GREG LITTLE is a senior counselor at Palantir Technologies.

IAN CRONE is a member of the technical staff at Palantir Technologies.

In 1980, Detroit was in a fight for its life. Two oil shocks had pushed American buyers toward fuel-efficient Japanese imports, Chrysler had just been rescued by federal loan guarantees, and the Big Three were watching their market share erode year after year. Executives no longer dismissed Toyota as a maker of inexpensive economy cars in a different category; they acknowledged Japan as a serious competitor to their core business. What they did not acknowledge—what few of them even perceived—was the Toyota Production System. Detroit believed it was losing on fuel economy, labor costs, and exchange rates: problems that better products and better terms could presumably fix. To some extent that was true, but Toyota understood that the real competition was system against system.

For years, American automakers focused on horsepower, styling, dealer networks, and consumer preference. Toyota was building something more consequential: a production system that connected workers, suppliers, engineers, logistics, quality control, and leadership into a continuously learning enterprise.

The Toyota Production System was more than a collection of efficiency techniques. Its two pillars—just-in-time production and jidoka, or “automation with a human touch”—established a fundamentally different way of seeing and managing the enterprise.

Jidoka is the more remarkable of the two principles because it hard-wired human-like judgment into the machines themselves. The idea predates the automobile business entirely: Sakichi Toyoda, the company’s founder, invented an automatic loom that stopped instantly if a warp or weft thread snapped. Because the machine could distinguish normal from abnormal conditions, defects were identified and the process stopped before they turned into expensive mistakes. In Toyota’s plants, any worker could stop the production line upon discovering a quality problem—and so could the machines.

The Toyota Production System extended beyond the factory floor. Suppliers became integrated partners rather than transactional vendors, while data was used to prevent tomorrow’s defects rather than merely explain yesterday’s failures. Every production run generated feedback, every problem became an opportunity to improve, and every improvement strengthened the broader system.

By the time Detroit understood what was happening, Toyota’s advantage was bigger than any individual vehicle or factory. It was embedded in the relationships, processes, information flows, management practices, and learning loops that connected the enterprise. American manufacturers eventually adopted many of Toyota’s methods, but they spent decades trying to catch up to a system that had evolved under the surface while they remained focused on the product.

Something similar is happening today with America’s defense industrial base, a system that is fragmented, expensive, and slow to learn during a period of rapid change. America cannot solve the problems with this system merely by routing more money through the same fragmented processes. Just as Detroit could not defeat Toyota by adding another shift to an inferior production system, the Department of War cannot create a twenty-first-century arsenal by applying more funding, oversight, and reporting requirements to a twentieth-century operating model. What it needs is a cutting-edge industrial operating system that gets better and smarter over time.

Going to War With the System You Have

Toyota’s lesson is fundamentally about how to win an industrial competition, and the lesson applies to more than cars. Wars are also decided by industrial systems.

America’s logistical and production juggernaut—what we now nostalgically call “the Arsenal of Democracy”—won World War II. In the present day, Ukraine is holding its own against Russia with a highly adaptive industrial system capable of developing and scaling production of drones to counter the latest threats encountered on the front line. Now Epic Fury has exposed shortcomings in America’s industrial system, which must be able not only to enter a fight with overwhelming force but to sustain the fight over the long term.

The lessons of these conflicts are vital to the United States’s competition with China, a challenge with far higher stakes than the Japanese auto industry’s challenge to Detroit in the 20th century. Much of the debate focuses on visible measures of military power: ships launched, aircraft delivered, missiles fielded, budgets approved. Those measures are important, but they are the outputs of an industrial system. More important than simply counting missiles is whether the system producing them can learn, adapt, scale, repair, and replenish faster than its competitor.

China brings a formidable industrial system to the fight. This system is neither perfectly coordinated nor perfectly efficient, but it is well suited for its strategic goals. It only needs to convert its advantages in commercial manufacturing, shipbuilding, electronics, critical materials, infrastructure, and state-supported investment into military capability faster than the United States can overcome its own fragmentation. Its military-civil fusion approach has intentionally reduced barriers between commercial and national-security industries, and its dual-use shipbuilding ecosystem demonstrates the strategic value created when commercial orders sustain the infrastructure, suppliers, workers, and engineering capabilities that also support naval construction and repair. Analyses of China’s naval buildup and dominance of global shipbuilding demonstrate why industrial scale, supplier depth, workforce, and production experience matter as much as the design of any individual vessel.

It should be no surprise that Chinese EVs are taking the world by storm just like Japanese autos did a half-century ago: China is operating an industrial system that is large, well coordinated, adaptive, and inherently dual use. The West is contending with the China Production System—and we need to overhaul our own system, incorporating our own strengths and values, to prevail.

The United States still possesses extraordinary advantages: exceptionally capable submarines, aircraft, missile defenses, satellites, sensors, and software; world-class engineers; deep capital markets; leading research institutions; innovative commercial companies; and an unparalleled network of allies. The problem is that these strengths are treated as a collection of programs and discrete things rather than as a system that adapts and improves over time.

The Pentagon’s first National Defense Industrial Strategy recognized the importance of resilient supply chains, workforce readiness, flexible acquisition, and economic deterrence, and its subsequent implementation plan assigned responsibilities, resources, and metrics to those priorities. The 2026 National Defense Strategy similarly calls for rebuilding America’s defense industry and restoring its role as the world’s premier arsenal. The strategic direction is becoming clear; turning strategy into coordinated execution remains the harder task.

Program offices optimize individual acquisitions. Prime contractors optimize contractual performance. Suppliers optimize production schedules. Logistics organizations optimize sustainment. Each institution may perform its assigned mission well while the ecosystem as a whole underperforms. A recent Government Accountability Office assessment found the Department’s supply-chain visibility initiatives uncoordinated, limited in scope, and unable to provide sufficient insight into lower-tier suppliers, raw materials, and components.

Consider a missile program that receives billions of dollars in additional funding. Beyond a certain point, money alone will not create more interceptors. The program may depend on a rocket-motor supplier that also supports several other weapons, a sub-tier manufacturer producing specialized insulation or nozzles, a limited testing facility, or a workforce that takes years to develop. The government’s recent investments to expand solid-rocket-motor component production illustrate how a single sub-tier component can constrain an entire portfolio of weapons, and previous assessments of competition within the defense industrial base have documented significant supplier consolidation in exactly these areas. Additional funding may simply send more demand toward the same bottleneck without increasing output—and few leaders can see the shared constraint across the portfolio.

Assembling the War Machine

That example reveals the central problem: leaders lack the information needed to determine which constraint to address first, which supplier to expand, which alternative source to qualify, or which program should receive scarce capacity. They cannot consistently see how a disruption in energetics, semiconductors, castings, critical minerals, test infrastructure, or skilled labor will ripple across multiple weapons over time.

For decades, the Department of War has invested in command-and-control systems that help leaders understand the battlefield: commanders can see the location and status of ships, aircraft, formations, sensors, and threats, and integrate that information to accelerate decisions across domains. Yet the industrial ecosystem that produces, repairs, sustains, and replenishes those forces is still managed through fragmented data, disconnected workflows, periodic reports, and lengthy coordination processes.

The comparison with automobile manufacturing has limits. Defense systems involve classified requirements, low production volumes, exacting standards, specialized materials, congressional funding rules, and threats that evolve during development. The lesson is not necessarily that missiles should be built like Corollas; it is that both enterprises depend on supplier integration, quality, visibility, flow, feedback, and continuous learning—and the more complex the product, the more consequential the operating system behind it.

Artificial intelligence and modern software now offer the United States an opportunity to create that operating system across the defense ecosystem. Research on AI as a general-purpose military technology argues that its most profound strategic effects may emerge from broad productivity gains and spillovers across an industrial base rather than any particular tool or weapon. This is jidoka at national scale: the human-like judgment Sakichi Toyoda built into a single loom can now be imbued into thousands of machines, workflows, and decisions across the enterprise—sensing abnormality, stopping defects before they propagate, and forcing problems into the open where they can be fixed. Program leaders, suppliers, manufacturers, depots, combatant commands, and policymakers could operate from a continuously updated picture connecting operational demand with inventory, production capacity, supplier risk, workforce, and delivery timelines. AI could identify constraints before schedules slip, expose shared dependencies across programs, and establish faster learning loops between operators, engineers, factories, and suppliers. The objective is not to automate every decision, but to give human leaders a more complete understanding of the choices, dependencies, and consequences before them.

This is the idea behind what we call War Machine. The concept should not be confused with another dashboard, database, or acquisition program. It is the recognition that industrial power has become a command-and-control problem. What Toyota accomplished across its production enterprise, the United States must now accomplish across a far larger and more complicated network of government organizations, defense primes, commercial companies, suppliers, depots, shipyards, laboratories, and operational commands.

War Machine is valuable not merely because it shows leaders the industrial base, but because it enables better decisions across programs, suppliers, money, time, and risk: which bottleneck to attack first, which supplier requires intervention, where additional capacity will matter most, when consumption may exceed replenishment, and which investment will produce the greatest combat effect per dollar and per month. The objective is coordinated action from the factory to the foxhole.

The United States must connect operational demand to industrial capacity, manage constraints across portfolios rather than within individual programs, and establish a shared operating picture across government and industry. It must build learning loops that carry information from operations to engineers, factories, and suppliers, and back to the force—and it must measure success through production, delivery, readiness, and operational outcomes, not money obligated, contracts awarded, or activities completed.

Detroit’s mistake in the last century was believing it was competing car against car when it was actually competing system against system. America must not make the same mistake in national security. The competition with China is more than a race to design the best weapons; it is a race to build the best system for producing, adapting, repairing, replenishing, and sustaining them.

THOMAS DAY is the executive director of Frontier Mission Network, a business consortium dedicated to serving the Chicago region’s national security and defense technology sector. He is also a lecturer in tech-based economic development at the Harris School of Public Policy at the University of Chicago.

Last month, the White House Office of Science and Technology Policy (OSTP) released Science: A New Golden Age, a detailed roadmap for overhauling American science. It summons the legacy of Vannevar Bush’s Science: The Endless Frontier, a document issued in 1945 that laid the foundation for the American innovation engine, and argues that the model now needs to be updated.

Researchers, founders, capital investors, and regional policymakers should read and reflect on OSTP’s proposed reforms, then think about how to respond. There is much in the document that warrants serious attention and transcends partisan politics. As left-of-center blogger and economist Noah Smith puts it: “If Democrats take back the White House in 2028, they need to pick up this plan, slap a little token partisan gloss on it, maybe have Claude rewrite the language a little, and fully fund it.”

Indeed, the OSTP recommendations, if enacted, funded by Congress, and put into action locally, could revive American R&D and chart a long-term roadmap as the American economy navigates the age of AI. Rather than fight to defend the status quo, regional innovation economies should recognize that many of the OSTP’s proposed reforms are sensible and respond with collaborative action.

It Starts With Problems

In his introduction, White House Office of Science and Technology Policy Director Michael Kratsios notes that the “greatest technical achievements of the last century came about because leaders in government identified national priorities and marshaled the resources to accomplish them.” In doing so, Kratsios echoes the words of Bush in the opening chapter of Science: The Endless Frontier, similarly drawing a line connecting American science to national problems: “(W)ithout scientific progress no amount of achievement in other directions can insure our health, prosperity, and security as a nation in the modern world.”

If the federal government is going to mobilize science in response to national problems, regions should be asking how they can respond, organizing their own institutions and resources around the problems the federal government has identified. This was a point made by retired Col. Peter Newell, former director of the Army’s Rapid Equipping Force, in a podcast interview I did with him earlier this year. I asked how we could grow our organization, Frontier Mission Network, into one that actively creates value for the national security community and the broader U.S. economy.

Newell’s response: “It starts with problems.” This is the opposite of starting with a technology or an idea for a business you think might solve a problem. To create value, understand the national problems first and mobilize, he told me.

Regions can point to local research assets and to new R&D funding awards, but if the science being done in their regions is not solving national challenges, its economic and national strategic value is unlikely to be realized—and certainly will not be under the OSTP’s new framework.

Build Around Scientists With Long-Term and Flexible Funding

Vannevar Bush’s model for mission-driven science channeled federal funding through universities, enabling researchers to conduct research in place. The OSTP report argues that we need to fundamentally rethink this central role universities play in the American innovation engine.

Its criticisms of universities focus on cumbersome bureaucracies—“Universities … extract significant overhead from researchers, which funds a mix of legitimate shared infrastructure and growing administrative bloat”—and misaligned incentives. PhD candidates are at universities for relatively short periods, the OSTP report notes, undermining long-term knowledge retention. “[N]o technology company would entrust its core R&D to a workforce composed primarily of temporary trainees, yet this is the standard model in academic research.” The report also calls into question the professional incentives placed on PhD candidates and professors to publish and accumulate citations.

No doubt many inside universities will react negatively to the OSTP’s criticisms. Many others have known for some time that without fundamental reforms around citation incentives, this will be the result, put graphically:

To support breakthrough science, the OSTP report calls for a fundamentally new approach to grantmaking. It advocates directing more funds directly to scientists and empowering recipients to take their awards with them if they move to a new employer—including a startup—without losing federal funding. If enacted, this reform would expand portable grant programs like the National Science Foundation’s Graduate Research Fellowship Program. “The (NSF Graduate Research) fellowship provides three years of support with full portability across institutions, freeing recipients to follow intellectual opportunity,” the report notes. “The results speak for themselves: more than forty GRFP alumni have gone on to become Nobel laureates.”

The OSTP also calls for longer-term awards, moving away from project-based awards that yield safer research proposals. “[W]hen investigators receive longer-horizon support with tolerance for early failure, they produce portfolios with both more hits and more misses, the signature of genuine exploration.”

Finally, the OSTP calls for expanding portfolio-based approaches to funding science, empowering program managers closest to technological frontiers to make bold, multi-million-dollar bets, an approach championed for decades by the Defense Advanced Research Projects Agency.

If enacted, these reforms could mark the most fundamental change in American science in 80 years—moving immeasurable amounts of power and funding away from universities and into the hands of researchers. Some will protest, but with the ranks of college administrators skyrocketing in recent years, let’s not confuse enhanced competition for talent with undermining American science. I certainly won’t be going on a hunger strike to protect privileged institutions while they revel in single-digit undergraduate admissions rates.

Regions should prepare now by proactively identifying their best scientists and thinking through how to directly engage and retain researchers rather than assuming universities will anchor them locally.

Imagining New Models for Public-Private R&D

In 1997, Intel, Motorola, and other companies, with support from the U.S. Department of Energy, formed the Extreme Ultraviolet Limited Liability Company, a consortium established to advance EUV technologies that would later accelerate advanced chip production (more on that in a bit). EUV LLC was built to solve a problem—design the next generation of tools that could make the most advanced semiconductors imaginable—and then shut down. The photolithography methods EUV LLC developed helped make the modern chip industry possible.

Perhaps the legacy of EUV LLC is as much about the public-private partnership model they pioneered as the technology it produced. To fund research into EUV lithography, private backers purchased shares of the company in exchange for the right of first refusal of what it produced.

This model is just one that OSTP report argues should be supported and replicated.

The OSTP report also calls for new nonprofit-focused research organizations, or FROs, that hire researchers within a time-bounded vehicle focused on a specific technical milestone that, if successful, would produce public intellectual property. You might think of FROs as a mini national laboratory model that could be infinitely replicated to pursue defined objectives. “The time-limited nature (of FROs) also gives scientists who complete the project a chance to return to academia, or to spin off a startup and raise venture capital,” the OSTP report notes.

Another idea: In July, the National Science Foundation announced a $47 million pilot program to jointly fund PhD students with university and industry partners. Funded Ph.D. candidates do their first few years in an academic setting and complete their final year with a tech company.

Regions should think about responding proactively by building new, mission-focused institutions that reflect the role of profit motives in advancing science. Such an approach would require departing from assumptions about who should support basic research—assumptions I, too, have long held.

For eight years, I have taught a class in regional tech-based economic development at the University of Chicago’s Harris School of Public Policy. One point I make midway through the course is that the growing share of business-funded R&D is drawing too much focus toward profit motives and away from knowledge creation, historically done at national and university laboratories.

The OSTP report counters that this framework is outdated, pointing to a greater share of science acting in “Pasteur’s Quadrant,” or use-inspired basic research. It also points to the role of private capital in enabling research efforts to scale. “Venture capital mobilizes private resources toward high-impact technologies….Ph.D. students and professors can now raise hundreds of millions of dollars to found companies that pursue fundamental breakthroughs.”

Whatever the right balance of public and private R&D, it is indisputable that both forms can lead to genuine breakthroughs and innovation. To cite just two examples, the potential for nuclear fusion to generate more energy than it expends was demonstrated at Lawrence Livermore National Laboratory, while a private company (DeepMind) discovered the 3D shape of proteins.

Point is, let’s not get too ideological about the role of federal research labs and universities in supporting research. The OSTP report argues that industry consortia like EUV LLC should play a more central role in advancing basic research and the broader American innovation economy. For regions that spent much of the 2010s building coworking spaces and business incubators, the OSTP report might mark a moment where civic efforts are instead directed at building similar, mission-focused, time-bound consortia to solve national problems.

Facilitate Testing

In the 1950s, as Cold War tensions heated up, Area 51, a plot of land in Southern Nevada, served as a classified testing ground for programs like the U2 spy plane.

Around that time, entrepreneurs and hobbyists began testing rocket designs at a testing site in the Mojave Desert in California. The Mojave testing site has since expanded geometrically, and the OSTP report notes, “[m]ultiple rocket companies have emerged from this cluster of cheap leases, federal licenses, and shared test infrastructure to win NASA prizes, raise substantial venture capital, and reshape the commercial launch industry.”

Innovation needs a testing ground. “Test infrastructure, whether for rockets, advanced manufacturing, autonomous systems, or any frontier technology, is an enabling resource that determines whether the next great American company starts in a desert lot or dies on the vine in a student’s garage,” the OSTP report notes.

Dr. Jerry Hendrix, now the associate director of shipbuilding programs at the White House Office of Management and Budget, has championed the idea of an “Area 52” in his home state of Indiana along Lake Michigan for unmanned, autonomous naval systems.

Similarly, First Breakfast’s Shyam Sankar and Madeline Hart have highlighted a proposal for a network of technology proving grounds, hosted at unused federal lands and military installations. Perhaps someone in the Pentagon was reading. Earlier this month, the U.S. Army established new testing grounds for commercial technologies on federal lands in Utah, Michigan, and Mississippi.

Regional leaders should recognize technology testing as a critical element of the value-creation process and assess where technologies can be tested in their back yards.

Build Production Near Science

The next step after the scientific breakthrough is ensuring it translates to production and the broader economy.

The consortium I discussed earlier provides a cautionary tale: EUV LLC served to design cutting-edge lithography equipment that used waves of light to engrave transistors onto wafers. That breakthrough was commercialized not by an American sponsor but by ASML, a Dutch company that maintains a supply-chain chokehold on the world’s most advanced lithography equipment to this day. ASML was permitted to purchase EUV LLC’s IP rights in exchange for promises to source components from the United States—promises that were not kept or enforced.

EUV LLC is thus yet another story of American deindustrialization, where we invent but do not build breakthrough technologies. It also illustrates the need to build supplier networks that put research and production in proximity.

To capture the economic benefits of science—which is necessary so long as American taxpayers fund American science—the OSTP report argues we need to follow breakthrough science with process knowledge retention. Think of programs to allow community college students to work alongside PhDs and receive industry credentials that they can take to manufacture technologies produced by American research. This would serve not just local workforce development, but the advancement of science, the OSTP argues.

“[A]cademic publications alone remain insufficient to transmit the craft of science…Our true competitive advantage lies in the process knowledge embodied by America’s talent. Without skilled practitioners who pass their craft to those who follow, the engine stalls…Without local manufacturing capacity, the marriage of science and craft weakens. Scientists lose access to the practical problems that inspire new lines of inquiry and improve research quality, while industry loses the research ecosystem that sustains technological leadership.”

One Final Note…

I don’t agree with every word in the OSTP’s report, yet it is a critical, potentially massive step torward mobilizing the American economy to meet peer threats.

The OSTP’s critics cannot simply respond to these proposals with grievance. If you object to the report, what’s your plan? The status quo of America’s innovation base is a world where the gap between China and the United States grows smaller while the gap between San Francisco and the non-superstar cities grows larger. The trendlines are not positive. So what’s your plan?

Director Kratsios and OSTP have offered theirs. It deserves our serious attention and hopefully will spark a substantive debate.

It’s no secret that America has a weapons production problem.

On August 5, Deputy Secretary of War Steve Feinberg lit a fire under industry to solve this problem. He sent a memo to industry leaders giving them 21 days to submit plans to “drive significantly faster, more aggressive delivery schedules and/or increased production for critical capabilities. . . .Years-long development cycles are not acceptable. We must dramatically accelerate our program schedules and expand our production capacity now.”

Here at First Breakfast, we put the question to some of our favorite doers in the industry: If you had free reign to fix America’s munitions bottleneck, what would you propose?

It’s been three weeks, and we’re sharing the best—and most creative—proposals we received.

Dear DepSecWar: may you find additional inspiration in these hot takes. 🫡

Open the Magazine: Compulsory Licensing for Mass Production

Shyam Sankar, Chief Technology Officer, Palantir Technologies

The problem is not that we lack designs. We have exquisite weapons that work. We lack the ability to build them at rate, because the technical data package is a monopoly asset and the monopolist’s incentive is margin per unit, not units per month.

Fix the incentive.

