COMMENTARY
As the NDS notes, “New commercial technology will change society and, ulti- mately, the character of war. Tat many technological developments will come from the commercial sector means that state competitors and non-state actors will also have access to them, a fact that risks eroding the conventional overmatch to which our nation has grown accustomed.” Recognizing the importance of speed and the dominance of the commercial realm’s technology progress, the question becomes how we get it to our Soldiers quickly. How do we tap into, adapt and adopt the inno- vation being developed by commercial entities at a rate faster than China and Russia can?
MORE NEEDS DOING We have taken some good, necessary steps in allowing commercial compa- nies to more easily engage in contracting with our bureaucratic acquisition and contracting policies, such as increased use of other-transaction authority. However, China has a distinct advantage to tapping
into its own advancing commercial tech- nology, as Flournoy noted in her Foreign Affairs piece. China’s “doctrine of ‘civil- military fusion,’ ” she wrote, “requires that any commercial or academic tech- nological advancement with military implications be shared with the [People’s Liberation Army].”
A survey of the world’s top defense contractors shows America with the top five defense revenue-producing compa- nies in the world. However, the American economic model, with the exception of the Boeing Co., typically yields a distinct line between defense and commercial companies. Te world’s No. 1 defense revenue-producing company, Lockheed Martin, garners 95 percent of its reve- nue from defense, with the other top companies between 75 percent and 94 percent. China contradicts this model. With five companies in the world’s top 15 for defense revenue, Chinese companies are also heavily involved in commercial enterprises, with only 20 to 38 percent of
their revenue being generated by defense. This provides for an easier opportu- nity for Chinese companies to transition advanced commercial technology into defense products.
If we are to retain our overmatch capa- bilities, we will need the advanced technologies being developed by our most innovative commercial companies. We must stop simply providing ways that allow commercial companies to provide defense products. We must develop more creative ways to actively attract and encourage these world-leading technology companies into providing our Soldiers the war-winning products that will deter our competition. Tere are specific ways that we can do that.
Expand the use of other-transaction authority. One of the primary ways that innovative commercial companies connect to defense projects is through other-transaction authority. Te use of that mechanism has shown an impressive
DIFFERENT PORTFOLIOS
Unlike the U.S. defense industry, which produces most of its revenue strictly from defense, China’s top defense companies are also heavily involved in commercial enterprises. (Graphic by U.S. Army Acquisition Support Center, statistics from Defense News and the International Institute for Strategic Studies)
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