Technological Dominance Threatened By Fiscal Uncertainty

By Claudette Roulo

DoD News, Defense Media Activity

WASHINGTON, Oct. 28, 2014 – The Defense Department is passionate about technological superiority, but this longtime advantage is now being challenged by factors including budget uncertainty and complacency, the assistant secretary of defense for acquisitions said today.

"Our superiority has been eroding, because the world has been studying us. And it's adapted to what we have delivered or are developing," Katrina McFarland told an audience at the TechAmerica Foundation's Vision Forecast Conference here.

Ongoing budget uncertainty is threatening research and development programs that might find new ways of technological dominance, she said. "Our superiority is directly related to the level of R&D in our investment pipeline," McFarland explained, and the current budget climate makes it difficult to keep this pipeline open.

The nation's technological superiority is not assured if R&D is treated as a variable cost and more time is lost to budgetary delays, the assistant secretary told the audience. "Time is not recoverable," she added.

A global competition

The United States is now in a global technological competition for human resources, financial resources and basic research resources, McFarland said, a climate fraught with incredible challenges in this area of technology.

"We've become complacent and risk-averse," she said. "We rely on history, and we believe that … we're OK because we've been dominant for decades. The problem is that is no longer factual, and we are seeing clear evidence that we have a challenge in front of us, [and] what we must do is meet it head-on."

The country relies on offset strategies -- technological solutions to challenges that might otherwise be overwhelming, McFarland said. In the 1950s, the Eisenhower administration relied on nuclear weapons and long-range airpower instead of trying to match the Soviets weapon for weapon and troop for troop. More recently, precision-guided munitions, stealth aircraft and GPS have shaped conflicts from the Gulf War to today's campaigns in Iraq and Syria.

"So what's our next offset strategy?" she asked. "How are we going to address this future?"

At the same time the nation's technological dominance is being threatened, budgets are increasingly restricted, McFarland said.

"We're in a period of uncertainty, and it's reflected everywhere around us," the assistant secretary said, noting that sequestration spending cuts will resume in fiscal year 2016 unless Congress changes the law.

"Sequestration for us is horrendous. … This isn't rhetoric. This is real for us. Funding for the accounts that exercise our design engineers [has] declined nearly 50 percent in the last five years. That's not trivial. That's engineers -- that's the basic foundation of innovation."

Invest to survive

History has shown that investment in the future during lean times -- in R&D, specifically -- is a predictor of who will best survive a budgetary downturn, McFarland said. So to guarantee the nation is prepared when the world emerges from the current period of fiscal uncertainty, she added, the Defense Department must first address the existing challenges to national security, "or we will not be reality in future -- they will be."

Then, she said, "we need to address affordability in current and future systems, and we must develop a technological surprise."

The eight focus areas of the Defense Department’s Better Buying Power 3.0 initiative have technological dominance as a common goal, McFarland said. BBP 3.0 seeks to develop technical excellence and innovation, she added.

"It doesn't eliminate 1.0 or 2.0, it builds upon it, narrowing its scope to focus on our future," the assistant secretary said.

The acquisition community is concentrated on the future in addition to today, she said. "Our defense markets are cyclical, but we must have an upturn. It's eventual, but it will happen. History has shown us.

"This country is renowned throughout the world for [its innovation],” the assistant secretary continued, “and we need to continue that in order to retain where we are and our freedoms."

And that includes taking more research risks, McFarland said.

"If we want to continue to be the superior force, we need to take chances, and taking risks is not optional," she added.