wikipedia.com (public domain)

Why U.S. Drone Policy Foreshadows the Defense Reform Challenge Ahead

Adapting to a more commercialized defense acquisition process will pit DoD's efforts to maintain control over intellectual property against the pressures of the global marketplace.

It’s no secret that there's much to be desired in the way the Department of Defense acquires the technologies and weapon systems required to underpin global security. An endless requirements process, special interest politics, and an oligopolistic defense industry culminate in inflated costs and difficulties harnessing disruptive technologies for U.S. strategic advantage.

A promising new proposal for defense acquisition reform, first advanced in a report by the Center for a New American Security and later in a speech by Deputy Defense Secretary Robert Work, calls for a new “offset” strategy designed to counteract the United States’ flagging technological superiority through greater integration with innovators in the commercial sector. With traditional defense firms devoting less and less to research and development each year, the theory goes that DoD will be better positioned to keep up with the rapid pace of technological change by attracting suppliers tried and tested by the pressures of the global marketplace.

With commercial innovation increasingly outpacing that driven by defense R&D, it seems almost inevitable that DoD will put reforms to improve collaboration with the private sector at the forefront of its strategy. Nevertheless, transitioning to a more commercialized and globalized defense supplier base is not without its own share of challenges.

For established multinationals as well as U.S. start-ups with global aspirations, going into business with the Defense Department can be a risky proposition, given current intellectual property laws that grant DoD considerable control over publicly funded technologies. Despite the prospect of winning huge government contracts, several leading firms have already displayed reluctance to team up with DoD. For example, after acquiring the robotics firm Boston Dynamics, Google famously divested it from all future DARPA contracts citing fears that DoD could assert IP claims over its future designs.

The intricate web of U.S. laws and international agreements governing the trade of defense goods represents another significant hurdle. Since the end of the Cold War, the U.S. and its allies have coordinated wide-ranging export control regimes to prevent sensitive technologies from falling into the hands of hostile nation-states and terrorist organizations. Civilian technologies that are adapted for military applications – everything from rocket engine components to high-performance computer parts – are given “dual-use” status and can be subject to strict licensing by the Departments of State and Commerce. And even then, they must be sold exclusively within the 41 member states adhering to the multilateral Wassenaar Arrangement.

This means that by winning a big defense contract, a firm could actually be at greater risk of having its IP classified as a controlled good, potentially limiting its ability to compete in a global environment.

The inverse might also be true. The transition to a more commercial acquisition strategy will likely put substantial economic pressure on traditional defense suppliers that generate revenue primarily through government contracts. Facing stiffer competition from foreign and domestic challengers, defense contractors are expected to push for greater opportunities to expand their consumer base abroad in order to offset shrinking market share and potential job losses.

The market for unmanned aerial vehicles (UAVs) is case in point.

The United States has long been the global leader UAV technology, in both the military and civilian arenas. In FY 2013, the Defense Department spent $3.8 billion on procurement and R&D for unmanned aerial technology, more than the rest of the world combined. But in accordance with the Arms Export Control Act and the Missile Technology Control Regime (MTCR), U.S. manufacturers are prohibited from selling drone technologies to other countries, including U.S. allies.

This has been the subject of vigorous debate within the national security community. In a June 2014 Council on Foreign Relations report, Micah Zenko and Sarah Krebs argue that U.S. export restrictions are essential to stemming the proliferation of UAV technologies to non-state actors, who could potentially use them as a “DIY air force” and threaten regional stability. Hezbollah, for instance, has been reported to use small surveillance drones within Israeli airspace to spy on troop positions.

Critics fire back that export controls put U.S. companies at a competitive disadvantage vis-à-vis firms from Israel and China – states that choose not to abide by the MTCR. According to Stimson Center expert Mary Cummings, “By not competing in the global marketplace, our drone industry is becoming stagnant…this puts the U.S. at a direct disadvantage.”

At present, 23 countries currently have the capability to produce drones. With the global market expected to grow by over 70 percent to $11.4 billion between now and 2022, the calls for deregulation are only going to grow louder.

As recently as July, the Wall Street Journal reported that State Department officials had been in talks to revise the current rules governing drone sales and hinted that their eventual decision would be “very helpful to exporters and also to our allies.”

The U.S. drone industry is hardly alone in this regard. If drone exports do become more liberalized, who’s to say that other closely-held technologies, including those involved in launching satellites, robotics, or encryption, won’t come next? In any case, the globalization of the defense technology market will have huge implications on global security in the decades ahead.

Commercializing the defense acquisition process could very well become a two-way street: the Department of Defense gains a global market from which to choose the most innovative technologies at the lowest cost; however, it might also mean that the global market accelerates the diffusion of U.S. technological superiority.

Disclaimer

This post is written by Government Business Council; it is not written by and does not necessarily reflect the views of Government Executive Media Group's editorial staff. For more information, see our advertising guidelines.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.