Mandate that every prime and every supplier license the complete Technical Data Package (TDP) for any weapon in production or sustainment whose R&D was all taxpayer funded: drawings, materials, process specs, source code, test procedures. The price: a royalty at last year’s realized cost-plus margin per unit produced. The prime keeps the economics. It loses the exclusivity it did not earn given taxpayer-funded development.

Any firm that puts a $100M balance sheet behind the work may take the license. Capitalization is the credibility test, not past performance narratives or a facility clearance dating to the Cold War.

The licensee’s job is to optimize the weapon for manufacturing. Substitute materials. Delete features. Loosen the tolerances physics does not require. Then test the variant to characterize what it actually does and publish those numbers as the new spec. A missile at 70 percent of the original range that can be built in a tenth of the time at a third of the cost is not a degraded weapon. It is a different weapon, and it is the one that wins.

Award on one metric: qualified units per month per dollar, delivered from a line that is instrumented, automated, and designed to surge. The time for artisanal cells and high-touch labor as a business model has passed.

Congress should treat the TDP the way it treats spectrum: a public asset licensed for public use, not a private toll booth on national survival.

We are one contingency away from learning our magazine depth the hard way. The designs already exist. Free them.

The Real Munitions Bottleneck Is Qualification, Not Capacity

Kevin Capozzoli, CEO, Critical Materials Group

America’s munitions shortfall is usually framed as a capacity problem. But much of the delay is administrative (Qualification and Permitting) rather than physical. The same explosive material is qualified from scratch program after program, and even proven material waits months for a Department of Transportation EX number classification to simply move the material. The EX-number is required the first time a material is manufactured, but if the production method changes, another EX number is required.

Federal IT once faced the same problem. The FedRAMP 20x reform replaced from-scratch review with control inheritance, raising cloud authorizations from under 50 per year to more than 100 in six months.

Energetics can adopt the same model: qualify a material once, authorize a formulation once, and let end articles inherit their constituent authorization, assessing only the integration delta. Fold EX-number classification into that package, fast-track process improvements without full recertification, and create a second-source equivalence pathway that certifies conformance to an approved reference rather than re-qualifying from zero.

Stop Lighting Money on Fire

Mike Gallagher, Head of Defense, Palantir Technologies

The Pentagon is rightly rushing to spend every single one of its Congressionally appropriated dollars before the end of the fiscal year. If it succeeds, it will avoid a self-inflicted problem that has had a disastrous impact on our deterrent posture.

In the last decade, the Pentagon has lost more than $125 billion because of an outdated budgeting process that requires any unspent, Congressionally appropriated dollars to be returned to the Treasury. In other words, billions of budgeted dollars have been allowed to simply vanish instead of being used to replenish munitions stockpiles, procure new technology, or invest into our defense industrial base.

The FIRES Act I introduced as a member of Congress fixes that.

Rather than let this appropriated but unspent money disappear, the FIRES Act puts these dollars into a special fund that the Secretary of War could use to fund Congressionally mandated priorities. This could go a long way toward supporting priorities that may prove decisive in a Pacific conflict. The first of these: Deputy Secretary Feinberg’s efforts to ramp munitions production via multi-year purchases. The second: scaling the manufacturing and deployment of autonomous capabilities that can turn China’s coastal waters into a hellscape. The third: funding advanced energetics such as CL-20 in existing systems to extend both their range and destructive power.

The Pentagon has rightly identified munitions production and autonomy as key to preventing or winning war in the Pacific. But funding it sufficiently and in time remains a challenge. The FIRES Act gives the Secretary of War the flexibility and authority needed to fund enduring priorities at the speed of relevance, making us safer without budgeting another dime of taxpayer dollars.

Let ‘Em Build

Will Thibeau, Founder, Escoreal Solutions

Aggressive, stimulating industrial policy is necessary to harness the capacity of small and medium sized machine shops so they can build enough components for large-scale munition production. These shops run manual sales and operations processes disconnected from Prime customers. The Pentagon should extend an existing software platform to any component supplier with even the smallest production record for free.

The government must also radically accelerate the process by which suppliers become qualified to build and sell solid rocket motors, the critical bottleneck of the munitions industrial base. Long, cumbersome processes exist for validating safety and earning the right to sell explosives. The ATF and DOW should near-recklessly streamline a vendor’s ability to earn any of the multiple licenses (FFL, AS9100, etc.) required for participation in this market.

Relatedly, the government should move to a generic supplier qualification threshold. Instead of mandating suppliers validate components for each munition, there should only be a single regulatory gate for entry into the market. Allow program offices to ensure proper integration at the end-item level.

We do not lack machines, machinists, or money, but instead lack the will to let them build, and that is the one shortage no appropriation can fix.

It’s Not Easy, But It’s Not Rocket Science

Nadia Schadlow, Senior Fellow, Hudson Institute

In the category of “kind of simple” (recognizing that simple and the Pentagon are something of an oxymoron), there are some basic steps that could help avoid repeating past mistakes. Start by taking stock of recent efforts to support new entrants and expand capacity in the energetics space: What was funded? What actually got built? What new capacity came online? What worked, what didn’t, and why? This is not a “gotcha” exercise. It is a way to learn from recent investments and inform the next round.

For example, in 2024 the Department of Defense awarded $192.5 million to seven companies under the Defense Production Act to expand domestic production of 22 chemicals used in defense systems, including critical energetic precursors and other materials such as oxidizers and magnesium. What resulted? Which projects delivered the capacity they promised? Which did not? And why?

We Need a Materials Manhattan Project

Jake Chapman, Managing Director, Marque Ventures

America’s munitions shortage is real, but we’re in danger of solving the wrong problem.

Expanding production capacity, signing multi-year procurement contracts, licensing production to allies, and accelerating acquisition are all necessary if conflict comes tomorrow, but these are surge measures, not long-term national security investment strategy. They help us build more of today’s weapons tomorrow instead of fundamentally better and cheaper ones.

The defense-tech ecosystem has demonstrated that Group 1-3 drones and low-cost cruise missiles can be fielded faster and at lower cost than traditional programs. That is an important step forward. But even these companies remain constrained by the same physics and many of the same supply chains. Whether a missile is built by Lockheed Martin, a neo-prime, or a startup, it still depends on the performance of its rocket motor, energetics, turbine materials, structural composites, semiconductors, and manufacturing inputs. Better business models alone cannot overcome physical limits.

TLAMs are expensive partially because of who builds them and how they’re built but also partially because they deliver singular range, precision, and punch. If America wants to solve its munitions crisis without sacrificing capability, we must invest in changing the physical constraints our engineers design around.

Imagine rocket motors with significantly greater energy density, airframes built from lighter and stronger materials, turbine blades capable of operating at higher temperatures, manufacturing processes that eliminate complex machining, and energetics that deliver more kill per kilogram. Every improvement in these dimensions compounds offering greater range, larger payloads, lower cost, reduced logistics, and faster production. Rather than accepting today’s tradeoffs, we should be working to eliminate them.

The Department of War should launch a modern “Materials Manhattan Project” focused on advanced energetics, propulsion, structural materials, manufacturing processes, and metallurgy for munitions. America should not aspire to build more 1980s missiles with 2020s factories. We must invent the 2045 missile; one that flies farther, hits harder, costs less, and can be produced in overwhelming numbers.

Outlaw the Obvious

Rosie the Riveter

Bad incentives by the monopsony have produced bad business practices at the defense primes. Here are five proposals that should already be law:

• Every prime should be working five days a week (nope, not the case today) and should be limited to one offsite a year. The carpet people work four days a week and go to leadership offsites every month, while the steel-toe rank and file work to build more weapons on the factory floor.

• Primes shouldn’t be allowed to design fancy custom tape if duct tape will do the job, but today they get away with doing just that. FASA—the 1994 law requiring the government to prefer commercial technology—extends to prime contractors choosing whether to buy or build capabilities for a given government contract, even after contract award. But there is neither an enforcement mechanism nor an incentive with cost plus contracting to follow the law. What we get instead is primes expending enormous resources—much of it taxpayer money—rebuilding commercial capabilities that already exist. It’s time to end the self-dealing that rewards primes for prioritizing internal development at the expense of literally everything else.

• Force primes to cut their consulting budget by 90 percent and invest the money into training programs for technicians and manufacturing engineers. Why are you asking the DoW for $20 million for McKinsey when you won’t spend that amount of money on improving your operations on the floor? If you won’t invest in your business operations, you should at least invest in the country’s future workforce. No more carpet people!

• For every one month late a prime is on a program delivery, the DoW should get five percent ownership of that program’s intellectual property. You shouldn’t own both the critical IP and also refuse to get it made. Delay long enough, and the government gets an ownership stake it can license to whoever has a better production plan.

• Require remedial tech training for the legal counsel of every prime so they can understand what “the cloud” is and why it’s OK to use it.

Form the Army Munitions Production Corps

The Angry Hobbit

The blueprint to fix the munitions production crisis exists, and we have done it before. In WWII we leveraged the Army Corps of Engineers to build multiple munitions plants. Many of those plants are still operational and operate under the government owned, contractor operated model.

We should use the corps of engineers to build out new weapons plants for guided munitions, interceptors, and missiles instead of awarding more money to primes that know how to play the game for more money.

We should then form the Army Munitions Production Corps to surge production and staff these plants to make up for the gap in contractors operating these plants. The production corps should be either a new MOS within the Army, or an adjacent formation that can take volunteers or individuals that wish to serve but cannot pass military physical requirements and train them to be critical factory workers that can be assigned to production facilities at the needs of the government.

Running these plants as primarily government owned and government operated is expensive, but does not have to be permanent. After the initial surge of soldiers/production corps personnel, their income and taxes will boost the local economy at these rural factory locations and enable these towns to support future contractor/DA Civilian jobs and recruiting.

In peace time, these programs can be used to train reservists and guardsmen with the skills to operate factory machinery and assembly lines to boost civilian industry with skilled labor and allow for mobilization to surge production at these munitions plants in times of need.

Earning by Doing

Chase Dalton, Federal Deployment Lead, Cognition

Congress should pass a War Prize Act, creating a system of commissioned military enterprises to enable a capitalist market for wartime military effects. This would parallel traditional procurement channels. During authorized conflicts, the government would maintain continuously updated price schedules for military effects: enemy soldiers killed, aircraft destroyed, ships sunk, infrastructure disabled, equipment captured, or other strategically valuable outcomes.

This proposal carries obvious second-order risks, but the hour is late and worth the gamble. As the monopsonist, the Pentagon decides what to buy, how, and from whom, then bears the development and execution risk. This has not produced the munitions we need to defeat China or Iran.

Before war, the DoW should publish non-binding indicative schedules so investors know which outcomes will command premiums. Imagine a billion dollar prize for destroying the Fujian, China’s newest carrier, within 48 hours of hostilities over Taiwan. Private capital would finance competing solutions. China would have to worry about the known U.S. order of battle and privately financed capabilities. Lower-intensity conflicts could serve as proving grounds, refining capabilities, incentives, and capital structures before a peer war.

The government would dynamically set the commission envelope of authorized and prohibited targets, preclearance strike rules, geographic limits, legal constraints, and prize values. Commissioned firms would control the financing, development, production, inventory, force structure, operational planning, and execution within that envelope.

Prize claims should be transferable and financeable. Firms could raise equity, borrow against expected payouts, form prize funds and consortia, syndicate risk, insure campaigns, and build portfolios across military objectives.

Accountability must be severe. Commissioned firms would post insurable bonds, maintain auditable records, and face prize forfeiture, commission revocation, civil liability, and criminal prosecution for violations.

Forge the (Allied) Arsenal of Democracy

Daryl Wieland, Senior Director of Partnerships, Palantir

The United States and her closest allies should create a single, treaty-backed industrial utility called the Allied Arsenal Corporation that collaborates on defense industrial production.

While that may be provocative and require a lot of trust, the question we need to ask ourselves is can the United States and its allies create a system where innovation is rewarded, production is fungible, capacity is visible, and no single owner, factory, country, or appropriation cycle becomes the limiting factor.

That system would be a licensed, modular built-to-print production network. Original design owners would retain economic upside through transparent IP licenses, per-unit royalties, and payments for engineering support and continuous improvement.

Such an arrangement wouldn’t be entirely unprecedented. Just this week, the UK announced it will share blueprints of its Storm Shadow cruise missiles with Ukraine. In July, France similarly provided the Ukrainians with production rights for the Scalp missile. America may not be too far behind. President Trump initially announced the United States would grant the Ukrainians license to produce the Patriot missile, although he has since walked back the commitment. Trump’s stated reason was “it’s a hard thing to give away, that kind of technology.”

But that’s where the Allied Arsenal could be most effective. It would standardize the process for sharing technology via approved manufacturers, secure data standards, and clear agreements about access. Specialization would turn national strengths into allied capacity, much as markets coordinate dispersed knowledge and incentives.

The result would be more than a larger arsenal. It would be an adaptive industrial base: competitive enough to reward invention, coordinated enough to survive crisis, and distributed enough that no bottleneck can decide the future of security.

RYAN MUSTO is a venture capitalist leading investments in deep tech and defense tech with a focus on maritime systems, critical materials, and advanced manufacturing.

Every generation or so, a new theater of geopolitical competition takes shape before most people realize it’s a theater at all. The Arctic. Cyberspace. Low Earth orbit. Each time, a window opens, early movers stake their claims, and latecomers spend decades trying to claw back ground that could have been secured upfront for a fraction of the cost and effort.

The deep Pacific seafloor is the latest iteration of this story. And America is already behind. There is a telling asymmetry in how Washington thinks about the deep Pacific. The United States Navy has spent decades and hundreds of billions of dollars perfecting its ability to operate beneath those waters—tracking submarines, projecting deterrence, and mapping choke points. Washington has spent far less energy thinking about the resources that are sitting on the floor.

While Washington debates tariff regimes and domestic stockpiling strategies for land-based critical minerals, China has spent the better part of a decade quietly securing the most mineral-rich real estate on Earth. The window for the United States to compete is closing faster than anyone in the reindustrialization debate seems to realize.

The Treasure Map

Scattered across the Clarion-Clipperton Zone (CCZ)—a stretch of deep Pacific seafloor roughly half the size of the continental United States—lie trillions of polymetallic nodules packed with cobalt, nickel, manganese, and rare earths. By most serious estimates, this single geological formation contains more cobalt, nickel, and manganese than all known land-based reserves combined. These materials are needed to build electric vehicle batteries, advanced semiconductors, military hardware, and the full stack of next-generation American industrial technology. As American policymakers debate how to secure access to these resources from sources on land, vast troves are sitting on the ocean floor, largely untouched.

China is moving to exploit these resources. While the United States cycled through regulatory debates and permitting battles that kept American companies on the sideline, China’s state-owned enterprises accumulated five of the International Seabed Authority’s (ISA) roughly thirty exploration licenses—more than any other nation. American companies hold none—the United States never ratified the United Nations Convention on the Law of the Sea (UNCLOS), the treaty that governs ISA membership, effectively barring them from the process.

The ISA, the United Nations body with sole authority to grant exclusive rights to survey and eventually mine the international seabed, has been deadlocked for years finalizing the commercial mining code that regulates extraction. China’s strategy was to secure exploration licenses early, knowing they would confer priority extraction rights the moment the code was eventually settled. The ISA does not move at venture speed; China’s state capital does.

China didn’t stumble into this. It was the result of a deliberate, state-directed, decade-long strategy to corner the most important mineralogical frontier of the twenty-first century before the rest of the world fully understood what they were doing.

The United States is behind the curve in the deep Pacific, but that wasn’t always the case. In the 1970s, U.S. intelligence and naval programs secretly surveyed vast stretches of the deep Pacific seabed. The primary mission was building a classified hydrophone network to track Soviet submarines moving through Pacific choke points. But those same surveys mapped the seabed’s mineral wealth in remarkable detail. In one of history’s better ironies, the Central Intelligence Agency’s 1974 Project Azorian, which partially recovered a sunken Soviet submarine from the Pacific floor, used commercial manganese nodule mining as its cover story. The U.S. government quite literally invented the fiction of deep-sea mining to hide an intelligence operation.

The strategic intelligence gathered was extraordinary; however, the government quietly allowed it to atrophy in the decades that followed. As the Cold War wound down, the sense of urgency faded, and the institutional knowledge that America had painstakingly built simply was not maintained. It is one of the more underappreciated strategic own-goals of the late twentieth century.

The counterfactual isn’t hard to imagine: American companies were already surveying the CCZ, and Congress passed the Deep Seabed Hard Mineral Resources Act (DSHMRA) in 1980. The window was open, yet we walked away from it.

China is running the equivalent program today, openly, at scale, and supported by state-backed capital that no American startup can match. The China Ocean Mineral Resource Research and Development Association (COMRA) isn’t a scholarly curiosity shop, as its name might suggest; it’s a flag-planting operation dressed in academic clothing. Founded in 1990 with an explicit state mandate to acquire deep-sea mineral rights, COMRA registered as a pioneer investor with the precursor to the ISA in 1991 and secured its first CCZ exploration contract by 2001. Since then, it has built a dedicated fleet of research vessels and deep-sea submersibles, including its Jiaolong, which dove to 7,000 meters in the Mariana Trench in 2012. China’s 14th Five-Year Plan allocated roughly $2.4 billion to COMRA and associated deep-sea programs. In November 2024, Xi Jinping personally announced the successful sea trial of China’s first domestically produced deep-ocean drilling vessel. By 2025, Chinese state-owned corporations were conducting active commercial mining trials, with the Kaituo 2 crawler successfully harvesting nodules at depths exceeding 4,000 meters. China’s efforts have moved beyond research to a full industrial buildout. And unlike our 1970s mapping operations, it is unlikely to be quietly shelved when the political winds shift.

America missed its opportunity to take the lead in the undersea domain. That is the uncomfortable truth. But discomfort, at least, is actionable. Denial isn’t.

We can’t afford to be wrong again. This time, the tools exist to mine the seabed. The commercial and technological moment to capitalize on the subsea has materialized. The Cold War-era seabed intelligence never had a ready industrial base to capitalize on it. Today’s deep-sea mining does.

The Jurisdictional Opportunity

The opportunity here is enormous. CCZ nodules would give the United States a domestic (or at minimum friendly-waters) alternative for three minerals it currently imports almost entirely at China’s discretion: cobalt (73 percent of global demand now goes to batteries, with aerospace and defense superalloys accounting for most of what remains), nickel (essential to next-generation battery chemistries), and manganese (critical to both steel production and battery cathodes). Reducing dependence on Chinese-controlled supply chains for these inputs directly reduces the leverage Beijing holds over American defense production, EV manufacturing, and the broader reindustrialization movement.

Unlike rare-earth mining on land—which is politically toxic, environmentally contested, and takes years to permit under the best of circumstances—deep-sea mining in international waters sits in a jurisdictional gray zone. A determined administration could move the ball quickly and get projects permitted and capitalized faster than in almost any other critical minerals context. The April 2025 executive order directing the National Oceanic and Atmospheric Administration (NOAA) to accelerate deep-sea mining licensing under existing authority is proof of concept: more than ten applications arrived almost immediately. In terms of law and regulation, we could move fast here—at least by typical Washington standards.

The technology required to do this is being built right now. A handful of American startups are genuinely close to changing the minerals map by developing Remotely Operated Vehicle (ROV) systems, nodule collection platforms, processing vessels, and subsea robotics. Not in a “five years away, trust us” kind of way. In a “one committed investor cohort away from demonstrating proof of concept at commercial scale” kind of way.

American industry is at the deployment capital stage—the exact moment where focused private capital has historically created the durable national advantages that government programs alone could never build. Think of it as the maritime analog to what happened in commercial space: SpaceX didn’t invent rocketry. It took existing technology, added focused capital and urgency, and transformed what was once a government monopoly into a globally competitive American industry. The deep-sea mining ecosystem is asking for the same treatment. SpaceX is now responsible for more than 80 percent of all mass launched to orbit globally. Launch costs have fallen from roughly $65,000 per kilogram to under $1,500 (a 95 percent reduction). This is a price collapse that went beyond disrupting the existing launch market by creating entirely new ones: Starlink now has 5.4 million subscribers and generated $6.2 billion in satellite broadband revenue in 2024 alone, a market that barely existed before SpaceX made it economically viable.

The same dynamic is available in deep-sea mining: a technology-driven cost collapse that unlocks an entirely new critical minerals supply chain, with follow-on effects for EV manufacturing, defense procurement, and every downstream industry that currently sits at the mercy of Chinese mineral pricing.

The first-order problem is capital, but the second-order problem is political will. American deep-sea mining startups have been unable to raise the rounds they need in part because investors rightly perceive a policy environment that is uncertain at best and hostile at worst. The ISA’s multilateral framework, designed in a more cooperative era, was never built to move at venture speed. It moves on diplomat time.

The solution isn’t to abandon multilateralism wholesale. The machinery already exists. The DSHMRA gives NOAA the authority to issue exploration licenses and commercial recovery permits for deep-sea mining in international waters, and the April 2025 executive order has already activated it. What the administration needs isn’t new law—it’s the political will to see the process through. The DSHMRA represents a unilateral U.S. track, operating outside the ISA framework precisely because Washington never ratified UNCLOS. The current administration has chosen to proceed on that basis.

The intersection of defense relevance (dual-use seabed sensing, mapping, and ROV technology), strategic minerals independence, and a sector where private capital has already laid the groundwork is precisely the kind of inflection point the United States has historically been best positioned to exploit. Will we seize the opportunity?

The Bottom Line

The seabed doesn’t make headlines the way Taiwan does. It doesn’t generate the visceral policy urgency of a tariff war or a chip export ban. But mineral control is the upstream variable that determines the outcome of many important downstream fights. Whoever controls the inputs controls the supply chains. Whoever controls the supply chains controls the industrial base. And whoever controls the industrial base wins the long-run strategic competition.

