only arcane; they are dangerous. Technology is developed and rendered obsolete at an incredible velocity. Moreover, its impact on and integration with manufacturing continues to grow as things like AI, IoT, and Machine Learning reshape how we manufacture, employ, and measure security capabilities.
The solution is clear, slow, and starts at the top
The DoD has been talking about acquisition reform since the 1960s. They’ve taken a Second Wave approach that has led to complete desynchronization with respect to the global manufacturing ecosystem. As the RAND war games demonstrated, we have reached an inflection point, and the outcomes could have disastrous consequences.
Perhaps more than ever before, the time has come for the DoD to take responsibility for reforming a system that is out of synch with other global leaders. The only real way to close the gap and strengthen our national security is to embark on earnest acquisition reform that drives practices like rapid prototyping. We need approaches that produce the right products and unleash the creativity necessary to employ them.
As is so often the case in our modern geopolitical environment, the solution is fundamentally human. The U.S. simply lacks the people needed to move the country forward as a competitive force. The DoD is not solely responsible for this shift. It’s a solution that will take partnerships, incentives, educational reform, and a commitment from the Pentagon to take the lead.
John has more than eight years of experience working with large government agencies and multinational corporations. Specifically, he has worked with organizations’ senior leaders and executives to develop long-term strategies, evaluate strategic initiatives, implement risk mitigation strategies, and design approaches to change management. Prior to beginning his career as a consultant, John graduated with a Bachelor Arts—with honors—from the University of Richmond and with a Master of Business Administration from the University of Virginia Darden School of Business.
Toffler Associates is a future-focused strategic advisory firm. Our Future Proof® business consulting approach helps global leaders understand how future shifts impact current decisions so they can take advantage of opportunity, manage risk, and create future value.
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