“Revamping the Department of Defense for Enhanced Deterrence Against China and Victory in Ukraine – A Comprehensive Guide for Congress”

US Must Embrace Commercial Technologies and Private Capital to Win Future Wars

The US is currently facing two major challenges: a proxy war with Russia and the need to deter a potential China cross-strait invasion of Taiwan. Winning future wars will require a state to use both traditional weapons systems and rapidly deploy commercial technologies like drones, satellites, and targeting software into operations at all levels. Unfortunately, the Department of Defense (DoD) is not organized or equipped to integrate commercial technologies and private capital into defense operations at scale.

China is employing a “whole of nation” approach, enabling the People’s Liberation Army (PLA) to integrate commercial technology and private capital as a force multiplier to dominate the South China Sea and prepare for a cross-strait invasion of Taiwan. Conversely, the DoD is currently focused on executing traditional weapons systems and operations with traditional vendors and research centers. However, private capital could be a force multiplier for the US and add hundreds of billions of dollars outside of the DoD budget.

Civil/Military Fusion: A Whole of Government Coordinated Effort

China has engaged in Civil/Military Fusion, a coordinated effort to employ disruptive commercial technologies for the country’s national security needs. To fuel the development of defense-critical technologies, China has tapped into $900 billion of private capital in Civil/Military Guidance (Investment) Funds, and taken public state-owned enterprises to fund the development of new shipyards, aircraft, and avionics.

The US Must Adapt and Adopt New Models at the Speed of Adversaries

China is already ahead of the US in developing modern defense platforms, such as autonomous systems and swarms, which threaten legacy systems, vendors, organizations, and cultures. Viewing the DoD budget as a zero-sum game has turned major defense primes and K-street lobbyists into saboteurs for DoD organizational innovation, which threatens their business models. The US needs to adapt and adopt new models at the speed of its adversaries.

Congress’ Role in Optimal DoD Organization and Structure

Only Congress can alter the status quo and help the US to deter and prevail against China. The DoD must create a strategy and a redesigned organization to embrace untapped external resources, including commercial innovation and private capital. Currently, the DoD lacks a coherent plan and an organization with the budget and authority to do so. Congress must create a new defense ecosystem that leverages the external commercial innovation ecosystem and private capital as a force multiplier.

Changes within the DoD needed to optimize its organization and structure include:

– Creating a peer organization, the Under Secretary of Defense for Commercial Innovation and Private Capital
– Scaling up the new Office of Strategic Capital (OSC) and Defense Innovation Unit (DIU) to be the lead agencies in the new organization
– Reorganizing DoD Acquisition and Sustainment to allocate its budget and resources equally between traditional sources of production and creating new arsenals
– Reorganizing DoD Research and Engineering

Congress must act now to establish a commission to determine what reforms and changes are needed to ensure that the US can fight and win future wars. Failure to do so could result in catastrophic failure in a future conflict and put US security at risk.

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