China understood this years ago. The trillions of nodules sitting in the deep Pacific won’t wait for Washington to catch up—they will belong to the power that gets there first.

JOHN A. BURTKA is Director of Advancement and Outreach at the Coalition for a Prosperous America. He spent his career in manufacturing, automotive supply chains, industrial operations, and business turnarounds. He is a Lean Six Sigma Black Belt.

In this year’s military campaign against Iran, American forces proved they could strike almost anywhere with precision on short notice. Then the magazines ran low.

In the first month alone, U.S. forces expended more than 850 Tomahawk cruise missiles. By the time a ceasefire was reached, the total exceeded 1,000. America builds fewer than 200 Tomahawks a year. According to CSIS, Tomahawk stocks may not return to prewar levels until late 2030, while THAAD and Patriot inventories could take three or more years to rebuild.

Iran is not a peer. Against a true adversary like China, the gap between our ability to fire missiles and replace them will be the difference between deterrence and defeat. Adversaries count magazines and the ability to refill them, not just launchers. Industrial deterrence is the credible ability to keep producing after the first magazines are emptied. Rivals weigh that capacity before deciding whether a war is worth starting.

If war comes, winning turns not only on courage in the field but on factories, suppliers, machine tools, rocket motors, skilled workers, and our sovereign control of them before the shooting starts.

What Sovereignty Requires

We usually discuss sovereignty in the language of law and diplomacy: borders, treaties, and the freedom to set policy without another country’s permission.

Sovereignty also has a physical form. It is the capacity to act independently in the material world, to produce on one’s own soil the things that survival and freedom require: shipyards, smelters, refineries, pharmaceutical plants, munitions lines, power grids, and the skilled workforce that runs them. These are the material basis of independence.

A free people that cannot supply its own defense, energy, and medicine has handed part of its sovereignty to whoever can. A government can pass laws and project confidence, but without the ability to produce transformers, forgings, or artillery shells its authority is contingent. Political independence requires industrial capacity behind it, and that capacity has been eroding for half a century.

The Strategic Consequences of Efficiency

For two generations, America treated production as a private matter and consumption as the national interest. Make goods wherever they are cheapest. Hold minimal inventory. Offshore work when the numbers favor it. Treat production location as a cost question rather than a strategic question.

But these choices were themselves a strategy. They produced real abundance in ordinary times. Now they are being tested in extraordinary times. Efficiency optimizes for the average day. It strips out the slack and spare capacity a nation needs when conditions turn against it. A supply chain built for the lowest cost is, by design, a supply chain with no margin for crisis.

A nation can become richer on paper while becoming thinner in the things that make power real.

The original Arsenal of Democracy rested on a broad civilian manufacturing base already equipped with the skill, machinery, and workforce to convert to military production. Automakers built tanks because they already built engines and precision assemblies at scale. Machine shops, foundries, steel mills, and shipyards formed an ecosystem that could be redirected. And there was a dense network of suppliers, engineers, and production workers who made mobilization possible.

Over the last few decades, as America lost factories, we also lost conversion capacity. We grew comfortable as consumers and forgot that national power depends on makers.

The upstream base tells the same story. In 2025, the United States produced only 660,000 tons of primary aluminum against 5.7 million tons of apparent consumption, roughly 60 percent net import reliance, according to the U.S. Geological Survey. Copper is little better. USGS figures show 1 million tons of recoverable mine production, 790,000 tons of primary refined production, 1.7 million tons of refined imports, 57 percent net import reliance, and only two primary smelters.

These are just two examples, but I choose them for a reason. Metals are not luxuries. Aluminum and copper are in aircraft, vehicles, the power grid, motors, ships, and ammunition. Without them you cannot rebuild an arsenal. There are thousands of similar examples across the industrial base, each a real vulnerability. Trusted allies can help fill gaps, but allied final assembly that depends on Chinese upstream inputs is not allied capacity. It is Chinese capacity with better branding.

Capacity Must Exist Before Crisis

Walk the floor of a precision munitions plant and you stop thinking of a weapon as a single object. A guided missile is the visible end of a long chain: solid rocket motors, cast and forged parts, seeker electronics, rare-earth magnets, energetics, specialized fasteners, and the technicians who qualified the suppliers years earlier.

Remove any link and the weapon does not get built, or gets built too slowly to matter. The real constraint isn’t money. That would make this problem far easier. It is industrial capacity, including the permitting, capital, machines with long lead times, qualified suppliers, and trained workers. All of that takes years.

While the system optimized for cost, the base shrank. Manufacturing value-added fell from more than 21 percent of GDP in the late 1970s to 9.4 percent in late 2025, according to Bureau of Economic Analysis data. A country does not shed that much industrial mass without losing the suppliers, trades, and institutional knowledge that came with it.

Our nation has woken up to the fact that we cannot wait for war, blockade, pandemic, or energy shock and then decide to build what we need. The foundation of any serious industrial strategy is a set of principles applied with discipline before the crisis.

It begins with stable demand signals. Manufacturers invest when they see durable orders ahead instead of one-year appropriations that vanish with the next budget fight. Procurement must reward surge capacity and keep multiple capable suppliers alive, not just chase the lowest bid.

Critical inputs with no easy substitute need real domestic depth. Abundant affordable energy, faster permitting, patient capital, and a workforce strategy that treats skilled trades as a national asset are non-negotiable. Trusted allies can help where necessary, but irreplaceable capabilities must exist at home. Every serious industrial power understands that some capabilities are too important to leave to chance.

That does not mean America has to make everything. It does mean we have to decide what we cannot afford to lose.

Some capabilities are clearly essential. If losing one supplier can shut down a weapons line, the power grid, a hospital, or a large part of the economy, that capability is strategic. If it takes years to rebuild, depends on skills that are disappearing, or comes mostly from a country that may not supply us in a crisis, we need enough of it here to keep operating and to expand when necessary. That includes energy and grid equipment, primary metals and critical minerals, machine tools, castings and forgings, semiconductors, medicines and their active ingredients, shipbuilding and repair, munitions, rocket motors, and energetics.

Not every product has to be treated as a strategic capability. Goods with many dependable suppliers, ready substitutes, short lead times, and no serious effect on defense, health, energy, or the productive base can remain part of ordinary trade. Some products can come from trusted allies, especially while we rebuild capacity here. But we have to know where the critical inputs, equipment, and technology actually come from. Moving the last step of production to an allied country does not solve the problem if the supply chain still runs through China.

The middle class belongs in this calculation too. Factories do not run themselves. Skilled trades are built over generations through families, apprenticeships, technical schools, and companies willing to train people. When those jobs disappear, we do not just lose output. We lose the machinists, welders, electricians, toolmakers, engineers, and supervisors who know how to make difficult things at scale—and with them, the ability to expand production when the magazines run dry.

We also weaken the middle class that supports the economy and gives the country political stability. People who can support a family, buy a home, start a business, and believe their children have a future have a stake in the system. A country with great wealth at the top and permanent insecurity underneath will not remain economically strong or politically stable for long.

Rebuilding industrial sovereignty will require hard choices. We will have to decide what must be made here, what can safely come from trusted allies, and what can remain part of ordinary trade. Avoiding those choices is also a choice, and it is how we arrived here.

250 Years of Lessons

Two and a half centuries after independence, America needs to rebuild its industrial base, for reasons of necessity, not nostalgia. The men who declared independence understood that political freedom cannot be separated from the material capacity to sustain it. Independence was never only a matter of law and declaration. It had a physical form.

The case today rests on the same truth: industrial capacity is the material foundation of national independence, deterrence, and self-government. Free nations must act when conditions are hard, not only when they are easy, and that ability is physical before it is anything else.

America’s strikes against Iran showed a force capable of action. The years needed to refill the magazines showed the weakness behind it. The Arsenal of Democracy worked because civilian industry doubled as latent military capacity. That capacity must be built and maintained beforehand. A country that cannot produce enough aluminum, copper, machine tools, medicines, transformers, ships, and weapons is not fully sovereign in the real world. Neither is a country that allows the skilled middle class capable of producing and sustaining those things to disappear.

NADIA SCHADLOW is a Senior Fellow at the Hudson Institute.

MISLAV TOLUSIC is a Managing Partner at Marlinspike, a defense-oriented venture capital firm.

Congress is debating anew whether to add billions of dollars to next year’s defense budget. But just as important as how much to spend is what those additional dollars should buy.

For decades, the answer was ships, aircraft, tanks, and other platforms. The Pentagon has long measured success largely by developing and buying sophisticated weapons and platforms like F-35s, nuclear submarines, and aircraft carriers. But an F-35 that does not have a steady supply of munitions is hardly a capability. A submarine awaiting critical spare parts cannot go out to sea and deter. A Patriot battery without interceptor missiles cannot defend a city or an airbase.

What matters is not simply the advanced platforms, but fielding capabilities that can be sustained, replenished, and adapted in combat. The ability to surge, adapt, and manufacture at scale will increasingly determine military advantage. Achieving that capacity will require harnessing the private sector and commercial manufacturing facilities. We are in the midst of a fundamental realization: the factory is the product.

Consider Taiwan. Admiral Samuel Paparo has argued that in the event of a Chinese invasion of Taiwan, the United States intends to create a “hellscape” of thousands of autonomous systems to delay Chinese forces. It’s highly questionable, today, that we can deliver. Doing so requires an industrial base capable of producing enormous numbers of inexpensive systems—capabilities—at operational speed.

Recognizing this reality, Congress and the Pentagon are emphasizing the importance of delivering capabilities to meet these gaps. That’s a welcome shift that will reshape military planning and acquisitions and will impact the way that billions of defense dollars are likely to be spent. In his November 2025 acquisition reform announcement, Secretary of War Pete Hegseth called for incentives to stimulate private investment, expand production capacity, and create an industrial base capable of rapidly delivering new capabilities as operational requirements evolve.

This plan is consistent with the 2026 NDAA and current versions of the 2027 NDAA. Both have provisions related to increasing production capacity and supporting the ability to surge during conflict.

The FY2026 NDAA expanded the Defense Industrial Base Fund to support investments in machine tools, castings and forgings, production modernization, and related industrial infrastructure. It established the Civil Reserve Manufacturing Network (CRMN), which allows civilian firms to register their manufacturing capacity so that the Department of War (DoW) can inventory the country’s surge capacity. It also required the DoW to produce a report that identifies the obstacles to maintaining or investing in surge manufacturing capacity. This last measure is significant because it acknowledges that existing acquisition rules discourage firms from maintaining surge capacity. For example, the existing Federal Acquisition Regulation (FAR) treats the costs of maintaining surge capacity as an exception that requires special justification or a separate agreement—rather than as something valued as part of military capability.

Negotiations over the 2027 NDAA suggest the emphasis on industrial capacity will continue. The House Armed Services Committee report (H. Rept. 119-698) includes a discussion of “policy test labs” to evaluate proposals to incentivize investment in surge capabilities and capacities.

While certain authorities exist in Title III of the Defense Production Act and the Industrial Base Analysis and Sustainment (IBAS) program to invest directly in production capacity, tooling, and facilities, they essentially operate as exceptions or special programs as opposed to a normal logic of acquisition. These newer provisions reflect a growing recognition that the means of production, not just the weapons they produce, are themselves strategic assets.

The next step is to make that logic central to defense acquisition. If the factory is the product, the question is no longer simply what equipment the Pentagon should buy, but what manufacturing assets it should own or incentivize so that industry can produce capabilities at whatever scale future conflicts require. How should the Department attract private capital into reserve manufacturing capacity? How should it compensate companies for maintaining unused but strategically valuable production capacity?

One way to broaden this approach and to draw in needed private capital is through a Capacity-as-a-Service (CaaS) model. This would have a similar logic to Software as a Service (SaaS), which aims to deliver software capabilities at the speed of relevance. Because software changes so quickly, the SaaS approach recognizes that one-time software purchases do not work. By the time traditional processes produce a full replacement, the product is obsolete. A SaaS approach enables customers to receive a continuously improving capability.

A CaaS model would apply the same logic to manufacturing capacity. If the objective is to deliver continuously improving operational capabilities rather than a single platform, a CaaS model would reward industry for providing capability over time—not just a one-time production run of hardware. The goal is to treat industrial capacity as a service that can grow, adapt, and surge as operational requirements evolve.

An inventory management strategy could focus on increasing the availability of necessary equipment in theater and creating a strategic bridge until industrial production ramps up. Recent events have shown that the strategic bridge to industrial mobilization is not sufficient and would be challenged to support long term peer-on-peer conflict. Under CaaS, the DoW would pay contract manufacturers annual retainers to offer rapid production scaling—much like DoW pays commercial shippers to ensure adequate shipping capacity is available in case a contingency develops. Financing contract manufacturers should allow DoW to lower strategic inventory levels while introducing profit incentives to lower the cost of capacity scaling.

Such a shift has the benefit of attracting private capital. Many investors are reluctant to back companies whose primary customer is the Pentagon due to uncertain funding and arcane acquisition rules. But financing flexible manufacturing capacity presents a much broader investment opportunity. Facilities, tooling, and production systems can support both commercial and defense markets, reducing risk while creating stronger incentives for private investment. Rather than limiting competition to a small number of traditional defense contractors, this approach could unlock a much larger pool of manufacturers, investors, and new entrants into the defense industrial base.

It also changes the economics of defense production. Instead of financing short production runs, companies can invest in scalable manufacturing methods, advanced tooling, and automation that lower costs and increase production rates over time. Because the underlying manufacturing capability can be continually upgraded and reconfigured, the Department gains not just additional capacity but the ability to adapt rapidly as our adversaries’ systems change.

There are tradeoffs, of course. Optimizing for mass production rather than exquisite performance may require accepting designs that are “good enough” but can be produced in greater numbers and at lower cost. This approach will not apply to every capability. The United States will always need a force built around high-end platforms that deliver unique strategic effects.

But as Congress heads into recess asking what the next generation of defense spending should buy, the answer should not be just more platforms. Advantage will belong to the nation that can build factories as quickly as it builds weapons, continuously improve production, and translate commercial innovation into military capability. In this age of rapidly evolving warfare, factories are strategic assets.

KEVIN MCCARVILLE is a Forward Deployed Software Engineer at Palantir. He also serves as a Captain in the New Jersey National Guard, where he commands Charlie Troop, 102nd Cavalry, and is an Airborne Ranger. The views he expresses in this piece are his own.

My company was conducting reconnaissance fundamentals on a drill weekend in the field. As we reviewed concealed position setup and proper stalking techniques, one of my privates looked up at me with a question that was more profound than he knew: “Sir, what would we do if we’re lying here at night and a drone flies overhead with offensive capabilities? What if it picks up our heat signature?”

I answered him honestly: “In that scenario, you’re probably all going to die.”

His response was inevitable: “Then why are we doing this training?”

There was no easy answer to that question.

The future of warfare is no secret in the Pentagon. The widespread use of relatively inexpensive Iranian Shahed drones in Ukraine and the Middle East is headline news. Meanwhile, China and Russia are adeptly fielding various higher-end, more capable systems. The United States isn’t sitting on its hands. We have several counter-UAS systems from both the traditional prime contractors and new entrants. The capabilities are a mix of kinetic interceptors and directed energy weapons.

The problem is, Private Snuffy on the ground doesn’t even know these technologies exist, let alone how to use them or how they will be used to augment battlefield tactics.

The leadership at the top of our military understands that much of the doctrine we still teach at the bottom is obsolete. Yet battalion-level and below units continue running decades-old drills and consulting outdated field manuals, which lead to dissonant experiences like the one above. Doctrine takes far too long to travel from those who write it to the soldiers on the ground who must live and die by it. That lag will cost us dearly in dollars and in lives if we don’t reform and accelerate the way we train.

The Pentagon itself has acknowledged as much. Joint Interagency Task Force 401, the counter-drone task force established in 2025 to consolidate requirements, acquisition, and training under a single authority, opens its new handbook, Small Drones, Big Problems, with a telling admission: the hardest part of countering drones is not the technology, but having trained people and the right policies and processes in place. That message—and that training—has yet to reach the soldier at the bottom.

What We Are Facing

For much of 2024, I was deployed to the Kurdish territories spanning Syria and Iraq. There, the most consistent and lethal threat to my brigade came not from direct ground engagements but from drones. Iranian-backed separatist groups relied heavily on relatively primitive attack drones known as one-way unmanned aerial systems (OWUAS). We just called them “one ways”.

The primary variant at the time was the Iranian HESA Shahed-136. These delta-winged kamikaze drones are approximately 3.5 meters long with a 2.5-meter wingspan and weigh around 200 kg. Powered by a piston engine, they achieve speeds of about 185 km/h and can carry a 40–50 kg warhead. For reference, that is slow—newer jet-powered variants reach 500–600 km/h—and it makes them far easier to engage than other forms of indirect fire. The 40–50 kg payload is likewise middling: huge next to a 3 kg quadcopter, but a poor tradeoff for how clunky they maneuver.

Their range exceeds 2,000 km, making them ideal for standoff attacks with low radar signatures. They are preprogrammed with a grid and flight path, so there is no communication with the operator after they are launched—hence the term, “one way.” The downside to this technology is the drone will just fly into the side of a hill halfway to its destination if that’s what’s on the flight path. The upside is it’s cheap.

While the Shahed represents the lower end of the threat spectrum, Russia and China are fielding systems of an entirely different order. Russia’s Lancet-3 loitering munition has proven devastatingly effective in Ukraine, using optical and laser guidance to strike armored vehicles with a precision that earlier drone generations could not achieve. Then there’s the Orlan-10, which has been widely used for reconnaissance and artillery spotting, making it extremely difficult and often foolhardy to move forces undetected.

China’s threat is more concerning at the strategic level. The CH-4 and Wing Loong II are near-peers to American MQ-9 Reapers in capability. The larger, twin-engine Tengden TB-001 can carry up to 12 precision munitions with an endurance exceeding 35 hours—a heavier-lift class above the single-engine CH-4 and Wing Loong. More troubling is China’s investment in drone swarm technology, where hundreds of low-cost autonomous systems coordinate to overwhelm air defenses through sheer saturation. These are not primitive one-ways. They are precision instruments designed to defeat the exact layered defense systems we are currently building.

Current Capabilities

The systems we field today are competent but not comforting: good enough to defeat most of yesterday’s threats, but at costs and reaction times that will not survive tomorrow’s. Our primary counter-UAS systems overseas were the AN/TWQ-1 Avenger and Raytheon Coyote effectors. The Avenger is a mobile short-range air defense platform mounted on a Humvee chassis, giving it the mobility to reposition rapidly across a forward operating base. In practice, we rarely did this, as the lead time on drone detection to impact didn’t give us enough time to reposition effectively.

The Avenger integrates eight Stinger missiles enhanced with proximity fuzes specifically optimized for small UAVs, a .50 caliber M3P machine gun for close-in engagements (a lot less effective in the heat of the moment than one would expect, as accuracy is surprisingly poor and the .50 cal runs through a ton of ammo), Forward-Looking Infrared (FLIR) sensors, and a laser rangefinder. Its day-night capability and rapid engagement speed made it our first line of defense against incoming one-ways.

The Raytheon Coyote, part of the Army’s Low, Slow, Small Unmanned Aircraft Integrated Defeat System (LIDS), functions as a tube-launched expendable interceptor, essentially a drone built to kill drones. Block 2 variants use kinetic fragmentation warheads and engage threats at ranges of 10 to 15 km, typically paired with the KuRFS (Ku-band Radio Frequency System) radar for precision cueing. What made the Coyote particularly valuable was its ability to operate in a networked swarm, where multiple Coyotes can be directed at a single threat or dispersed against multiple targets simultaneously. For our purposes, multiple was never more than two. These systems proved effective in most engagements, but their expendable nature meant each engagement consumed a finite and costly asset. Further, reload and rearm times created windows of vulnerability that a determined adversary could exploit with mass attacks.

The most harrowing incident on our deployment occurred when a Shahed evaded interception and detonated just 45 meters from my bunker. The blast ignited key infrastructure, forcing a medical evacuation of several soldiers to a better-equipped base. Thankfully, all recovered and returned to duty, and every member of our unit made it home. But the event underscored a chilling reality: our defenses, while often successful, were far from infallible.

Evolving Countermeasures

Today, the U.S. military is investing in layered, multi-domain solutions to counter the growing drone threat. Kinetic interceptors remain the backbone of current counter-UAS efforts. The Coyote fleet is being expanded to thousands of units, and newer systems like AeroVironment’s Freedom Eagle-1 are being fielded to address longer-range threats that existing platforms cannot reliably engage. The Army is also exploring multi-missile salvos to handle saturation attacks, recognizing that a single interceptor per drone is not a sustainable model against swarm tactics.

Directed energy weapons represent the most promising long-term solution to the cost asymmetry problem. A Shahed-136 costs roughly $20,000 to produce; a Stinger missile costs over $38,000. High-power microwave systems and solid-state lasers can engage targets for a fraction of that cost per shot and do not require reloading in the traditional sense. The Army’s High Energy Laser Mobile Demonstrator (HEL MD) and related directed energy programs are advancing rapidly, though ruggedizing these systems for forward operating environments remains a significant engineering challenge and their effectiveness is often higher in theory than in practice.

Electronic warfare and AI-driven detection are becoming central to the counter-UAS kill chain. Rather than waiting to intercept a drone kinetically, new systems aim to detect, classify, and jam or spoof incoming threats before they reach their targets. AI is being integrated to reduce the sensor-to-shooter timeline, which in current systems can be dangerously long against fast-moving or maneuvering threats. Our enemies are quickly picking up on these tactics, though, and drone behavior in newer models is built to counteract these measures. For instance, some drones can convert from a one-way to a preplanned grid or just return home if its connection to its operator is severed by electronic warfare.

