Defense Science Board: Offshoring Of U.S. Manufacturing Has Created National Security Vulnerabilities
By Richard A. McCormack
For the first time perhaps ever, a U.S.-government report has stated that the shift of American manufacturing overseas is causing a decline in Americans' standard of living.
Most government economic and trade officials have argued that the movement of manufacturing offshore has allowed low-income Americans to buy cheaper products, saving them thousands of dollars a year and improving their standard of living. Jason Furman, Chairman of the Council of Economic Advisors, stated in a paper he authored shortly before joining the Obama administration that "there is little dispute that Walmart's price reductions have benefited the 120 million American workers employed outside the retail sector."
According to the Pentagon's Defense Science Board, that assertion is in dispute. And the situation of offshore outsourcing of manufacturing is leading to much greater strategic consequences for the U.S. economy and its military.
"Offshoring of manufacturing capabilities resulted from capital inducements such as wage structures, tax rates, weaker environmental regulations or enforcement or available resources," notes the DSB. "These shifts are causing lower standards of living as a result of the loss of fabrication facilities, and are further exacerbated by subsequent losses in underlying technology, such as the migration of supporting design and testing capabilities. Recent financial, political and economic crises have created significant uncertainty regarding continued sustainability of the current innovation system that feeds the defense technology base."
The shift of manufacturing from the United States to China and India is a leading threat to the U.S. military advantage, according to the Defense Science Board in its "Technology and Innovation Enablers for Superiority in 2030" report recently posted on the web for public viewing. "Movement of critical manufacturing capability offshore may pose significant challenges," states the DSB.
The shift of manufacturing to foreign nations "also affects U.S. technology leadership by enabling new players to learn a technology and then gain the capability to improve on it. An additional threat to defense capabilities from offshore manufacturing is the potential for compromise of the supply chain for key weapons systems components."
The United States is not guaranteed economic benefit from the increased production of natural gas, notes the DSB. "Being resource-rich will certainly contribute to economic vigor in the United States, but capitalizing on this new resource will depend on the ability to distribute the goods produced as a result of relative energy price advantages. Selling agricultural, energy and manufactured products requires ready access to the global common, and all global distribution mechanisms are ready targets for adversaries of the United States seeking to gain competitive advantage."
The rise of technically and economically strong foreign adversaries will challenge U.S. superiority in speed, stealth and the precision of weapons systems. Other countries "are likely to develop counters to some or all of the foundation technologies on which the U.S. has come to rely," states the DSB. "The advantages provided by capabilities such as GPS, Internet-based network communications, satellite reconnaissance and stealth aircraft will be diminished and, in many cases, eliminated. To maintain superiority, it will be necessary for the military to develop new capabilities or tactics, techniques and procedures to continue to be effective when capabilities on which it has relied over the past two decades are degraded or denied."
The United States can no longer "plan to rely on unquestioned technical leadership in all fields," states the Defense Science Board. In Iraq and Afghanistan, the U.S. military has exposed its capabilities, tactics and vulnerabilities. "Military actions requiring expensive platforms and equipment with long logistical support tails generate vulnerabilities ripe for exploitation, as the use of improvised explosive devices in Iraq and Afghanistan demonstrated, where a technologically unsophisticated adversary created damage that was disproportionate to the technological and financial investment. By 2030, the increasing distribution and linkages available for technology development will likely enable creation of similar destructive asymmetries on a global scale."
It will be essential for the U.S. military to focus on how to protect assets and gain advantage technologically in order to cope with the rise of sophisticated rivals. "Longstanding U.S. military advantages are at risk in a world of technological parity," says the DSB. "There is ample evidence that adversaries do, or will soon, possess technical capabilities on par with the U.S. in certain important niches. Technological parity does not necessarily mean the U.S. cannot compete militarily, but that participation in conflicts may impose significantly higher costs."
Here are some of the programs the DSB recommends DOD adopt in order to "cope with parity" by 2030:
DSB notes that additive manufacturing could eliminate the need to store and ship inventories of spare parts, but that the Department "should consider not only what capabilities are enabled but also what a potential adversary could do with this technology. The Department must maintain cognizance of manufacturing advances and drive the implementation of these advances into its supplier base as they occur to hedge the economics and time associated with today's manufacturing capabilities."
The DSB report is located at: http://www.acq.osd.mil/dsb/reports/DSB2030.pdf.
Provide us with a comment on this article.
We'll notify you as issues and free stories like this one appear on this site. Sign up for a content-rich, e-mail newsletter. (You will NEVER receive spam.)
Please consider subscribing to Manufacturing & Technology News. You will have access to all back issues dating to 1998, plus receive the current issue electronically and via regular mail. It is all original reporting on the most important stories facing U.S. industry. No advertising. The cost of a new subscription is $495 per year.
Scan Back Issues Comments | About Us | How To Order
Reproduction Rights 2014 Are Granted To This Story So Long As A Link Is Provided To This Source Of Original Content.