March 31, 2014    Volume 21, No. 5

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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:

  • DOD should start developing technology to protect the nation's space assets since a "growing number of countries are acquiring systems and technologies that can deceive, disrupt, deny, degrade or destroy elements of space systems." A $25-$50 million a year program should be modeled after the Submarine Security Program established to protect submarines in the 1970s.

  • The DOD must continue to invest in global positioning "hardening strategies to decrease the vulnerability of GPS to denial or degradation, particularly by signal jamming or spoofing." It recommends that DARPA conduct research on "ultra-cold atoms to provide precision positioning, navigation and timing service in the absence of, or with significantly degraded, GPS signals." A program of $40 million per year for five years "is recommended."

  • Protecting critical U.S. infrastructure and networks such as control systems for power and water utilities, the Internet, communications and financial systems and the air traffic control system from cyber attacks "warrant[s] more serious investigation," says the DSB. If these systems were to fail all at once, it would create a serious security problem for the country. The United States needs networks "inherently self-defensible to cyber attack." DARPA and other defense agencies need to start "self-defensible cyber security demonstration" projects.

  • DOD needs to "think about ways to change the balance of cost in the U.S. favor by developing capabilities that are more expensive for adversaries to counter "than for the U.S. to deploy," says DSB. The idea is to overwhelm an adversary not with a small arsenal of expensive bombers and missiles, but with large numbers of inexpensive long-range conventional weapons that cost less than $2 million per unit at quantities greater than 1,000, have a range of 3,000 nautical miles and a flight time of 10 hours. These weapons should be able to hit a target to within three meters, "deliver blast fragmentation kinetic effects and some penetration capability, maintain uninterruptable situational awareness, and operate in a degraded GPS or electronic warfare environment."

  • DSB recommends that the military develop a low-cost unmanned underwater vehicle to counter the need for expensive nuclear and diesel submarines. The vehicle would use a long-endurance diesel electric propulsion system and would cost $10-$20 million per unit.

  • DARPA should fund the development of an "enhanced vertical lift aircraft" to replace the Army's current generation of outdated helicopters that have limited range and slow speed. Much of the technology already exists for a high-tech vertical lift aircraft. Advanced rotor designs, optimized airframe aerodynamics, lightweight structures and efficient engines are all "sufficiently mature to proceed to an X-vehicle demonstration program," says DSB. It recommends that $20 million in "augmented" funds be spent by DARPA for five years "to assure more than one concept reaches flight test."

  • Warfighters need lighter weight equipment, starting with batteries. Current soldier packs weigh more than 100 pounds with 20 to 30 pounds of that dedicated to electrochemical batteries. Using current energy technologies "there is not much hope for dramatic improvement" in weight reduction or energy density of these systems, which range from 3 to 5 kilojoules per cubic centimeter. But radionuclide batteries can provide energy densities of 100,000 kilojoules per cubic centimeter "and offer the potential for breakthrough performance in power pack endurance," says the DSB. "The development of safe, affordable, lightweight, reliable and very long-lived radionuclide power sources should be vigorously pursued."
    There are currently designs for radioisotope batteries the size of a D-cell battery that can deliver 1 to 5 watts of power continuously for years and weigh less than one pound. These batteries can power remote sensor stations for years and provide special forces with power for months at a time. "Much work is needed in order to realize the potential of very high energy density radionuclide power and very long-lived batteries," says DSB. It recommends a team of experts be given $25 million for five years to help develop the technology.

  • Warfighters need a better diet when in the field. "A warfighter's diet, whether provided in a meal-ready-to-eat or an on-base dining facility, mirrors the standard American diet," says DSB. But that is not good enough, since most soldiers take food supplements and energy boosters, leading to a force that is "stressed out, less healthy and less effective than those in generations past," says the DSB, which recommends a research program in diet, supplements, nutraceuticals, pharmaceuticals, and human biology aimed to improve the health and cognitive ability of the force.

  • DOD must assess the revolution taking place in manufacturing technology, caused by the rapid and rising global demand for high-tech manufactured goods. The use of computers, low-cost sensors and robotics could radically reduce the cost of producing weapons systems, giving "new meaning to the old adage 'quantity has a quality all its own,' " says DSB. In order to counter adversaries' own capabilities, the DOD should develop a "reliance on very large numbers of reasonably capable systems. For example, by taking advantage of advances in manufacturing and developments in guidance, navigation and control, it may be possible to field a cruise missile with modest capabilities at a cost of between $100,000 and $200,000."

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:

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