Non-kinetic defeat options, such as the Coyote Block 3, offer the ability to disable drones electromagnetically without physical destruction, preserving the ability to collect and exploit the wreckage for intelligence purposes. This is particularly valuable when dealing with adversaries who rapidly modify their systems in response to our countermeasures.

Another interesting new countermeasure is Merops, a low-cost fixed-wing interceptor refined through hard combat use in Ukraine before being adapted for our own fight (Merops is built by Perennial Autonomy, a company backed by former Google CEO Eric Schmidt). According to the Secretary of the Army, the service purchased roughly 13,000 Merops interceptors within about eight days of the opening of Operation Epic Fury, fielding them in the CENTCOM theater within two weeks of the first Iranian counter-strikes. At around $15,000 per drone against Shaheds costing two to three times that, solutions like Merops may finally have flipped the cost equation in the defender’s favor.

Solutions such as these indicate that, at the highest levels, at least, our military is absorbing hard-won lessons from Ukraine, where drones have transformed the battlefield into a transparent killing zone.

Lessons Learned

At the strategic level, I hold measured confidence that senior Army leadership recognizes the urgency of drone warfare. First-person view drones, loitering munitions, and fiber-optic guided systems have inflicted massive casualties, forced adaptations in concealment, movement, and combined arms tactics, and created a relentless cycle of innovation and counter-innovation. Electronic warfare (i.e. drone jamming) alone is insufficient; success demands integrated systems of sensors, effectors, deception, and rapid doctrinal evolution. Ukraine demonstrates that quantity, adaptability, and decentralized decision-making often matter as much as technological sophistication.

The Army is very much still figuring out how it fits into this dangerous new world. Tactics are being improvised across Ukraine and the Middle East in real time, and how our own technology will incorporate lessons learned remains undecided. We’ve made small adjustments—more dispersion on surveilled patrols, extra EW gear on reconnaissance—and we’re slowly realizing that the situations calling for Cavalry Scouts and recon platoons are dwindling. But we still refuse to say the hard part out loud: the doctrine we teach isn’t just obsolete. It’s actively getting in the way of winning the fight.

Recruitment priorities must evolve accordingly. We need greater emphasis on drone operator military occupational specialties (MOS), rather than traditional combat arms personnel. More critically, the enlisted ranks should aggressively target individuals with technical aptitudes: coders, engineers, tinkerers, and systems builders who can rapidly prototype, maintain, and innovate the tools our warfighters require. Most of the more technical MOSs and positions in the Army are obtained through credentials after enlisting and not at the point of entry. I think it’s time for a change so that we start the pipeline of tech-savvy junior enlisted soldiers at the top of the funnel. Anybody, inside or outside the military, looking at any of the conflicts recently, can plainly see that our next battles will be fought much more with keyboards than bayonets.

Boots on the Ground

Standing over that young private on the range, I cannot escape the truth in his question. In its current form, much of what we train feels not merely pointless, but actively detrimental. We instill false confidence in methods ill-suited to current conflicts we face. Our soldiers deserve better. They deserve a force-wide cultural shift, driven from the top but embraced at every level, that places technological fluency, rapid adaptation, and drone-integrated tactics at the center of our profession.

Wars will increasingly be won through superior technological investment, iterative learning, and the empowerment of technically skilled personnel. I read a while back that Navy and Air Force recruitment was having an interesting dilemma. They had no shortage of pilot applicants, they just knew they didn’t need them anymore. From fighter jets, to stealth bombers, to refuelers, the military across every branch is moving away from manned aircraft. I understand it’s not as sexy being the guy in Oklahoma with a controller and a screen as it is being Tom Cruise in Top Gun, but drones can be faster, more agile, and carry heavier payloads—all without risking human life. That’s where the military is heading.

Physical Training scores and marksmanship will still be hallmarks of a good soldier, but the tech-savvy 19-year-old will probably be contributing more to our military might in the long run than the PT stud. It is imperative we embrace that reality from the Pentagon all the way down to the private fresh out of basic. Or like many who have failed before us, we’ll keep fighting the last war.

DARYL WIELAND is Senior Director of Partnerships at Palantir and an Adjunct Professor of Finance at George Mason University.

The Proximity Fuze Moment

In the summer of 1942, the U.S. Navy had a problem it couldn’t shoot its way out of.

Japanese dive bombers were closing on U.S. ships at speeds that made conventional anti-aircraft gunnery ineffective. Hit rates were dismal.

Meanwhile, scientists at the Applied Physics Laboratory at Johns Hopkins were racing to field a technology that would change everything: the Variable Time (VT) proximity fuze. A tiny radar set crammed inside a shell casing, capable of detonating automatically when it sensed it was close enough to kill. It would raise the effectiveness of anti-aircraft fire by an order of magnitude.

But the proximity fuze wasn’t ready. Not in 1942. Not in useful quantities until late 1943. Not in mass production until 1944. Therefore, the Navy had to expand production of existing ammunition and fund the maturation of the proximity fuze at the same time.

The Bureau of Ordnance cranked the existing industrial base to maximum output while simultaneously pouring resources into maturing the fuze, scaling its production, and solving the manufacturing challenges that stood between prototype and deployment.

The proximity fuze didn’t save the fleet by itself. The decision to keep building while simultaneously investing in the future saved the fleet.

We are in our own version of a proximity fuze moment right now as the United States seeks cost-effective ways to counter the asymmetric threat posed by drones. Meeting the moment requires resupplying current capabilities while maturing next-gen technology.

Facing Reality

Surface-to-air missile interceptors are our proven and combat-tested tech. Workhorses like the PAC-3 and Standard Missile family underwrite deterrence today—but they are expensive and scarce.

Directed energy (DE) is our proximity fuze. High-energy lasers that can defeat cruise missile or drone salvos at a cost-per-shot measured in single digits have the potential to change the shape of naval warfare. Crucially, this technology could also free up precious space on ships currently devoted to defensive capabilities.

No one has made the case more forcefully than Chief of Naval Operations Adm. Daryl Caudle. In his May 14 posture statement to the House Armed Services Committee, Caudle laid down a marker: “The current paradigm, which forces a trade-off between defensive interceptors and offensive strike weapons within the limited space of the Vertical Launching System (VLS), is unsustainable.” Every VLS cell loaded with a defensive missile is a cell that can’t carry a Tomahawk or a long-range offensive strike weapon. The ultimate solution, Caudle believes, requires DE weapons because “…they offer a solution that increases the potential kill rate at a lower cost per engagement compared to traditional kinetic projectile munitions and missile interceptors, thereby increasing overall combat endurance.”

That is exactly the right diagnosis. But embedded in Caudle’s testimony is an uncomfortable truth that must be addressed: the laser fleet is not here yet, and the ships that can host it haven’t been built.

The Navy’s most modern surface combatants, the Flight III Arleigh Burke-class destroyers, simply cannot support the power demands of laser weapons at scale as their generators are already fully committed to the AN/SPY-6 radar. Caudle’s vision of a true laser-armed fleet is anchored in the Navy’s proposed nuclear-powered battleship and future surface combatants, platforms designed from the keel up with the power and cooling capacity for high-energy weapons. Battleship procurement isn’t planned until 2028, with delivery projected for the 2030s.

In this scenario, the worst thing we could do is the thing Washington is most naturally inclined to do: treat this as an either/or choice. Cut missile procurement to fund DE R&D or starve the DE portfolio because “lasers have been ten years away for thirty years.” Both instincts are wrong. Both get people killed. Rather, we need to fill the magazine and fund the beam.

Efficient Defense Enables Offense

If the proximity fuze analogy feels outdated, consider the data that just came back from the Middle East.

The Presidential Unit Citation that was recently awarded to the USS Gerald R. Ford Carrier Strike Group tells the story in cold numbers. Nine surface combatants fired 207 Tomahawk Land Attack Missiles at Iranian targets between late February and May. Assuming all were Arleigh Burke destroyers with 96 VLS cells apiece, that’s a potential combined ceiling of roughly 864 cells with those 207 Tomahawks representing roughly one offensive strike weapon for every four cells. The strike group spent the rest of its magazine “protecting vital sea lines of communication while under persistent threat from enemy missiles and one-way attack drones,” i.e. shooting down incoming fire.

This is Caudle’s unsustainable paradigm in action: the destroyers that prosecuted one of the most significant U.S. naval combat operations since World War II went into the fight with roughly three-quarters of their magazine committed to defense against an adversary not named China. When a single carrier strike group burns through 207 Tomahawks and even more interceptors in two months of regional operations against a middleweight power, the arithmetic for a Western Pacific contingency becomes terrifying to compute.

Crossing the Chasm

The traditional approach is not sufficient. We need a different tack. In Crossing the Chasm, author Geoffrey Moore describes the lethal gap between early adopters who embrace a disruptive technology on faith and the pragmatic majority who won’t touch it until it’s proven, integrated, and supported at scale. Most technologies die in that gap, not because the science is wrong, but because the institution loses patience, funding, or both while waiting for the customers to arrive.

DE is squarely in the chasm. The lab demos work, the generals nod approvingly at industry days. But the fleet commander and the brigade S3 will not plan around a weapon that can’t operate in rain, can’t sustain engagement tempo, and can’t be maintained by the maintenance crew at a forward operating base.

Caudle’s testimony reveals a Navy trying to manage the chasm rather than wish it away. His posture statement describes three DE tracks running in parallel. The first is near-term and modest: containerized, lower-power systems like the 30 kW LOCUST (which completed a successful live-fire test from the USS George H.W. Bush in October 2025) and the 60 kW HELIOS, deployable against the expanding drone threat. The second is transformational and distant: megawatt-class systems embedded in a nuclear-powered battleship a decade away.

The third attempts to thread the needle. The Joint Laser Weapon System (JLWS), a collaboration between the Army and Navy, is designed as a containerized system aiming for 150 kW with potential to scale to 300 kW, specifically for cruise missile defense. Combined R&D investment is mapped at $676 million through fiscal year 2031. The Pentagon’s FY2027 budget request contains $452 million in proposed R&D spending for DE weapons in support of Golden Dome alone, more than triple the $142 million enacted under the One Big Beautiful Bill Act. The exact relationship between this Golden Dome DE funding and the Army/Navy JLWS efforts remains unclear. If JLWS delivers, it represents a containerized laser powerful enough to engage the missile threats at the heart of Caudle’s VLS argument without a keel-up redesign.

The Pentagon wants to showcase battle-ready laser weapons by 2028, which creates a useful forcing function but also a credibility risk if engineering challenges (e.g., atmospheric effects, thermal management, forward maintainability) remain unsolved.

Caudle’s Containerized Capability Campaign (C³) is the institutional vehicle for this bridge by decoupling payloads from platforms so the Navy can deliver combat power, as he puts it, “at the speed of relevance, not the speed of platform-centric acquisition.”

The right instinct. But crossing the chasm requires the kind of sustained investment in manufacturing readiness, thermal engineering, and operational test that Washington historically is terrible at funding. The discipline required is to keep feeding the chasm-crossing effort while simultaneously building the conventional capability that keeps you alive during the crossing.

This Is Where BOND Matters

The Business Operators for National Defense (BOND) program, over a hundred elite private-sector executives embedded in the acquisition process, exists precisely for this kind of problem. The defense acquisition system was not built to run parallel investment strategies across different technology readiness levels. It was built to manage sequential programs on glacial timelines. Private-sector expertise is needed to thread the needle.

BOND operators understand portfolio management. Apple didn’t stop shipping iPhones while it developed Vision Pro. Ford didn’t shut down the F-150 line while it stood up the Lightning. The private sector manages this tension every quarter, and that muscle memory is exactly the institutional antibody the acquisition system needs.

Three priorities demand attention. First, demand signals for the missile industrial base. The solid rocket motor bottleneck is real. Multi-year contracts and second-source qualification efforts must signal to industry: we are buying at scale for the next decade. Private capital follows demand signals. The defense industrial base will invest in new production lines when they see contract commitments that justify the capex. Not before.

Second, software-enabled production visibility. Munitions Command Centers are the connective tissue between strategy and production. When a COCOM expends a salvo of Tomahawks, as nine destroyers just did, that expenditure cascades through the system: depleting theater magazines, drawing down global inventory, creating demand on a production line already at 80% capacity with a 24-month backlog. Today, no one sees that cascade in real time.

Third, a protected DE maturation pathway across all three tracks. The JLWS bridge deserves particular protection: its R&D pathway through FY2031 is exactly the kind of chasm-crossing investment that gets raided in POM fights. The CAPE and the Comptroller need budget structures that insulate DE maturation funding from the inevitable cycle where near-term readiness accounts cannibalize S&T. This is portfolio management: protecting the seed corn while harvesting the current crop.

The Lesson of 1942

The Navy solved the anti-aircraft problem in 1942 because it had the institutional discipline to pursue revolutionary technology without sacrificing the conventional capabilities it needed to survive long enough for that revolution to arrive.

Caudle’s testimony shows a CNO who understands both halves of this equation, who can articulate the transformational promise of DE while acknowledging that the fleet he commands today isn’t ready for it yet. The next step is institutional follow-through: build the missiles, fill the magazines, surge the industrial base. This must happen simultaneously, not sequentially, and not “after we solve the missile problem.” The DE capabilities we need to fight the drone and missile threat must mature across all three tracks with the patience and rigor the chasm demands.

1942 didn’t wait for the fuze. 2027 can’t wait for the beam.

SHANE ROCKETT is the Commercial Lead at Sable, a team of AI researchers and engineers dedicated to giving AI real-time computer use, vision, and voice capabilities. They are hiring world-class engineers. Inquiries can be sent to roles@withsable.com.

ABBY CARR works in Strategic Engagement at Palantir Technologies. She is a fellow at the Foundation for American Innovation.

On August 19, 1812, the frigate USS Constitution spotted HMS Guerrière southeast of Nova Scotia. Captain James Dacres of the Guerrière was eager to fight. The Royal Navy had not lost a single-ship frigate action to an equal opponent in over a decade, and Dacres had reportedly issued a challenge to any American frigate willing to accept. Constitution’s Captain Isaac Hull obliged.1

Captain Hull closed to within half a pistol shot before unleashing his first broadside. Within fifteen minutes, Guerrière’s mizzenmast was gone. Cannonballs struck Constitution’s hull and bounced off. A sailor watching them ricochet into the Atlantic reportedly shouted, “Huzzah, her sides are made of iron!”2

Guerrière eventually lost her mast and surrendered. The action lasted roughly thirty minutes, and it was the first of a streak. United States defeated Macedonian. Constitution came back and took Java. An infant navy, barely eighteen years old, was beating the greatest fleet in the world, ship for ship.3 George Canning told the House of Commons that the sacred spell of the Royal Navy’s invincibility had been broken.4

Why Dacres failed to account for his disadvantage is worth examining. Part of the answer lies in the fact that frigates of that day simply weren’t supposed to be as large or powerful as Constitution. She outmanned Guerrière’s crew 456 to 311, and her broadside outweighed her opponent’s by about fifty percent.5 Constitution and her sister ships broke the established model of a frigate. She was bigger, heavier, and hit harder. That advantage, however, raises a deeper question: how was it that only the new American frigates could carry so much armament?

Deep inside Constitution’s hull, six pairs of heavy timbers ran diagonally along the length of her sides. They never fired a shot, and no painting commemorates them, but these “diagonal riders” let Constitution and her sister ships carry an armament no other frigate could.

Diagonal riders appear across centuries and domains as a pattern: a constraint-breaking innovation that remains invisible during the deployment of a capability. Their impact, and the consequences of removing them, are understood only by the people who know they are there in the first place.

Below the Gun Deck

Joshua Humphreys, the man who built the original frigates of the U.S. Navy, has been covered by First Breakfast before.6 He had never seen a European ship of the line but he had worked on over 300 vessels since the age of twelve. His frigate designs were so novel that his guildsmen unanimously rejected them.7 What is less well known is the specific structural innovation that made his vision possible.

The infant U.S. Navy was not resourced to build a thousand ships; instead, Congress directed Humphreys to build a mere six frigates. Typical frigates of the era carried their guns on a single deck, favoring speed over firepower in a lean build. Humphreys’ plan was to break that mold; he would load his frigates with a much heavier armament than was the norm: bigger guns and more of them on a longer deck.

The physics were hostile to Humphreys’ concept. A hull long enough to carry that many guns bows under its own weight. The ends droop while the more buoyant middle rises, bending the keel, and destroying the ship in a process shipwrights call hogging. This was a well-documented failure mode that every shipwright in the Atlantic understood and accepted as a hard constraint on what a frigate could be.8

Other navies addressed hogging with short diagonal braces that functioned as local patches, but Humphreys took the idea further than anyone before him. His diagonal riders were thick planks of timber running in six pairs from the keel upward through the frame at steep angles, spanning much of the lower hull. The extended hull held under weights that should have broken it, allowing a significantly larger armament to fit aboard a frigate and fire upon Guerrière during her duel with Constitution.

Nobody on Guerrière’s deck thought, “We are being beaten by superior keel reinforcement.” Their attention, and most of the commentary since, has focused on Constitution’s armament. But it was the diagonal riders, unseen and uncredited, which made that armament possible.

The Lost Sixth Frigate

Not all six frigates got diagonal riders.

Humphreys’ British-trained assistant, Josiah Fox, had long disagreed with his boss’s approach. When Fox was given control of the sixth frigate, USS Chesapeake, he altered the design, scaling down the ship’s armament and changing the dimensions.9 Fox is known to have disagreed with Humphreys specifically on the diagonal riders, and historians conclude he almost certainly left them out.10 The logic of what follows is worth tracing carefully because it illustrates exactly how diagonal riders tend to disappear.

Without the diagonal riders, the Chesapeake’s hull could not carry the same armament as her sister ships, leaving her closer in firepower to a standard European frigate. While the other American frigates overpowered their opponents with a class of firepower never before seen on a frigate, Chesapeake fought on roughly equal terms.

Constitution could actively seek engagements because she outgunned any enemy frigate and could outsail anything that outgunned her. Chesapeake had no such margin, so every engagement she entered was a fair fight.

When HMS Shannon captured her off Boston in 1813—the only single-ship loss among the original six frigates—the engagement was decided in minutes by command and crew quality.11 Those variables only mattered because Chesapeake lacked the advantage that made her sister ships’ victories closer to foregone conclusions.

Humphreys drew his own conclusion. In 1827, when Fox was claiming credit for the frigate designs in newspaper interviews, Humphreys wrote of the Chesapeake: “She spoke his talents. Which I leave the Commanders of that ship to estimate by her qualifications.”12 Translation: if Fox wants credit, he can have the Chesapeake. The men who sailed her can judge whether that’s a credit worth claiming.

Humphreys himself framed it as a dispute over credit and craftsmanship, rather than internal bracing. The diagonal riders were invisible even in the argument between the two men who understood them best. Everyone saw an unlucky ship, yet no one asked what was missing from inside the hull.

In Search of Diagonal Riders

Diagonal riders did not disappear with the age of sail. Similar examples exist throughout history. The platforms and constraints change, but the pattern remains: hard limits overcome by hidden workarounds result in capabilities that tilt the balance in a conflict.

Leading up to the Battle of Britain, British Supermarine Spitfires were being outrun by German Messerschmitt Bf 109Es. The problem was “knock,” or the pre-detonation that occurred when the standard 87-octane fuel ignited in the engine. RAF pilots could only go so fast before their engines started to shake themselves apart.13

Three years earlier, Air Commodore Rod Banks had pushed for the adoption of 100-octane fuel, arguing that it could prove decisive in the early stages of a war. He was rejected because wartime supply could not be guaranteed from American refineries.14 But across the Atlantic, Jimmy Doolittle, the man later famous for his Tokyo raid, had convinced his colleagues at Shell Oil to invest in 100-octane refining at a scale no customer yet needed. Mocked as “Doolittle’s million-dollar blunder,” his bet helped make the fuel cheap and abundant by the time war broke out.15 Only months before the war, the first tanker of green-dyed British Air Ministry 100-octane (BAM 100) was shipped to England, where it was secretly stockpiled.

By the time the Battle of Britain began, the RAF had modified its fleet to handle the new fuel.16 Using BAM 100, the Spitfire gained a remarkable 25 mph at sea level and 34 mph at ten thousand feet.17 The Germans did not even realize the source of this change until they found fuel samples from a downed Spitfire in Belgium. Once they knew, they couldn’t exploit the knowledge; the Germans’ best fighter, the 109E, was not equipped to use this superior fuel.18 Due to its classification at the time, and the tendency to focus on platforms rather than supporting technologies, BAM 100 receives little attention in the popular version of the Battle of Britain.

Diagonal riders were present in the Cold War, as well. In the late 1950s, Kelly Johnson’s Skunk Works was designing an aircraft so fast that no interceptor or missile could touch it. At those speeds, a standard aluminum frame would heat up past the point of failure. Titanium, however, would not. Despite the abundance of titanium ore, aircraft-grade refined titanium was expensive and rare. It still is. The world’s largest exporter of refined titanium at the time? The Soviet Union.

Not ones to let the Cold War stymie a supply chain, the CIA set up shell companies and third-party intermediaries to purchase enough Soviet titanium to build the entire fleet of aircraft. The Soviets never learned who they were supplying.19 Sixty years later, the SR-71 Blackbird’s speed record still stands. The plane is iconic, but the titanium airframe that made it possible receives far less attention.

Diagonal riders continue to break constraints in modern platforms, as well. A fully loaded F-16 carries enough fuel for about 45 minutes of flight on combat ops. Adding external fuel tanks to the wings gains range, but only at the expense of payload and maneuverability. The constraint-breaker is a Boeing 707 with 200,000 pounds of jet fuel in its belly, known as a KC-135 Stratotanker. Since its first major usage in Vietnam, the Stratotanker has enabled every major American air campaign via mid-air refueling.

