The U.S. Defense Industrial Base: Can It Compete in the Next Century?

Key Takeaways


1. There is a greater threat perception of China vis-a-vis other adversaries, with a majority of survey respondents consistently supportive of defending against China even though doing so may have economic consequences.  China is viewed as a strategic competitor, and a plurality of survey respondents supported placing constraints on China, even if there were economic costs to U.S. firms.


2. There is near consensus that the United States’ military advantage is shrinking relative to key adversaries and one of the means of addressing this trend is by making it easier to procure domestic commercial technologies. By and large, respondents were supportive of the government investing more in the defense industrial base, making it easier for the defense department to procure commercial technologies, and limiting the dependence on foreign suppliers.


3. There is broad acceptance that the U.S. defense industrial base is vulnerable and that the federal government bureaucracy makes it harder for commercial firms to do business in the federal market. While experts differed on the approach, a majority favored “Buy American” regulations, reforming the acquisition process to make it easier for non-traditional suppliers, cutting regulations, and having the government pay more to increase competition.


4. There is broad consensus that the Department of Defense (DoD) budget, requirements, and contracting processes are unnecessarily burdensome and too bureaucratic.  Experts believe that it is in the long-term interest of the DoD to engage in policy changes that make the process less bureaucratic in order to increase competition and foster a strong defense manufacturing base.


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