During Desert Storm, a typical strike package consisted of 75 aircraft.20 One in five was a flying gas station.21 In 43 days of Desert Storm, tanker crews made just under 46,000 refueling contacts, without missing a single rendezvous.22 These tankers are largely absent from the “video game war” version of Desert Storm that the public knows (laser-guided bombs threading ventilation shafts and night-vision footage on CNN). In Desert Storm, the F-16 was the weapon, but the tanker was the diagonal rider that let it reach its target.

In each of these examples, a constraint was accepted as given until someone broke it in almost total obscurity. The visible capability received all the attention while the constraint-breaker disappeared into the layers of the platform.

What a Diagonal Rider Is—And Isn’t

Not all foundational technologies are diagonal riders. Diagonal riders must be both constraint-breaking and invisible in the performance of a capability.

Aircraft carriers broke the constraint of dependence on land bases. But they are arguably the most visible symbols of American military power. Encryption and code-breaking technology might have started as a diagonal rider, but now Bletchley Park is a tourist destination and the subject of movies.

Other foundational technologies are invisible but optimize an existing capability, rather than truly breaking the constraints of a platform. Beginning in the 1760s, the Royal Navy clad warship bottoms with copper. “Coppered” ships maintained their speed over longer deployments and spent less time in dry dock, but copper was a performance improvement rather than a generational leap forward.23 A good test is “What would happen if this technology were removed?”

The defining threshold is the combination of necessity and invisibility. Necessary but visible technologies are known enablers. Invisible technologies that aren’t constraint-breaking are background details. A diagonal rider is both: required for the capability to exist and absent from the story told about that capability.

Why This Matters

Companies building visible end items may attract the most press and capital, but they risk converging toward parity because everyone can see and compete on visible capabilities. In an acquisition system built around requests for an end item (e.g., “I need a drone”, “I need a satellite”), companies building diagonal riders can be too easily overlooked.

Humphreys built a better frigate by asking what would have to be true to fit a ship of the line’s armament aboard one. Equivalent opportunities exist today. A founder who identifies an implicitly accepted constraint and breaks it is paving the way for visible capabilities to exist, and a healthy defense ecosystem must innovate at least as much on diagonal riders as on the visible platforms they enable.

The same logic applies in reverse. If successful allied capabilities have diagonal riders, so do adversaries’ capabilities. Those diagonal riders are often less protected than the platforms they support, because they are invisible even to the people who depend on them. A platform stripped of its diagonal rider reverts to the constrained state, the way Chesapeake reverted to just another frigate. Analyzing an adversary’s capabilities without identifying its diagonal riders is doing half the work.

Humphreys’ diagonal riders were invisible in the battle and largely invisible in the thirty-year argument over who deserved credit for the ships. They were also the reason the ships won duels. We need better language for this kind of technology. We offer: the diagonal rider.

America 250 is a chance to reflect on the men and women who built the country. Who they were. What they believed. How their example can guide us today.

Oceans of ink have been spilled on the subject, so we’ll just make one observation.

The Founders were builders.

For the past few weeks First Breakfast has profiled lesser-known heroes of the American Revolution. Their lives tell the story: A 25-year-old Boston bookseller who transformed into one of the world’s finest military logisticians and artillery commanders; a merchant who gambled his fortune to hold the Continental Army together (and who injected a healthy dose of capitalism into that army’s acquisition system).

The Revolution’s household names lived similar lives. Washington was America’s Cincinnatus, pulled from his expanding business empire at Mount Vernon to lead an army and then a new nation. Jefferson was not just a wordsmith but an architect, a farmer, and an inveterate tinkerer. Franklin was a serial inventor and scientist. The list goes on.

These were the men who built America. But it wasn’t just an exceptional few.

The colonies were teeming with Americans looking to make a name for themselves, to make their mark and their fortune (or at least a dignified, honest living), and to scratch a civilization out of the wilderness.

These Americans were restless, with a strong heretical streak. Always expanding, always hustling, always building. They caused massive headaches for the British government even in peace. They were nonconformists, in religion and habit. They settled where they weren’t supposed to. Traded with parties they weren’t supposed to (Loyalists complained that many of the most ardent Patriots, such as John Hancock, were smugglers—and they were right!). They were proud of their liberty and chafed at laws made by distant, unfeeling masters. Then they dumped East India Company tea into Boston Harbor, fired on the Redcoats at Lexington and Concord, and rebelled against a superpower.

That, in a nutshell, is the spirit of America. If you look at the broad sweep of American history you can see that spirit at work as our nation has expanded. Manifest Destiny. The Transcontinental Railroad. The telegraph. The Panama Canal. The Wright Flyer. The Model T. The Arsenal of Democracy. The microchip. The Moon. The Internet. Reusable rockets. Artificial Intelligence.

That’s just America’s first quarter millennium. We, the Americans living today, get decide what the next quarter millennium has in store.

America’s orientation has always been fixed: up and out. Our pioneers settled a continent, coast to coast. Our traders expanded our commerce around the globe. Our workers and engineers built cities to the heavens—and built flying machines to take us higher.

It’s easy and tempting to lower our gaze and fixate on our problems. They are real and deserve urgent attention. But Independence Day is our annual reminder of the virtues and spirit that are always necessary to solve problems, fight entropy, and ascend to a higher plane of civilization.

The Founders were builders. Build like them.

“My dear general, I can never do things in the small. I must be either a man or a mouse,” wrote Robert Morris in a 1793 letter to his friend and president, George Washington. The words were written amidst a land speculation bet that led to Morris’s financial and reputational ruin and consigned him to the margins of history. Yet it was the very audaciousness of this lesser-known Founding Father that would prove indispensable, time and again, to the fledgling republic.

Morris financed and supplied the Continental Army, famously extending his personal credit to do so. He created a privatized procurement system and advocated for fiscal responsibility in repaying the national debt at a time when both measures were unpopular. He was a free-market capitalist who believed financial policy should “be founded in the nature of man; not on ideal notions of excellence.” And he was one of only two men to sign the Declaration of Independence, the Articles of Confederation, and the Constitution (Roger Sherman of Connecticut was the other).

But first and foremost, Morris was a merchant. He was born not in the Colonies but in Liverpool in 1734. When Morris turned 13, he joined his father in Maryland. The senior Morris was a tobacco trader and soon sent his son away to Philadelphia to learn the trade. While he inherited a decent sum of money on his father’s death a few years later, the younger Morris was fast becoming a successful entrepreneur in his own right. At 21, he founded Willing & Morris with Thomas Willing, the young heir of the trading house where they both worked.

Morris’s biographer Charles Rappleye described Morris’s rise as “an unprecedented ascent for an outsider at a time when family connections were largely determinative.” Willing & Morris established itself as one of the most influential trading houses in the Colonies. Morris recounted how he dispatched a staggering “50 to 60 sail of stout ships” during the winter of 1774. He was eager to trade as much flour and wheat with the British Empire before hostilities forbade it. The aggressive trade expedition illustrates Morris’s opportunistic nature—a nature that would later be weaponized against him as evidence of corruption and avarice.

Morris was neither a zealot for independence nor a naive loyalist. He was an early opponent of the Stamp Act in 1765, yet he urged reconciliation with Britain for over a decade later. When Parliament enacted the Intolerable Acts in response to the Boston Tea Party, Morris understood the stakes had changed, even if he believed reconciliation was still possible. In 1774, he wrote “Poor America. This is the beginning of troubles, but its [sic] better to die bravely than be starved by pickpockets.” He would apply the full force of his abilities to the rebel cause.

Tell Me, Muse, of the Man of Many Jobs

The most proximate problem was how to arm the Continental Army. Washington’s gunpowder shortage was severe. At one point, the general resorted to mixing sawdust with powder. In response, in 1775 the Second Continental Congress formed the Secret Committee of Trade to secure arms and ammunition.

Morris’s status as the foremost colonial merchant was fundamental to overcoming the challenges facing the 13 colonies. The would-be nation was without a navy, a currency, a bank, or formal diplomatic channels. A successful merchant served as a sort of privatized expression of these functions.

Morris soon led the Secret Committee. The moderate Pennsylvania delegate operated a networks of spies, established clandestine supply lines in Europe and the West Indies, and administered contracts, often using false cargo registers and sailing orders to avoid detection. It was dangerous work—the sea swallowed ships as often as the Royal Navy did. Morris nonetheless secured the principal source of powder and saltpeter for the Continental Army. He may have been the most reluctant signer of the Declaration of Independence, but Congress could not have asked for a more creative and enthusiastic arms smuggler.

The Secret Committee of Trade was only the beginning. Within months he led the Marine Committee (charged with standing up the Continental Navy) and the Secret Committee of Correspondence (in essence, a nascent State Department). The country’s first warship was none other than Willing & Morris’s Black Prince. It was fitted out as a 24-gun frigate and renamed the Alfred. Morris supervised the construction of ships and commanded naval operations. These actions were complementary to the primary mission of the Correspondence Committee, namely, establishing diplomatic ties with potential European allies. He supplied diplomats with speedy packet boats to survive the contested passage littered with British cruisers.

Thus was Morris instrumental in opening up the critical supply lines with France. In September 1776, Morris, along with Secret Committee colleague Benjamin Franklin, learned that France would covertly supply America with major shipments of arms. The two determined “It is unnecessary to inform the Congress of this intelligence at present, because Mr. Morris belongs to all the committees that can be properly employed in receiving and importing the expected supplies.” Morris’s centrality to affairs could not be plainer.

Yet his resume continued to expand. In December 1776, as General William Howe’s troops prepared for a push into Pennsylvania, the delegates of the Continental Congress fled Philadelphia for Baltimore. Morris was one of three delegates to remain, where he operated under the express orders to “execute Continental business.” His modest responsibilities included running the Navy solo. Rappleye writes, “At this crucial juncture, he was essentially serving as chief executive of a beleaguered government facing its most severe trial.” Morris had an indefatigable work ethic and was not prone to self-pity. Still, a letter to John Jay conveys the intensity of the work: “The business of this committee engrosses my whole time & increases daily. I am now the veriest slave you ever saw.”

Morris would soon be lending more than just his time to the republic.

Monopoly Money

In a wartime economy, a country’s financial system is redirected toward financing a war. During World War II, the U.S. government issued war bonds to raise money while minimizing inflation. Such a redirection is, of course, contingent upon a country having a public financial system. Revolutionary America’s wartime economy was often just Robert Morris personally bankrolling the new nation.

Under the Articles of Confederation, the government lacked the ability to levy taxes. It could “requisition” (i.e. nicely ask) the states for revenue, but—unsurprisingly—the states often found they had little money to volunteer. Without guaranteed revenue, the government could not establish creditworthiness. It resorted to huge printing runs of the new national currency. Before long, the phrase “not worth a continental” was as commonplace as the refusal to accept the currency as a means of exchange.

And that is how the nation came to rely on so precarious a backstop as one highly levered merchant.

Throughout the war, Morris purchased all manner of supplies using his own credit. Hard currency was in such short supply that Morris lent Congress the entirety of his personal reserves. The icy winter of 1776 would have been even colder if not for Morris. He financed the purchase and directed the transportation of thousands of blankets and wool stockings that arrived in time for Washington to stage his attack on Trenton.

Nearly five years later, as Washington prepared for a long march south from New York to the Chesapeake, the absence of a functional paper currency threatened the entire campaign. Morris made the bold move of printing and circulating a new paper issue. These “Morris notes” were nominally associated with the government but were in fact backed by Morris’s personal credit; if Congress failed to provide funds, Morris himself was on the hook. Generals Washington and Rochambeau had provisions for Yorktown because of Morris. An otherwise reserved History of Government Contracting is effusive in its praise: “Without his financial connections, attention to detail, and superb administrative talents—and issue of over one million dollars of personal credit—the outcome of the battle, and possibly even the war itself, might have been different.”

In 1781 the Continental Congress unanimously elected Morris to be the Superintendent of Finance. It was one of four newly created executive departments. While the title brings to mind our modern Secretary of the Treasury, the position was functionally the chief executive of the government. George Washington was arguably the only individual more powerful than Morris.

One of Morris’s enduring contributions as Superintendent—both to the country and specifically our modern defense industry—was his implementation of a private contracting system. For most of the war, the procurement of supplies was an entirely public function. Commissaries bought, stored, and distributed goods to the Army. The incentive structure was deeply flawed. Agents were paid commissions as a percentage of what they spent, and fraud was rampant. States, meanwhile, were expected to supply the government with whatever they could spare via a a barter-like system known as “specific supplies.” When states managed to pony up beef or flour, the food often spoiled for lack of funds to transport it.

Morris considered the whole system “almost useless to the government.” He was forced to implore the states for supplies, warning that those who failed in their duties “will have to answer for it to their Country, to their Allies, to the present Generation, and to all posterity.” He detested making these moral appeals. Morris was a markets-oriented merchant who believed in the power of financial incentives.

The private contracting system he implemented appears straightforward today, but it was a dramatic departure for the time. Morris issued calls for supplies, and businesses responded with sealed bids. Contracts were awarded to the lowest bidder who could also provide the most generous payment terms to the impoverished government.

The system wasn’t perfect. There were reports of collusion among contractors and tainted goods. But Morris’s system was unquestionably more effective and cheaper than the commisary system, and it crucially did not depend on anything so fickle as the altruism of man. In 1783, Washington wrote, “I have...the satisfaction of seeing the troops better covered, better clothed, and better fed than they have ever been in any former Winter Quarters.” By dispensing with the romanticism of a voluntary call to arms, Morris was liberated to define a capitalist relationship between government and industry that persists today.

No Conflict, No Interest

Morris was an easy target for his enemies. Throughout his public service, he remained active in private business. His trading house Willing & Morris at times received half of all contract dollars that flowed through his committees. Other contracts for supplies frequently went to merchants in his network. A 1779 Congressional investigation accused Morris of using public office to enrich himself and award preferential contracts to his friends while leading the Secret Committee. He was never found guilty of wrongdoing, but the accusations stuck and contributed to his unjust legacy as America’s first war profiteer.

The Congressional investigation was ironic in light of the covert affairs Morris was leading. All actions of the Secret Committee were treason against the Crown. Morris could not exactly publicize a gunpowder smuggling contract in fair and open competition. It’s clear that Morris was valuable to the Revolution precisely because of his network of suppliers, international relationships, access to credit, and physical assets at his command. Further, some of the enmity directed toward Morris was more ideological than personal. Virginia delegate Richard Henry Lee, for instance, simply had an objection to capitalism, remarking “The spirit of commerce is the spirit of avarice.”

The negative attitudes toward businessmen leveraging their private networks in service of the war would foreshadow later criticisms of the “dollar-a-year men” during World War II. Wartime production czar William Knudsen was maligned for his connections to the automotive industry. But to limit wartime mobilization jobs to those without industry experience would be to limit the jobs to those who were definitionally unqualified. At no time was this more true than the American Revolution, when there was no federal infrastructure to mobilize.

The end of Morris’s tenure as the Superintendent of Finance was prolonged and painful. His March 1783 letter of resignation declared, “I never will be the Minister of Injustice.” Morris had grown too frustrated with Congress’s indifference to paying its debts and creating a creditworthy nation. It took him almost two years to extricate himself from the role because a fresh crisis had occurred: the soldiers hadn’t been paid in months and were threatening mutiny.

Their destitution was, in fact, an issue that had plagued Morris and Washington throughout the entire war. Now as Washington prepared to disband the army, he despaired over sending his men home “like a set of beggars.” Morris would be the nation’s piggy bank one last time. He issued notes redeemable in six months and backed by his personal credit. He then personally signed six thousand notes. In all, he issued some $1 million to feed and pay the troops. These were onerous financial obligations that exposed Morris to serious personal risk.

It was a mostly thankless job. Those who accused Morris of getting rich were perfectly happy to watch him overextend himself. Morris was not after plaudits, but he cared about his reputation. To defend his integrity, Morris published a 200-page Statement of Accounts shortly after leaving office. “The master should know what the servant has done,” began the report addressed to his “Fellow Citizens.” What followed were detailed actuarial tables and financial statements—from Morris’s public and private dealings—of revenues, expenses, and loans from his time in office. He printed 500 copies and distributed them to Congress.

Despite the rocky resignation, Morris was not finished with public service. He remained influential in Pennsylvania politics and was a natural choice to be one of the state’s inaugural senators. President Washington then approached Morris to be the nation’s first secretary of the treasury. Morris declined the role but astutely recommended Alexander Hamilton for the job.

In another example of Morris’s mangled legacy, his influence on the nation’s financial future is all but erased. Hamilton’s financial plan of 1790 was directly inspired by Morris’s ardent campaigns as superintendent of finance. The federal government would assume the states’ debt and fully fund the national debt. Creditors would be paid in full, restoring the public credit of the new government. And the whole funding scheme would be possible because there was finally a revenue foundation via national taxation.

Hamilton succeeded where Morris had failed because he had what Morris never did: the Constitution’s taxing power. Morris brought a knife to the fight, while Hamilton got to bring a gun.

Maybe someone should make a musical about Morris.

Icarus

Morris was an entrepreneur and a workhorse. After exiting public life, he relished the opportunity to dedicate the next chapter of his career fully to the private sector and create an empire. He used credit to buy up millions of acres of land in New York, Pennsylvania, and the District of Columbia. Morris’s big bet was that land prices would rise, European and American buyers would appear quickly, and credit would remain loose.

Those assumptions didn’t hold. Notes were issued against future land sales that did not materialize, and lawsuits, weak demand, and a tightening credit market put the squeeze on Morris. When it became clear he was headed towards financial ruin, he he did what gamblers do and doubled down. It didn’t help that his business partner and Pennsylvania comptroller, John Nicholson, was corrupt in ways Morris never was.

Morris and Nicholson had over $12 million in combined debt by 1796. Morris was arrested and spent three and a half years in a debtor’s jail in Philadelphia. His freedom was salvaged by the enactment of a personal bankruptcy law in 1801, but his finances and reputation were beyond recovery. He quietly spent the rest of his life with his steadfast wife Mary, the mother of his seven children. They subsisted on a small stipend from Morris’s longtime friend and fellow Founding Father, Gouverneur Morris (no relation). Robert Morris died in 1806.

Morris was a man of contradictions. He was skeptical of independence from Britain but worked doggedly to achieve that goal once it was set. He mastered the intricacies of monetary policy but was also comfortable chumming it with sailors on his ship decks. And he created the blueprint for America to pay her debts, only to die crushed by his.

Yet there is no contradiction where it mattered most: Morris consistently chose the republic over himself.

Further Reading

• Robert Morris: Financier of the American Revolution by Charles Rappleye (2010)

• A History of Government Contracting, Second Edition by James F. Nagle (1999)

The Patriots who gathered outside Boston to fight the British in 1775 were a motley crew, high in spirit but hardly an army at all. They had no standard flag, uniforms, equipment, or arms. No military discipline. They had barely enough powder to fire their weapons, much less to dislodge the Redcoats.

The situation was enough to drive as stoic a figure as General Washington to despair. As David McCullough recounts in 1776, when Washington first heard of the dire shortage of powder, he was so stunned he did not speak for half an hour.

Little wonder the British force under General Howe, with perfect military organization and the full firepower of the Royal Navy at their backs, dismissed their enemy as “the country people,” the “rabble in arms,” and even the “peasantry.” If past peasant revolts were a guide, this would be a brief campaign. The Patriot “army” would not survive its first winter.

Perhaps those predictions would have come true, if not for the timely arrival of 58 cannons and mortars in January 1776, which allowed the Patriots to seize the high ground around Boston and send the British packing.

That logistical feat was the work of a 25-year-old Boston bookseller named Henry Knox, Washington’s “indispensable man,” to quote his biographer Mark Puls, as well as the nation’s first secretary of war. More than any other man save Washington, it was Knox who bound together the Continental Army like one of the volumes in his shop. He did it through careful study, unceasing action, and boundless curiosity about the technology and training that a smaller, poorer force needed to take on a superpower.

250 years later, America’s military and defense industry are downstream of Knox and the institutions he built. As America relearns how to make the weapons we need to defend ourselves, we should learn from the man who did it first.

The Boston Bookseller

Henry Knox had a hard-knock upbringing. Abandoned by his father in 1759, the nine-year-old Henry withdrew from school and went to work to support his family. His mother wisely found him work at a bookshop so that Henry could continue his education on the job and meet the educated people who frequented such shops.

Henry took full advantage of the opportunity in his teenage years, reading anything he could get his hands on about politics and his burgeoning interest, military science. He also taught himself French under the then-widespread belief that the colonies would eventually rehash the French and Indian War. His language skills would eventually help him communicate with the French as allies instead of as enemies.

Knox knew the value of education but he was not the owlish type. Physically imposing and boisterous, he was a natural leader and man of action. He took an interest in the town’s affairs and joined a local artillery company, where he learned to drill and operate cannons. The militia, known as Paddock’s Train, was run by a local chairmaker, which must have planted in Henry’s mind the idea that citizens could make fine soldiers. Later, Henry used the proceeds from his own bookstore to co-found his own artillery company, which made him known to British authorities as a capable—possibly, a dangerous—man.

They were right to worry because Knox’s sympathies were with the Patriots. His bookstore stocked Patriot pamphlets (including pseudonymous works by a young college student named Alexander Hamilton). He was present at the Boston Massacre, where he tried to prevent the confrontation from escalating to violence. He later joined the Sons of Liberty and supported its boycotts of British goods, even though as a seller of mostly British books—his store was called Knox’s London Bookstore—it meant loss of business.

Knox had skin in the game in more ways than one. His wife Lucy was the daughter of a well-to-do Tory. Disturbed by her marriage to a merchant and Patriot, the concerned father tried to buy Henry’s loyalty with a commission in the army. Sticking to his guns, Henry declined.

When news of Lexington and Concord jolted Boston, British authorities forbade Henry and other men with military skills from leaving the city. He and Lucy fled in disguise, leaving behind their possessions, family, and hopes for a normal life. Lucy in particular paid a heavy price for her bravery. She was estranged from her family, who moved to England and never spoke to her again.

The future must have seemed forlorn when Henry arrived at the camp of liberty outside Boston. Ramshackle, stinking from open latrines, and disorganized, it was an unlikely setting for the Glorious Cause. The camp had desperate need for fortifications and other works but not a single engineer worthy of the name. Henry’s knowledge of military science, from book learning and service in the militia, was invaluable in an army with little practical experience. He immediately went to work fortifying the camp. He did so for free as a civilian, volunteering his services until the Continental Congress approved his commission many months later.

General Washington identified the young Mr. Knox as a rare talent and in the fall of 1775 promised him command of the Continental Army’s artillery. The command was more theoretical than real. As Puls writes, “[w]hen Washington informed Henry that he was to take over the army’s artillery, Knox teasingly asked where the artillery was. Washington admitted that there was almost none to speak of.”

Henry would have to bring the bang himself.

Knox’s ‘Noble Train’

An opportunity presented itself almost immediately. In May 1775, the Green Mountain Boys under the command of Ethan Allen and Benedict Arnold captured Fort Ticonderoga on the border of New York and Vermont. The Continental Congress helpfully decreed that the fort’s cannons should be sent to General Washington. The only question was how.

Knox, then still a civilian in his twenties, volunteered to lead the expedition. Many in Washington’s inner circle doubted it could be done and worried about a blow to morale if the venture failed, but Washington decided to gamble. Given the state of the army, he had little to lose.

It was undoubtedly a perilous undertaking. Three hundred miles of muddy roads, rivers, and mountain separated Boston from Fort Ticonderoga. Moving 60 tons of artillery along this route—some weighing as much as 5,000 pounds apiece—would require brute strength, force of will, and impeccable timing. With winter setting in, the success of the voyage hinged, first, on getting the cannons across Lake George before it froze and, second, on sledding the cannons across frozen ground and rivers once on land. Knox’s “noble train of artillery,” as he called it, would come by water and then by ice.

The expedition took three months and was beset by temperamental weather and other obstacles. The roughly 40-mile journey down Lake George took eight days of hard rowing, breaking ice along the way. Then a “cruel thaw” delayed the overland convoy of 42 sleds and 80 yoke of oxen. Eventually a blizzard descended, allowing the sleds to move but only in the most bitter conditions. The expedition crossed the frozen Hudson River (losing a cannon through the ice, which took a full day to retrieve), see-sawed through the snowy Berkshires, and finally arrived in the Patriot camp in late January. Washington’s—and Knox’s—gamble had paid off.

The expedition had strategic consequences insofar as it enabled the Continental Army to occupy the Dorchester Heights overlooking Boston. While Knox’s new cannons bombarded the city, thousands of workmen snuck onto the heights in dead of night to erect fortifications, dig trenches, prepare obstacles, and place cannons. When dawn broke, the British were astonished to find a rebel fortress overlooking the city. Their position untenable, they were forced to evacuate the city by sea shortly thereafter. Knox’s cannons won the Siege of Boston in an almost bloodless victory, buoying the Continental Army at a time when it might have disintegrated.

The three-month quest taught Knox a great deal about military logistics and artillery that he put to good use for the rest of the war. The Continental Army’s legendary crossing of the Delaware on Christmas 1776 was orchestrated by Knox, the master of perilous river crossings. He oversaw the movement of an incredible 350 tons of artillery, men, horses, and supplies on shallow-draft boats whose crews he had recruited. First-hand accounts of the crossing recall the confusion and darkness of the night, punctuated by Knox’s booming voice directing the traffic. He later crossed in the same boat as Washington. By the Siege of Yorktown five years later, Knox’s artillerymen and engineers were as professional a force as any in Europe, drawing praise from normally superior French officers. Knox’s cannons, often aimed by his hand, laid down a punishing fire at Yorktown that made resistance impossible and hastened Cornwallis’s surrender.

So vital was Knox to the American victory that Washington recommended his promotion to major general after Yorktown in defiance of a seniority system that said he had not reached the minimum age. Congress agreed, granting the promotion “on account of his special merit and particularly for his good conduct at the siege of Yorktown.” Knox was 31 years old.

An Army Worthy of a Free People

Knox’s achievements as an artillery commander are more than enough to qualify him as an American hero. The institutions he built during and after the war vault him into an even higher strata. America’s defense industrial base, professional military education system, and armed forces bear his fingerprints. Knox was not only a warrior but a builder.

The guns of Ticonderoga, like many of the arms the Patriots used, were cast by the French. Knox was only too happy to use foreign arms in a pinch, but he knew America needed the means to produce such weapons itself. If America could not make its own arms, the Patriot cause would be at the mercy of others. “Let us for a moment suppose a misfortune happen to the field Artillery we have in this army,” Knox mused to John Adams in August 1776. “Where shall we get immediately supplied—not in America.”

To address this problem, in December 1776 Knox penned “A Plan for the Establishment of a Corps of Continental Artillery, Magazines, [and] Laboratories.” The plan called for the creation of a defense ecosystem that could produce artillery, small arms, and munitions and train a cadre of skilled American craftsmen. The first priority, he wrote, was to build and mount 150 cannons. It was an audacious proposal at a time when the Continental Army was in headlong retreat and Congress was evacuating Philadelphia in expectation of a British invasion (around that time, Washington wrote to his brother that “the game is pretty near up”).

Yet Knox’s plan was prescient. The next year, after the crisis passed, Washington entrusted Knox with selecting the sites for American arsenals. One of the sites Knox selected was Springfield, Massachusetts, ideally situated on the Connecticut River as a source of power and means of transportation. Knox was intimately involved in the technical details of the site’s construction, stipulating the types of furnaces, mills, and other works that were needed, authorizing the recruitment of skilled laborers, and securing supplies of copper and tin for cannons. The Springfield Armory would produce weapons for the American military well into the Vietnam era. The surrounding Connecticut River Valley was America’s first true industrial cluster, pioneering mass production using interchangeable parts. It is little exaggeration to say that Knox’s sound judgement in wartime laid the foundation for America’s industrial boom in the nineteenth century.

Weapons factories were one thing, but Knox knew the American cause also needed factories for men. Like Washington, Knox was generally unimpressed by the quality of American officers. “There is a radical evil in our army—the lack of officers,” he wrote in 1776. “We ought to have men of merit in the most extensive and unlimited sense of the word.” Not everyone could be an autodidact like Knox, so the solution was an academy modeled on the European tradition that could teach promising Americans the science of war. “Military academies must be instituted at any expense,” Knox wrote to Adams. “We are fighting against a people well acquainted with the theory and practice of war—brave by discipline and habit furnish’d with every implement of war necessary for any enterprise. What do we oppose to these?”

In 1778, while the army wintered in Pluckemin, New Jersey, Knox founded such an academy. Again it was an unusual priority, as the Continental Army faced critical shortfalls of virtually every kind of supply, including food. Yet Knox knew training could not wait. The academy he built was at the center of camp and its tallest building. Knox developed the curriculum and was essentially the sole instructor, leading live demonstrations of the weapons in the Continental arsenal. He also used the academy to create a feedback loop between the factory and the frontline. As Puls writes, “[d]uring lulls of activity in the war front, artillery officers would be sent to the military laboratories to learn more about munitions manufacturing and gain knowledge that might be helpful in the field.”

The Pluckemin school was the first military academy in the Americas and a direct predecessor of the U.S. Military Academy at West Point—another Knox brainchild. In the immediate aftermath of the Revolution, Knox submitted a brief to Washington on the military institutions the new republic needed to defend itself. He identified the fort at West Point as the “key to America” and argued for co-locating a military academy with the existing arsenal. The students at the academy would get an education in theory and action, just as Knox had gotten in his youth. “All the scholars should be obliged to study the science of artillery and engineering,” he wrote. And they should learn by observing and mingling with the “artificers,” or factory workers, who operated the “manufactor[ies]” of small arms and cannons on site. In his final years, Knox had the satisfaction of learning that President Thomas Jefferson authorized the opening of a military academy at West Point along these lines.

When the Peace of Paris concluded in 1783, Major General Knox desired nothing more than to leave the military behind and reunite with Lucy and his children. Like Washington, however, his fellow citizens soon called him back to service. Briefly floated as Washington’s vice president, Knox accepted a more familiar post as America’s first secretary of war, where he prepared America’s military for a new challenge: preserving the Constitution and America’s independence.

Many Americans were skeptical of a standing army, viewing it as a threat to liberty from long and painful memory. Knox, who had smelled the powder and blood of the Boston Massacre, sympathized with their concern. But he knew a modern army was the only way Americans could remain free. The solution was to build a new kind of government and military that was worthy of a republic and, as he put it, “compatible with the interests of a free people.”

The brief he wrote to Washington in 1783 explains what was required to build such a military. First, the American people themselves would have to be trained and prepared to fight. “The people universally should be furnished with arms and know how to use them,” he wrote. The states should raise strong militias. And the national army should be capable and led by well-trained men of character, which required conscious efforts to “make the profession of arms honorable.”

The key to Knox’s vision for a republican army, from Pluckemin to West Point to the Office of the Secretary of War, was its emphasis on people. America needed strong institutions to create the leaders it needed to remain free; it needed strong leaders to steward those institutions and help America remain free.

Books and Battle

Henry Knox is not as well-known today as he deserves. He lacked the ambition and self-promoting tendency of equally brilliant men like Hamilton and Jefferson. His finances were always perilous and shoring them up preoccupied his later years. He also suffered repeated personal tragedies. Only three of his 13 children with Lucy survived to adulthood, shrinking what should have been an illustrious line. His surviving son, Henry Jackson Knox, ended up in a debtors prison.

Forgotten for too long, this year is the perfect time to burnish Knox’s legacy and reflect on the lessons of his life.

Knox reminds us that theoretical and practical knowledge go hand in hand. A young Henry learned to be a military engineer in Boston bookstores and bloody battlefields. Without the former, he would not have been useful on the latter—or at least, he would have faced a much steeper learning curve.

Knox also shows once again the primacy of people. He was an exceptional talent, used to his full potential by Washington. He multiplied his legacy by creating institutions to train future exceptional talents.

Our Armed Forces, our defense industry, and our freedom are downstream of Henry Knox: America’s first defense technologist.

BLAKE MCFALLS is a rising senior at Trinity Preparatory School of Florida.

Throughout 2025, China exploited its rare earths stranglehold in trade conflict with the United States. In April 2025, China temporarily halted exports of rare earths to the United States, shocking defense and commercial industries alike and prompting immediate action from the Trump administration. The principal focus of the administration has been investment in private mining and refining enterprises to grow a rare earth supply chain independent of China. While providing federal financing is important, the government also needs to focus on the most significant gap between China and the United States in this area: human capital, or the collection of experts, skilled workers, and knowledge required to produce rare earths domestically. Closing the human capital gap is the most critical move the Trump administration can currently take to rebuild a domestic rare earths manufacturing base.

The effort will require an extraordinary role reversal between the two countries. After the Second World War, the United States, principally through the Ames Laboratory at Iowa State University, pioneered the discovery and refining of rare earths. Dr. Frank Spedding led the effort, bringing his experience from the Manhattan Project to create the Ames Laboratory through federal government funding and state university support. Ames attracted dozens of chemists who pioneered the foundational methods for separating rare earths. Its efforts benefited both the federal government and private industry.

However, as federal government interest and support waned in the 1970s and 1980s, the human capital backbone in the United States collapsed. A generation of scientific pioneers retired and federal funding disappeared. The necessity of investing in rare earths innovation vanished, as American companies were able to outsource research burdens to China. The basic know-how of processing rare earths and building laboratory infrastructure was transferred to China on a one-way trip.

China was able to mirror early U.S. industrial policy in rare earths, overtly building off earlier U.S. contributions to the field. The father of Chinese rare earths, Xu Guangxian, received his PhD in chemistry from Columbia University in 1951. His thesis regarding Quantum Chemical Theory was a concept that would prove transformative to the study of rare earths worldwide. Xu returned to China and eventually established the Research Center of Rare Earth Chemistry in 1986, working in collaboration with Nankai University’s School of Materials Science and Engineering and the National Institute for Advanced Materials. The Chinese government continued this strategy by expanding upon its State Key Laboratory (SKL) System with the founding of the SKL Rare Earth Materials Chemistry and Applications in 1989. In essence, China used existing American human capital and the American model of leveraging universities to further innovate and build necessary infrastructure to dominate rare earth expertise.

At the very same time, the United States was losing its knowledge as support for domestic mining plummeted, university funding decreased, and the federal government dawdled. By 2010, a panel of experts, including one of the key members of the Ames Laboratory, warned Congress that the U.S. human capital foundation of the rare earth minerals field had disappeared, creating a key strategic vulnerability for the United States. Dr. Karl A. Gschneider testified that “some of [these] rare earth experts have moved on to other industries, others have retired, and others have died, basically leaving behind an intellectual vacuum.”

Though the federal government heard these warnings for years, it did not listen and took no action. The United States needs engineers to mine and process, scientists to continue doing the basic research, and educators to train the next generation of experts who will rebuild what the country lost. As a result, even if current initiatives to support processing succeed in terms of private investment — such as the Department of War’s investment in MP Materials — the United States does not have a critical mass of talent to sustain the scaling of an independent and innovative U.S. supply chain.

Rebuilding a Workforce

At the core of reviving U.S. rare earths capability is rebuilding a domestic workforce that can support growth to foster and scale long-term innovation. This includes engineers and skilled labor for extraction, midstream processing, and downstream manufacturing. The federal government needs to ensure and enhance the education and training of a new generation of engineers and workers, incentivize the lateral movement of talent from adjacent industries, and turn to skilled labor immigration where necessary.

A. Educating Engineers

Processing is the largest vulnerability in the rare earth value chain; a key reason for the lack of processing capacity is the difficulty of obtaining expertise. One of the most significant advantages China has over the United States is its knowledge on processing practices. Chinese IP strength would not matter if the United States had its own supply of rare earth specialists, but America is uniquely weak here. Upstream, the number of college engineering graduates entering the mining industry has declined by 39 percent since 2016. In mining itself, the differences are even more stark: China produces 3,000 mining graduates annually, while the United States only produces 162.

Similarly large gaps are present in midstream processing. In the United States, Europe, and Japan combined, there are only a few dozen processing specialists. China has thousands. Thus, the United States lacks knowledge on rare earth separation and refining techniques. The difference in human capital is reflected in recent patent data; 81 percent of all new rare earth patents are filed in China. Closing the gap over the long haul will require the federal government to work closely with universities and federal labs to offer training and employment to engineering and geoscience students.

The United States must also encourage the lateral movement of talent from adjacent industries, such as battery and solar manufacturing. This was how the United States government was able to develop the Cold War generation of computer scientists at a time when the country lacked a baseline workforce. In the 1950s, the U.S. government gave grants to RAND in order to train the workforce that would build SAGE, a supercomputer designed for nuclear deterrence. Although most hires did not understand supercomputing, RAND developed 800 specialists by scouting for exceptional STEM talent and training new hires for four months.

B. Lateral Movement and Training of Skilled Workers

After garnering baseline talent, the United States must create a mechanism for skilled workers to specialize in and enter the rare earth industry. The talent should be channeled into the following skillsets: process control engineering, lab expertise, and solvent extraction plant operation. Drawing from its aforementioned Cold War computing successes, the U.S. government should award grants to training institutions. To a small extent, the Department of Labor (DOL) has already done this. In May 2025, the DOL’s Apprenticeship Building America (ABA) Grant Program awarded a grant to ReElement Technologies Corporation (ReElement), an industrial processing firm with experience in rare earth processing, and Ivy Tech Community College of Indiana to partner on rare earth industrial training.

Focusing on apprenticeship, the initiative will lay the foundation for rare earth IP in Indiana, attempting to develop 300 rare earth specialists for ReElement’s main rare earth operations. The DOL should make the program more widespread, combining the few sources of IP in the private sector with vibrant intellectual communities in universities across the country. Expanding the program would have bipartisan support in Congress, as did similar programs in the CHIPS Act. The Department of Energy (DOE) intends to expand its use of Industrial Training and Assessment Center funding for the retraining and development of a critical minerals workforce; it is essential for these initiatives to be harmonized under one body. The Trump administration must consider whether the DOL or the DOE is better to handle rare earth workforce development, or else talent growing initiatives will be decentralized and less effective.

C. Friendshoring Engineering and Skilled Labor Where Necessary

If the administration wishes to develop domestic expertise, it must consider some selective policy redirection. There is an opportunity for the administration to be more welcoming to genuinely high-skill immigration in rare earth elements extraction and processing. There is a lack of such talent immediately available, and upskilling the domestic workforce will take time even under the most optimistic of timelines. The U.S. government should give more attention to the EB-2 specialized visa. The EB-2 visa, like the EB-1 visa, is reserved for top global talent in specific fields that the United States deems demanding extra expertise. However, EB-2 visas can be approved for more people than the EB-1 visa.

Friendshoring this talent from U.S. allies like Australia could focus principally on metallurgists, chemical process engineers, materials scientists, and logistics experts. While it would be ideal to pilfer Chinese talent in these areas, China’s restrictions on IP outflow present an obstacle. China not only finalized a ban on the export of rare earths processing technology in December 2023, but has also banned workers in the rare earths sector from revealing intellectual secrets. In 2024, China jailed a Chinese worker for 11 years for stealing state secrets on rare earth processing practices, suspecting the worker of exporting the information to other countries. A creative workaround for the United States would be a sort of Operation Paperclip, where the government would aggressively—and covertly—recruit China’s elite rare earths talent to move to America with their entire families.

Further catalyzing labor integration into rare earths, the Senate Select Committee on the Strategic Competition between the United States and the Chinese Communist Party should reintroduce an unchanged version of H.R. 10375, the Critical Minerals Workforce Enhancement Act. The bill died in 2024, not because it had low support, but because governmental attention on rare earths was low. Now, the rare earths industry is a key concern of the legislative and executive branches. If passed, the bill would allow workers in these fields looking to enter the U.S. rare earth industry to sign a National Interest Waiver (NIW), which would allow these workers to receive visas without navigating regulatory hurdles other applicants must face. Additionally, the U.S. can continue using private sector applications, such as NES Firecroft, that organize and track talent pools in specific fields across the world in order to further speed up the process.

D. Universities, Federal Labs and Hubs

Longer-term U.S. innovation and leadership will require a reinvestment in the university and federal lab programs that enabled the U.S. to pioneer and dominate the rare earths industry during the Cold War. The Ames Laboratory pioneered most of the separation processes that industry used, and it worked closely with companies in encouraging the diffusion of processes and associated technical knowledge. Longer-term support for basic research in critical minerals could also facilitate materials innovation that would make substitution for some rare earth elements feasible or more attractive.

Again, these are challenges that the U.S. government was able to overcome in the past. In the 1950s, for example, the Pentagon needed titanium for the development of next-generation fighter jets, but defense contractors like Lockheed Martin struggled to properly make titanium usable in the aerospace industry. The titanium industry required technology at the same stage of the value chain as rare earths do currently.

As with rare earths in the 1940s and 1950s, the government looked to the universities and federal research to kickstart innovation. Throughout the 1950s, the U.S. government directly supported the Bureau of Mines Physical Metallurgy Laboratory College Park at the University of Maryland, resulting in a 1957 research paper that detailed the invention of the modern titanium electrode melting technology, which was monumental for titanium processing. Through government support, the industry took off within a decade of commencement. The government provided the R&D and the private sector took on innovation management. Costs fell 23 percent every time production doubled.

The United States could similarly support labs in Houston, a promising city for rare earths processing. If human capital is agglomerated in Houston, the city will have the talent to develop rare earth processing technologies in local chemical material labs, such as the University of Houston and Rice University’s Jones Lab. The Colorado School of Mines is another logical focus for government investment in developing expertise and training of future engineers. And, coming full circle, the federal government could revive and enhance support for the Critical Minerals Innovation Hub at Iowa State University, which not only has its own expertise, but works with other national laboratories in exploring a variety of approaches to the critical minerals gap with China.

The administration has done an excellent job prioritizing investments in rare earths projects, but another hurdle must be overcome to develop a sustainable U.S. supply chain. Developing baseline expertise in rare earths processing would be instrumental in ensuring that America eliminates this Achilles’ heel in its trade and defense strategy. Workforce capabilities must be developed in conjunction with current federal investments instead of at a separate time. Ultimately, it is the miners, engineers, and scientists who will determine whether the United States succeeds.

DR. NADIA SCHADLOW is a Senior Fellow at the Hudson Institute.

The recently concluded U.S.–China summit highlighted that Beijing continues to double down on an economic model that is focused on dominating the industries it believes are strategically important. As U.S. officials return home and consider proposals for a board of trade and board of investment, which according to the White House could result in “increase[ed] Chinese investment into [U.S.] industries,” they should keep one principle in mind: Chinese capital and firms should remain outside of America’s advanced manufacturing buildout.

Modern manufacturing is no longer about building more factories. The emerging industrial ecosystem will fuse materials, chemicals, hardware, software, robotics, AI, and vast streams of data. Tomorrow’s factories will not merely produce goods. They will generate information, shape supply chains, and help determine future military and economic advantages. They are as much data systems as production systems.

The national security stakes are clear. Future military strength will depend heavily on commercial manufacturing. Many Department of War reforms center on producing weapon systems at scale through commercial industry. As Secretary of War Pete Hegseth has put it, the Department will “prioritize the purchase of industry-driven solutions, commercial solutions first.” Army leaders seeking to acquire tens of thousands of drones are emphasizing modular “plug-and-play” systems that can be rapidly upgraded as battlefield needs evolve. This shift is occurring across all the services. As one Army official explained, “if whatever they’re building isn’t modular with other industry partners … then I’m going to go with another industry partner.”

This trend makes the integrity of America’s industrial base even more important. Companies that build robotics, autonomous platforms, industrial software, and precision components may not have traditionally been viewed as defense firms, but many now sit at the core of the national security ecosystem.

Another national security concern is that modern factories generate enormous amounts of data about machine performance, materials behavior, and supply chains. The National Institute of Standards and Technology notes that manufacturing facilities produce vast and expanding streams of data every day. For instance, a major concept in advanced manufacturing is the “digital twin,” which is a virtual, data-driven model of a factory, machine, or production system that continuously updates based on real-world operational data. In the wrong hands, this data is industrial targeting information.

The track record for granting China access to sensitive sectors of the American economy is decidedly bad. China has repeatedly used commercial relationships, various types of business partnerships, predatory hiring, supply-chain access, and embedded corporate relationships to acquire technology and industrial know-how.

That pattern is well documented. In 2018, the U.S. Department of Justice secured a conviction against Sinovel Wind Group for stealing trade secrets from American Superconductor Corporation, including critical wind turbine source code that helped accelerate China’s wind industry while damaging the American firm. A year later, the DOJ alleged that Huawei used commercial partnerships and employee recruitment to obtain sensitive U.S. robotics and telecommunications technology. Similar allegations later emerged involving Micron Technology, GE Aerospace, and GE Power, where U.S. officials accused Chinese-linked actors of targeting advanced semiconductor and aerospace technologies through insider access, recruitment, and theft of trade secrets.

U.S. policymakers recognize these risks and have taken steps to mitigate them. The first Trump administration expanded national-security reviews of Chinese acquisitions amid concerns that Beijing was using investment to gain access to sensitive technologies and critical infrastructure. In 2018, Congress passed the Foreign Investment Risk Review Modernization Act (FIRRMA) because it understood that foreign ownership, joint ventures, and access to sensitive data can all create national-security risks. (Despite these more rigorous reviews, outcomes remain mixed, with China still acquiring U.S. industrial base companies.)

Chinese capital could also end up crowding out American investment. The Trump administration and Congress have spent significant time and political capital trying to channel U.S. government and private funding into manufacturing and industrial capacity. The objective is understandable, but it is not easy. Traditionally, because manufacturing generates lower margins than sectors such as software, it has been harder to attract private investment. Recent efforts to address this difficulty have ranged from the Department of War’s Office of Strategic Capital initiative to mobilize some $200 billion in financing to programs across the Departments of Commerce and Energy. These initiatives also aim to attract private capital, such as JPMorgan’s $1.5 trillion “Security Resilience” initiative to support “key sectors from critical minerals to frontier technologies.”

China, however, has demonstrated a willingness to tolerate lower returns in pursuit of strategic objectives. According to the Rhodium Group, Beijing has increasingly inserted “non-market considerations” into investment decisions, prioritizing strategic goals at the expense of profitability. That creates an uneven playing field for American capital, which still largely operates under market expectations for returns and efficiency. Competing against a state-backed system willing to absorb losses could make it more difficult to sustain private investment in U.S. manufacturing.

China knows advanced manufacturing will shape the next era of competition, and it has spent over a decade determined to dominate it. Today, China is the world’s largest market for industrial robots. Its most recent five year plan prioritizes advanced manufacturing as a way to increase productivity, calling for “new quality productive forces”—that is, productivity driven by robots, AI, and other smart manufacturing. Furthermore, its 2025 AI + Manufacturing initiative aims to integrate intelligent agents into production lines and supply chains as part of an overall integration of AI into 90% of the Chinese economy by 2030. China sees advanced manufacturing as a strategic asset, not just a commercial sector.

This does not mean America should wall itself off from foreign investment. The United States should deepen manufacturing ties with allies. South Korea recently pledged $150 billion to help modernize American shipbuilding. Japanese, Korean, European, and other allied firms can help rebuild critical supply chains. But China is different. It is the United States’s chief strategic competitor, a state-directed industrial rival, and a government that has repeatedly used commercial channels to advance its national aims.

Some might argue that allowing Chinese firms to build and operate factories in the United States could generate valuable spillovers for American workers and companies. For decades, China benefited from foreign firms that brought production expertise and other know-how into its economy. Couldn’t the United States do the same with leading Chinese manufacturers?

The purported benefits, however, would not likely outweigh the costs. Many Chinese companies would operate with lower overhead due to government subsidies, allowing them to sell their products at artificially low prices. Tariffs on Chinese imports allow us to level the playing field, so long as Chinese firms are kept out. The ultimate issue is that any market that includes China is neither free nor fair, and providing additional vectors into sensitive and strategic parts of the U.S. economy would be shortsighted.

Requiring Chinese companies in the United States to form joint ventures (JVs) with American companies to mitigate vulnerabilities and acquire technology could be counterproductive for similar reasons. Those who believe that the United States should or even could duplicate Beijing’s forced-JV strategy forget that the U.S. government is not the Chinese government. Unlike the Chinese government, American laws and courts enable businesses operating within U.S. jurisdictions to protect their proprietary knowledge from unauthorized transfers. Chinese companies, like all foreign companies, would be able to use such protections. As a result, American companies could simply be exposing themselves to deeper Chinese infiltration instead of gaining a true technological edge. Moreover, further tethering U.S. business operations to Chinese entities could exacerbate the industrial, technological, and economic dependencies that the Trump administration has been trying to unravel.

Others might assert that excluding China is merely a shield for uncompetitive American manufacturers and that they can only get stronger if forced to compete with Chinese firms. But American manufactures are not shielded from all competition. They already compete fiercely with companies from Japan, South Korea, and Germany, which have formidable manufacturing cultures and capabilities. In addition, as noted, competition with China is not on a level playing field.

The United States can’t afford to lose its edge at the increasingly important cross section of data, technology, and advanced manufacturing, especially since it is foundational to so many other competitive arenas, from defense to energy to AI. Rebuilding American manufacturing is urgent. But it should not involve inviting America’s principal rival into the systems on which future military and economic power will depend.

DARYL WIELAND is Senior Director of Partnerships at Palantir and an Adjunct Professor of Finance at George Mason University.

On February 24, 2022, Russia launched the largest land invasion in Europe since World War II. The prevailing consensus expected Ukraine to fold in seventy-two hours. Russian generals were killed at a rate suggesting their communications were compromised from the opening days. The Moskva, flagship of the Black Sea Fleet, was sunk by Ukrainian Neptune missiles operating on targeting intelligence that Ukraine likely didn’t develop alone.

The Ukrainians stood and fought. This was possible because of trust deposits made consistently and mostly invisibly in the eight years before Russia’s invasion.

After the Maidan revolution in 2014, Western intelligence services began a sustained program of advising, training, and critically, sharing with their Ukrainian counterparts. They developed sources, methods, assessments, and institutional intimacy that comes from working through hard problems together over time. Western advisors embedded with Ukrainian units and ran joint exercises. They shared intelligence as an operating norm. The trust account was funded piecemeal, slowly but surely. The dividend was paid in the speed and precision of Ukraine’s early defense. By the time the first Russian columns crossed the border, the trust already existed.

That is the model for a true partnership. That is the bedrock it rests upon.

What Trust is Made Of

In their book The Trusted Advisor, Maister, Green, and Galford argue that trust is a combination of credibility, reliability, and intimacy. All three are undermined when people focus too much on themselves instead of on their potential partners. They were writing about client relationships, but the framework maps cleanly onto every partnership I’ve seen succeed or fail.

Credibility is whether I believe you know what you’re talking about. Reliability is whether you’ve done what you said you’d do, repeatedly, over time. Intimacy is whether I believe you can hold sensitive information: my fears, my failures, and my strategic uncertainties without weaponizing them. And self-orientation is the degree to which everything you do is ultimately about you.

Self-orientation is where most partnerships die.

Every day I see “partners” who are credible and reliable but have high self-orientation. The advice that conveniently aligns with their product roadmap. The consultant who identifies a problem that requires six more months of consulting to resolve. Self-orientation is the sand in the gearbox of every working relationship, and it grinds the teeth of the gears as the stakes get higher.

Character is Revealed, Not Trained

The Prussian concept of Auftragstaktik is built on the premise that trust can substitute for control. Give a subordinate the commander’s intent, not the instruction. Trust him to use his judgment and even improvise when circumstances change. But a self-oriented subordinate given mission-type autonomy is not an asset; rather he is a liability who will optimize for his own narrow goals and call it “professional judgment.”

The Western advisory effort in Ukraine functioned on the same logic. Advisors built the institutional capacity for Ukrainians to decide faster and better. The advisor’s job was to help the Ukrainians learn to use that capacity themselves instead of relying on Western decision-making. By February 2022, they had.

The Ukrainians demonstrated the character and competence to persevere. Both character and competence are necessary, but they are not of equal value. An incompetent partner with high character can be developed. An extraordinarily competent partner with low character is a trap.

It takes more than a kickoff meeting to establish trust. It tends to be established in uncomfortable moments. For example, finishing up the deliverable before midnight because the deadline mattered or telling the difficult truth when a comfortable omission was available. One failure can cancel multiple exemplary performances in the psychological ledger of trust. If I cannot predict your behavior under pressure, I will stop depending on you when the stakes matter.

Character is what makes intimacy possible, because you can’t be strategically vulnerable with someone whose character you can’t trust.

The Vulnerability Threshold

I share with account teams all the time that if you partner with someone who has the same capabilities as you, acts like you, and has the same experience as you, it is unlikely to end well. You will trip all over each other as you both have the same strengths. You will also continue to have capability gaps. Rather, a thorough make/buy/ally analysis where you decide what to build yourself, what to purchase, and what to pursue through partnership is critical in defining the partner who fills your capability gaps. This probably means the partner has a different set of experiences. Likely they approach the problem from a different point of view. This will be uncomfortable and confusing at times. It can also get you to places that you can’t get to on your own.

Successful partnerships require vulnerability. You need to allow a partner to see the constraints you are operating under, the strategic bets that might not pay off, and the fears you carry into every major decision. Most partnerships mistake lavish dinners or offsite team building events for intimacy, but these social experiences can’t be weaponized because there is nothing at risk.

Strategic intimacy is different. It is letting a partner see the thing you’re most afraid won’t work. The first move is always unilateral. You share before you know if it will be reciprocated.

This is exactly what happened with Ukraine. Early in the post-2014 period, Western partners had to make a judgment call about whether they should share sensitive collection methods with a country whose own institutions were still being reformed, knowing that a single compromise could put sources at risk across an entire theater. They shared anyway, deliberately. The Ukrainians reciprocated by protecting what they received, and over time both sides raised the threshold of what they were willing to share. By the time it mattered, intelligence could flow at the speed of operations rather than the speed of bureaucracy.

It takes courage to be vulnerable. It takes low self-orientation to absorb a partner’s vulnerability without exploiting it. Credibility and reliability can produce a functional working relationship. Only intimacy allows a partner to know what you need before you ask.

The Defense Industrial Base: Where Trust Gets Tested

This lesson is as applicable in business as on the battlefield.

The relationship between established defense primes and emerging defense technology companies is, in theory, a natural partnership. Primes have scale, contract vehicles, and knowledge of the Pentagon’s procurement labyrinth. New entrants have speed, innovation, and the willingness to build capabilities the primes can’t or won’t build themselves. Each has what the other needs and yet in practice, there is a high failure rate.

The Valley of Death is real for startups. In the typical prime partnership model, the focus is on securing a single piece of IP or component rather than supporting the company that created it, giving primes little reason to invest in the startup’s broader success.

The pattern is familiar. Through tech scouting, a prime identifies a startup with a compelling capability. There is enthusiasm, an MOU, maybe even a joint demo. Then the startup discovers that the prime’s integration timeline is measured in years. The prime discovers the startup has fourteen employees and no experience in managing a subcontract data requirements list. The MOU gathers dust. The capability gap persists. The prime’s internal antibodies re-emerge arguing that if their engineers were just given the money, they could build it themselves.

The problem is almost always self-orientation. The prime treats the startup as a subcontractor to be managed rather than a partner to be developed. The startup treats the prime as a piggy bank rather than an institution with legitimate constraints.

To do this differently you need to be willing to be vulnerable. This means following through with small commitments such as quickly responding to email, making the promised introduction, and delivering the test environment on time. One of the hardest steps is the honest disclosure of constraints. For a startup, that means transparency about burn rate and the features that aren’t ready yet. For a prime, it means candor about internal politics with the engineering team that affect the partnership decision.

The prime that mentors a startup through its first classified integration by sharing lessons learned, making introductions, providing honest feedback is making the same kind of trust deposits the Western advisors made in Ukraine. When a crisis emerges and the Pentagon needs a capability fielded in months, the prime with a network of partners who are already integrated will deploy while competitors are still negotiating teaming agreements.

Bedrock Takes Time

The Ukrainians built their intelligence partnerships over years of patient and often unglamorous work. They participated in joint exercises that no one heard about. They made institutional reforms that took years to show results. They were willing to be transparent about what they didn’t know. When the crisis came, the bedrock held firm.

Trust is an operational capability. It is built in small deposits and spent in large withdrawals. The question is whether you are willing to start making deposits now before you know what crisis will demand the withdrawal.

GREG LITTLE is a senior counselor at Palantir Technologies.

AARON JAFFE is a deployment strategist at Palantir Technologies.

Operation Epic Fury exposed something most people across the Department of War (DoW) already understand at some level, but rarely say directly: a large portion of what we call “business systems” do not work in the conditions of a real fight.

For years, we’ve operated under a convenient mental model that separates the enterprise into two distinct worlds. On one side are warfighting systems: the ones that find, fix, track, target, engage, and assess. On the other are business systems: the machinery that keeps the institution running (think sustainment, supply chain, finance, human resources, procurement, and acquisition). It’s a clean division; one side wins wars, the other runs the business. But that distinction was always more administrative than real, and Epic Fury made it impossible to ignore.

Business systems are warfighting systems.

When the War Machine Breaks Down

Because Epic Fury was distributed across domains and coordinated through multiple commands, systems were forced to function as one war machine. Decisions depended on data that had to be current, trusted, and immediately usable. There was no pause between operating and sustaining, no buffer where latent systems could catch up. And that’s where the cracks began to show—because for all the progress the Department has made in seeing the enemy, it still struggles to see itself in real time.

Take air-defense interceptors, the multi-million-dollar missiles critical for protecting U.S. forces, facilities, and allies. Data on where interceptors are, what condition they are in, and whether they have been expended is spread across multiple legacy business systems that are not integrated. At any given moment, the Department does not know how many of these critical munitions it has or where they are. Shortly after Epic Fury began, the Department found it could no longer rely on its business systems. It reverted to phone calls, spreadsheets, and paper-based reporting.

Over the past decade, the Department has integrated the kill chain to make the soldiers working in targeting cells one hundred times more effective. During that same time, business systems that support critical functions across the Department have barely evolved. In many ways, they’ve become less integrated, intermediated by data lakes and layers of analytic tools that separate them from the Department’s warfighting mission.

Within a warfighting environment, the Department’s business systems do not provide relevant data that they were designed to track, including: how may aircraft are operational, where units and service members are, and if it has the munitions needed to supports its plans. Operation Epic Fury showed us that the systems that support critical functions—managing personnel, equipment, and munitions—cannot live on a back-office island; they are a subset of warfighting systems that are inextricably linked to the Department’s core mission.

Know the Enemy and Know Yourself

We often talk about the fog of war as something imposed by the enemy—something external that obscures clarity and complicates decision-making. Epic Fury suggests something different: that a meaningful portion of that fog is self-inflicted.

Sun Tzu’s maxim to “know the enemy and know yourself” is oft-repeated but rarely interrogated. We have spent decades investing in the first half of that equation. Our ability to sense, track, and understand adversary behavior has improved dramatically. But our ability to understand our own posture—our true readiness, our real constraints, our capacity to act—lags behind.

You can see this most clearly when you imagine the moment of decision. A commander is planning a strike package. The target data is current. The threat environment is continuously updated. Weather inputs are live. That entire side of the equation has been engineered for speed and precision. But when attention turns inward, the picture degrades. Munitions data trails reality. Fuel status reflects yesterday’s conditions. Maintenance readiness is fragmented across systems. Everything about the enemy is immediate; everything about ourselves is historical.

The discrepancy between how we fight and how we understand our ability to fight is a direct result of the fragmented way we designed our systems. Conway’s Law has shaped the Department more than any formal architecture. Systems mirror the structures that build them, so we ended up with Army systems, Navy systems, and Air Force systems, as well as logistics systems, financial systems, and personnel systems. Each system is aligned to its organizational owner, optimized for its specific function, and evolves on its own timeline. That approach made sense when coordination happened through meetings and staff processes and forces were sustained by nearby stockpiles of materiel. It does not hold in a world where decisions are distributed, timelines are compressed, supply chains stretch across continents, and outcomes depend on the seamless interaction of all parts of the enterprise.

What Epic Fury underscores is that the need for speed is no longer confined to warfighting systems. The Department largely has the data it needs, but it lacks the ability to act on it. Many of the systems that underpin readiness continue to operate on timelines measured in days or weeks. Systems that require manual intervention at every step are fundamentally misaligned with the speed of modern operations. Attempting to compensate with dashboards and reporting layers has not resolved this mismatch. If anything, it has made it more tolerable by providing an acceptable level of visibility during peace time—allowing programs to claim progress that’s “good enough.” Storing and displaying information is too low of a bar. Critical systems must participate in operations, translating data into warfighting decisions.

This leads to an obvious conclusion: if a system does not function in a warfighting context, it does not function for the Department of War. Compliance, reporting, and even efficiency are poor proxies for the true objective: fight and win. Systems that cannot support that objective under realistic conditions are liabilities.

Fight and Win

The separation between business systems and warfighting systems is an artifact of the past and now a critical risk in the present. This is a problem that requires a solution more fundamental than “modernization” in the traditional sense. Instead it requires a shift in how these systems are conceived, built, and evaluated.

They must be tied directly to mission outcomes, fully integrated into warfighting platforms, and exercised in conditions that resemble real operations. They must be designed to operate at the speed of the fight, not the speed of administrative process. Like warfighting systems, they must speed the integration of AI to accelerate and improve decision making. They must provide a continuous, accurate understanding of our own posture—because without that, every other advantage begins to erode.

There is no longer a meaningful distinction between the systems that run the business and the systems that fight the war. There is only the war machine itself, and in the end, it either enables the mission—or it does not.

KEN BIBERAJ is the host of Coffee with Ken and advises advanced manufacturing and defense companies on site selection and industrial strategy.

A few weeks ago, I sat across from Madeline Hart—co-author of Mobilize: How to Reboot the American Industrial Base and Stop World War III—at the inaugural Coffee with Ken Summit just outside D.C. There were 300 people in the room: senior officials from DoW, DOT, and DOE; aerospace and defense industry leaders; builders, investors, and operators who are all trying to figure out the same thing. How do we actually do this? How do we take the national will to reindustrialize and turn it into factories on the ground?

It’s clear that the will to mobilize is there. The capital is there. The companies are ready to build. But they keep running into the same wall.

From my perspective as a real estate site selector, that wall isn’t in Washington. It’s in the fifty states that control every piece of land, every power line, every permit, and every zoning decision that determines whether a factory gets built. Mobilize is a book about the national will to build. This is an essay about who is responsible for the execution once that will exists.

For Once, Don’t Blame the Swamp

Washington cannot rezone a county. It cannot accelerate a permitting process administered by a state environmental agency. It cannot extend a water line, upgrade a substation, or entitle 3,000 acres for an advanced manufacturing campus. It cannot override local opposition to an industrial facility or build the workforce pipeline that makes a facility viable for the next thirty years.

All of that—every single element that determines whether a site is shovel-ready and ribbon-worthy—is controlled at the state and local level. I advise advanced manufacturing and defense companies on where to locate, and I watch this dynamic play out in real time across the country.

The gap between federal ambition and state execution is a billable problem that I make a living working to navigate. When a site timeline slips by two years because a state agency couldn’t coordinate a utility extension with a permitting office, it is a capacity failure three levels down, in a building most people in DC have never heard of.

The states that understand this are pulling away. The states that don’t are losing deals they don’t even know they’re losing.

The Incentive Playbook is Outdated

For forty years, economic development has run on a simple formula: recruit a company, offer a tax abatement, cut a ribbon, issue a press release. Cash grants. Job creation credits. Maybe some workforce training dollars thrown in. It was as simple as plugging some variables into an Excel model.

That model worked well enough for a world of conventional manufacturing and distribution facilities. It does not work for the AI-powered factories of the future.

A gigafactory doesn’t need a tax credit. It needs a fully entitled site with rail access, 300-plus megawatts of dedicated power, a water supply commitment, and a permitting timeline that won’t slip three years into the project because of a challenged environmental review. An advanced semiconductor fab needs a workforce pipeline that doesn’t exist yet, a supply chain ecosystem in the same region, and a state government sophisticated enough to coordinate across a dozen agencies without dropping the ball.

Most state economic development agencies are not built to deliver any of that. They are built to process incentive applications for Fortune 200 companies and host trade missions. Those are not the same thing, and companies building the next generation of American manufacturing know the difference immediately. This new group of innovators is venture backed, moves fast, and did not exist three to five years ago. States have a hard time understanding these companies, much less underwriting them.

The Data Center Tradeoff

There is a specific distortion worth naming: the data center.

Over the last decade, states quietly became addicted to data center investment. The deals were easy and involved minimal permitting complexity relative to capital intensity. In turn, these capital-intensive projects looked great in press releases. The problem is they consumed enormous amounts of power and land, and generated almost no employment density per acre or per megawatt.

Now, as manufacturing companies come looking for megawatts and sites, they are finding grid capacity already committed, the best industrial land absorbed, and incentive budgets exhausted on facilities that will never produce a meaningful number of jobs. It is hard to blame states entirely—they didn’t have a national industrial policy framework to tell them what they were trading away. But the tradeoff is real, and it is biting.

I raised this at a conference not long ago. I mentioned that the president’s national security strategy explicitly calls for reindustrialization, and I asked the room full of state and local economic development officers what they were doing to meet that national security need. The blank stares didn’t go unnoticed. Dozens came up afterward asking what they were supposed to be doing.

To be fair, the data center debate is not black and white. AI-powered factories will require data centers, even while they compete with traditional industrial investment for skilled labor, land, and resources.

These complex decisions will be made in the zoning boards and utility commissions and permitting offices of fifty states that were never told they are the execution layer of a national mobilization. We are trying to run a World War II-scale industrial build-up through a system that doesn’t know it’s at war.

What Good Looks Like

I travel this country constantly—not to attend conferences, but to sit down, have real conversations, and learn what’s actually happening on the ground floor of reindustrialization. What I find is genuinely encouraging. There are communities doing this right, but they aren’t getting nearly enough attention.

Cleveland is one of them. The city-backed Site Readiness Fund has done something most cities talk about but never do: acquire hundreds of acres of real estate. Cleveland is now doing the hard, patient work of taking those sites to market—determining what industries they are positioned to support, reducing upfront costs for companies, and building the infrastructure that makes a site real rather than just a promise on a map. That is exactly the kind of institutional investment that changes a community’s competitive position by putting it on a path to have factories up and running inside of three years.

Huntsville might be my favorite example. Yes, they have more PhDs per capita than almost anywhere in America. Yes, they landed Space Force. Yes, the innovation ecosystem there is genuinely world-class. But what actually makes Huntsville work is simpler than any of that: an accessible, hands-on mayor; housing being built at a pace that matches demand; and a community culture that feels alive. I went back with two of my sons for Space Camp a few years ago. When a city is good enough that you bring your kids back on vacation, they’re doing something right.

Then there’s Tulsa, which honestly shocked me. I didn’t know what to expect. What I found was a community that has figured out how to get the public sector, private sector, and philanthropic sector to work together. A lot of that connective tissue runs through the George Kaiser Family Foundation, which has woven together the kind of cross-sector partnerships that speed up market access and reduce uncertainty for companies.

And Pittsburgh. I dragged my family there for summer vacation last year. We put the kids in robotics camp at Carnegie Mellon and visited more museums than we did on a trip to Paris. But the story that really gets me is the city’s Hazelwood Green project. Tishman Speyer is transforming the former Jones and Laughlin Steel site—one of the most heavily guarded industrial facilities in America during World War II—into a mixed-use innovation district anchored by Carnegie Mellon’s robotics program and the Pittsburgh Steelers. The most important steel site in the American war effort is becoming the address for American robotics. That’s a blueprint for what reindustrialization can look like when a community puts manufacturing at the forefront.

What States Need to Do

The path forward is not complicated in theory:

Invest in sites before companies show up. The single greatest competitive advantage a state can offer is a development-ready industrial site: entitled, powered, watered, and connected. This requires capital investment without a guaranteed return and a multi-year time horizon that is politically uncomfortable. Cleveland is doing it. A handful of others are doing it. They are winning deals that the rest of the field doesn’t even know they’re losing.

Reduce the upfront cost and risk of locating a facility. Companies deciding where to build right now are choosing based on execution certainty more than incentive packages. A state that can credibly commit to a twelve-month permitting timeline, a shovel-ready site, and a coordinated infrastructure delivery is worth more than a state with a bigger tax credit and an uncertain timeline.

Stop competing on incentive volume and start competing on ecosystem fit. The most durable manufacturing investments are embedded. A company that builds where it fits the regional talent pool, the supply chain geography, and the workforce culture will be there in thirty years. A company that came for the abatement will leave when a competitor state offers a better deal. Tulsa gets this. Huntsville gets this. Most states are still chasing every RFP that crosses their desk regardless of fit.

Build real institutional capacity to execute. This means dedicated project management infrastructure inside government—a team that manages complex projects across agencies and drives them to completion instead of merely processing applications. Pre-negotiated utility agreements. Pre-cleared environmental frameworks for defined industrial zones. A single point of accountability. The difference between a state that can execute and one that can’t is almost never about intent. It’s about the organizational infrastructure to follow through.

And stop giving all the land and power to data centers without an industrial strategy that explains why.

The National Stakes

The premise behind every dollar of federal money committed to industrial policy is that the United States must rebuild its capacity to produce what national security and economic resilience require, from semiconductors to batteries.

This battle will be won or lost in unexpected places like county commission meetings, state utility commission hearings, and permitting offices currently staffed for a quieter era. The adversaries we are competing with do not face those constraints. They build what they decide to build, where they decide to build it, on the timeline they set. Meanwhile, we route major industrial investments through a multi-year permitting gauntlet with unpredictable outcomes and call it a free market.

The federal government has begun working to open federal land for data centers to meet AI demand, which is a start, but a similar strategy should be put in place for broader advanced manufacturing. As a site selector, I push my contacts in DC constantly for better access to federal sites, and the bureaucratic friction is real. If reindustrialization is really a national security concern, our site selection should not be limited to what states offer and private owners are willing to sell. More of the federal estate should be accessible for this mobilization effort.

We need to be able to build fast, pivot fast, and upgrade fast. Right now, our states—the organizations that control the land where those factories go—are not structured for that tempo. We need a real industrial policy. Not a collection of federal funding programs, but a genuine alignment of national goals with the state-level execution mechanisms that determine whether those goals are achievable. That means treating state economic development capacity as a national security asset and investing in it accordingly. It means governors willing to restructure agencies, allocate capital to site preparation, and make long-term bets that don’t pay off until the next administration.

One More Thing

I’m optimistic about America because of the time I spend on the road in places like Cleveland, watching a city invest in its own industrial future. And Huntsville, where a mayor who picks up the phone has helped build one of the most dynamic innovation ecosystems in the country. And Tulsa, where I watched public officials, foundation leaders, and private investors finish each other’s sentences because they had been in the same room long enough to understand each other. And Pittsburgh, watching my kids learn to code robots in a building two miles from where American steel won a world war.

These places are proof that rebuilding is possible. The question is whether the rest of the country—and the state and local institutions that hold the keys to reindustrialization—will move fast enough to join them.

Who will build the arsenal of the future? Storied, legacy defense manufacturers? Buzzy, VC-backed startups? Firms and founders yet unknown?

This is a hot topic in Washington and other hubs of power. Many careers and many billions of dollars hinge on the answers—not to mention many lives.

And so the question provokes passionate reactions. Armin Papperger, chief executive of the German defense firm Rheinmetall, issued a salvo on behalf of the legacy defense firms earlier this year. He criticized small defense manufacturers in Ukraine, which are producing waves of lightning-fast drones to patrol the front line and intercept incoming attacks. These manufacturers are "play[ing] with Legos," he told The Atlantic’s Simon Shuster. Their factories were staffed by "Ukrainian housewives" with "3-D printers in the kitchen." "This is not innovation," he concluded with Teutonic bluntness.

The response was swift and merciless. Volodymyr Zelenskyy quipped that "if every Ukrainian housewife can really produce drones, then every Ukrainian housewife could also be the CEO of Rheinmetall." Wags on X designed patches for a fictitious "17th Housewife Drone Regiment." Rheinmetall quietly issued a clarification praising "the innovative strength and the fighting spirit of the Ukrainian people."

Papperger’s outburst is one salvo in the ongoing cold war between legacy defense manufacturers and new competitors. The implication of his comments is that only established companies (like his) with meticulously tested and validated products can deliver the capabilities that modern war demands.

This claim shouldn’t be dismissed outright. After all, the war in Ukraine is not merely a war of drones and AI; it is also a war of armor and artillery, the very things built by companies like Rheinmetall. Other recent fights have been even more lopsided in favor of legacy companies and their products. It wasn’t startups that supplied America’s military actions in Venezuela and Iran. It was Black Hawk helicopters that ferried the Delta Force to Nicolas Maduro’s compound, F-35s and Tomahawk cruise missiles that battered the IRGC, and Patriot and THAAD batteries that protected our troops and allies from Iranian missiles. Novel capabilities made appearances, but they were supporting players rather than leads. Western militaries still rely heavily on the exquisite systems provided solely by legacy defense firms. They will for years to come.

Behind Papperger’s bravado, however, one senses the unease of a buggy whip maker who has seen a horseless carriage chugging around the bend.

Legacy defense companies are more vulnerable perhaps than they have ever been because they have no good answer to the central dilemma that we in the West face: our weapons are expensive and scarce, while our enemies’ weapons are cheap and plentiful. In all but the briefest and most lopsided campaigns, our side burns through its stockpiles of high-end munitions and interceptors faster than it can replace them. Our enemies are counting on it.

We have known this for years, but the roughly month-long campaign against Iran made the problem impossible to wish away. The United States and its allies expended enormous quantities of precision interceptors and stand-off missiles—systems that cost hundreds of thousands to millions of dollars apiece, built by legacy defense companies. They worked. (For the price, they should.) But there simply are not enough of them.

The Center for Strategic and International Studies estimates that the U.S. military expended roughly one-third of its Tomahawk cruise missiles, one-fourth of its JASSMs, and more than one-half of its Patriot and THAAD ballistic-missile interceptors. The lead time to replace those munitions is measured in years, creating a conspicuous window of opportunity for our adversaries.

This dawning reality has set off a mad scramble to rearm—and to find alternatives to existing systems—which is both opportunity and threat for legacy defense firms. The president’s $1.5 trillion defense budget includes tens of billions of dollars for new exquisite missiles and missile interceptors. But it also invests heavily in cheaper alternatives, potentially circumventing the legacy defense complex altogether. The buzz word of the moment is “attritible mass,” a phrase that translates roughly to “lots of weapons, at a lot lower price.”

So suddenly, legacy defense firms face the prospect of serious competition against dozens of “housewives” for defense funding and contracts. And they are starting to feel the heat.

The Secretary of War released a video that vividly illustrates the new reality of defense contracting. He stated that the Pentagon is prepared to offer steady, long-term contracts to refill its arsenal, but it expects legacy defense manufacturers to invest in new factories using their own money, to boost output of key munitions, and to hold prices steady. “If they fail to deliver,” the secretary warned, “we will hold them accountable and bring in new companies who will.” The video depicts legacy manufacturers as paunchy older men in pinstriped suits and the new entrants as jocular tech bros in vests.

Acquisition dollars are beginning to shift to new entrants. The Department of War recently announced agreements with four defense companies, including Anduril, to supply 10,000 low-cost, containerized cruise missiles over the next three years. It reached a similar agreement with Castelion to supply at least 1,000 hypersonic missiles. The Pentagon’s press release boasted that every company involved is a new entrant. No primes allowed.

And although it is still early days, new entrants’ weapons are already proving their mettle on the battlefield and the test range.

Ukraine’s war of national survival has proven an excellent incubator and proving ground for new defense firms. A few short years ago, Papperger wasn’t entirely wrong: Ukraine did indeed rely on homemade drones made in the military equivalent of cottage industry, to the point that it launched a “People’s FPV” initiative to train non-technical workers in the relevant skills. Now the industry has matured through a combination of bottom-up innovation and top-down support from programs like BRAVE1, a government-backed effort to nurture and coordinate the country’s startups. According to the Snake Island Institute, Ukraine’s defense tech ecosystem grew since Russia’s invasion from roughly a dozen companies to more than 1,500. These companies have enabled Ukraine to scale its domestic drone production from roughly 3,000 annually at the war’s beginning to an astounding 5 million per year today.

Now the most successful of these firms are raising private capital, hungrily eyeing the broader global defense market—and dominating head-to-head trials. The housewives have learned a thing or two about what works and what doesn’t from four years of existential warfare. Increasingly they are winning on quantity and quality, as the proximity of producers and front-line operators creates a rapid feedback loop for improvement.

The products of these new entrants are already popping up in Western military service. In recent Congressional testimony, Army Secretary Dan Driscoll lauded the Merops—a small, inexpensive interceptor drone developed by an American company and battle-tested in Ukraine—as a breakthrough solution to shooting down Iranian drones in the Middle East. Scarcely a week into Operation Epic Fury, the Army purchased 13,000 Merops at roughly $15,000 apiece. At scale, the price is expected to drop below $10,000. The drones are being used to knock down Shaheds that cost $30,000 to $50,000 each, putting the United States—for once—on the right side of the cost curve.

All of this is real competition, and it is forcing legacy firms to adapt in several ways. Since the start of Epic Fury, prime contractors have reportedly agreed to triple or even quadruple production of key munitions and interceptors. They are racing to modernize antiquated factories and manufacturing processes, bringing 21st-century technology to lines stuck in the past.

They are also trying to develop their own answer to attritible mass, from small drones to affordable cruise missiles. One especially ironic example from Europe: late last year, Rheinmetall expanded its offerings of small kamikaze drone. "Lego"-like drones may not be Papperger's idea of innovation, but it seems they will play a role in the future even of his company.

So who will win this high-stakes, high-dollar contest for the future of the Western arsenal? The answer may not be a clean either/or. Western militaries clearly need a mix of high-end systems for range and precision and low-end systems for endurance. But in each segment of the market, the firms that win will have to earn it through speed, the ability to iterate, and the ability to ship product in the quantities and at the price point that Western governments demand.

The firms that succeed in this new paradigm will be the ones that channel their inner housewife.

DOMINIC VENTIMIGLIA and JARRETT LANE were teammates in the Middle East over ten years ago. Dom retired from the U.S. Army Special Forces as a Chief Warrant Officer 5 and is now a Principal at Squadra Ventures. Jarrett is Chair and Co-Founder of the N.C. Critical Technologies Alliance.

At the height of the war with Iran, the regime systematically struck U.S. military radars, communications infrastructure, air-defense systems, and other assets across the Middle East with low-cost drones — basically cheap missiles and flying improvised explosive devices. Seemingly surprised by the Iranians’ response, the U.S. military moved THAAD systems and Patriot batteries from the Indo-Pacific into the Middle East to guard against these relentless drone attacks. The United States and its partners in the region quickly depleted their supplies of expensive, hard-to-produce munitions to shoot down cheap Iranian drones.

A common refrain at the moment is that the U.S. military failed to learn lessons from the Russia-Ukraine war, as if drones did not emerge as a real threat until the last four years. It is hard to excuse the Department’s slow reaction to the innovations in drone warfare the world has witnessed since the Russia-Ukraine war started in 2022. However, focusing on the failures to learn from Ukraine actually gives the Department too much benefit of the doubt.

In reality, commercial, improvised, and low-cost kamikaze drones were a known threat long before Russia and Ukraine began using them. Iran has prioritized its drone program as a core component of its asymmetric military strategy since at least the 1980s. The Shahed has been part of Iran’s drone fleet since 2012, and Iran has used kamikaze drones since at least 2015. ISIS weaponized commercial drones across the Middle East, including against U.S. forces.

While assigned to the U.S. Central Command between 2015 and 2017, we saw first-hand the threats drones posed to U.S. servicemembers and critical assets across the Middle East. Our mission was to simulate attacks by adversarial special operations elements to test the security and resilience of U.S. military installations and critical infrastructure. We applied known and emergent adversarial tactics and imagined potential new tactics to identify courses of action that an enemy might realistically pursue. Drones quickly became one of our go-to tools.

Unfortunately, many were slow to appreciate the threat this new tool posed. In our experience, the idea of using cheap drones to degrade or dismantle critical capabilities was typically met with one of three responses. The first was incredulity. To some, drone attacks posed a nominal force protection problem because they were crude and usually unsuccessful. There was little appreciation that new forms of warfare usually begin crudely. The second response was dismissal. Drones could be easily dealt with by shooting them down or taking out the operators. The third response was acknowledgement that drones were a problem—but that they were somebody else’s problem to solve.

To be clear, our experience was not unique. We are far from the only people who anticipated the drone threat and called attention to it. At the time, the Joint Improvised-Threat Defeat Organization, or “JIDO,” which operated under the Defense Threat Reduction Agency, was working with “a sense of urgency” to field counter-UAS capabilities.

And yet, here we are: Iran successfully targeted the backbone of the U.S. military’s operational capabilities across the Middle East. As Iran moved up its escalation ladder, commercially-owned infrastructure that the U.S. military may use in the region was also targeted. Though more Iranian drones have been intercepted than not, as one outlet reported, the number of successful drone strikes on U.S. military assets and infrastructure reveals “a pattern of inadequate protection for strategic locations.” The U.S. military’s unpreparedness is particularly troubling when one considers that Iran’s response represents just a fraction of what China could employ to disrupt and degrade mission-essential capabilities.

Such unpreparedness is not just an operational failure; it is the symptom of systemic breakdowns in policy, process, and programs that should be helping the Department get ahead of threats and field appropriate solutions. While fielding counter-UAS solutions is critical, addressing the systemic challenges must be done, too, for the Department to not get caught flat-footed by new threats again. Drawing from our own experience, we have a few recommendations to offer and thoughts on what else is to come.

Feedback loops from rigorous exercises and red teaming can help the Department foresee threats and proactively develop solutions.

The wars in Ukraine and Iran should create a sense of urgency within the Department to build, scale, and institutionalize mechanisms to identify new threats from the tactical edge, rapidly iterate solutions, and push them into the field. These mechanisms should extend beyond just capturing lessons from troops in contact. Exercises that meaningfully stress-test operational proficiency, resilience, and adaptability — as opposed to running exercises focused on relationships and posturing — can help expose weaknesses and threats. Those exercises must also be integrated with acquisition processes. An after-action report isn’t good enough — senior leaders almost never read them. Acquisition executives and technical experts should take a front-row seat as observers in these exercises to see for themselves the problems that need solving. First-hand understanding can help leaders drive top-down decisions through the Pentagon’s bureaucracy about how to get ahead of emerging requirements and threats.

The Department should also revitalize and expand red-teaming functions to expose vulnerabilities in multiple domains. One hub of such activity, the Army’s Asymmetric Warfare Group (AWG), was shuttered in 2021 despite its successes. The AWG provided advice and support to Army commanders at the tactical and operational levels. It was celebrated for its work developing solutions to threats like IEDs. The AWG was geared more for the age of counterterrorism than great-power competition. Yet the decision to close the AWG instead of updating its mission implies an assumption that countries like China and Russia would not wage asymmetric warfare against the United States and our allies and partners. This assumption could not be more wrong.

The wars in Ukraine and Iran show that dismantling the AWG was a mistake. Further, asymmetric warfare isn’t just kinetic: China and Russia are doubling down on other methods, including cognitive warfare, precisely because of its asymmetric advantages. To the authors’ knowledge, nothing has functionally replaced the AWG. The Department should reconstitute the AWG, or some variation of it, with a remit that reflects the fact that asymmetric warfare is not just the tool of violent extremists; it’s an increasingly sophisticated, multi-dimensional discipline used daily by our most capable adversaries.

Further, the multi-domain nature of asymmetric threats from our adversaries requires a joint perspective, not just solutions through the lens of one Service. The Department should also think anew about how to use red teaming to map and understand interdependencies of critical assets and networks — military and commercial alike — so it can make informed investments into protection measures and build the redundancy needed for the modern threat environment.

The qualities and experience of the personnel that comprise a joint AWG 2.0, or similar red-teaming functions, are essential to the organizations’ efficacy. The teams should be capable of thinking creatively and should be empowered to do so. They should draw on skill sets from special operations, the intelligence community, social engineering (e.g., social media expertise), and engineering and product development (e.g., rapid prototyping).

Finally, as with exercises, robust feedback loops are foundational to the red teams’ ultimate success. For the Department to gain real value out of red-teaming activities, feedback loops must inform institutional learning and strategic decision-making. Learnings should not just inform protection measures or tactics at the unit, installation, or theater level. Rather, learnings need to translate into new resources, updated theater and global-level contingency plans, and even training and doctrinal revisions.

One potential approach to bridge the gap between red teams’ operational and tactical learnings and strategic decisionmaking is to directly involve elements of the Office of the Secretary of Defense (e.g., Strategy, Plans, and Forces) or the Joint Staff. For example, OSD or the Joint Staff could provide direction on what vulnerabilities they want tested. They could also be the primary consumers of red teaming results.

Translating learning from partners and technical experts into action will be critical to stay ahead of future threats.

Despite Ukrainians’ clear expertise in drone production, drone operations, and counter-drone capabilities, the U.S. government was slow to accept help from Ukraine, even as Iranian drones began striking assets across the Middle East. The United States ultimately made the right call by welcoming Ukrainian drone experts to help protect military bases in the Middle East. These sorts of cooperative efforts and knowledge exchanges should be encouraged going forward. Learning from allies and partners — especially those with first-hand experience of new threats, technologies, and tactics — will be crucial for the U.S. military to stay ahead of emergent challenges.

Ongoing changes to the Department’s security cooperation enterprise present an opportunity to improve our own learning from allies and partners. Aligning the Defense Security Cooperation Agency—the organization responsible for arms transfers—to the Undersecretary of Defense for Acquisition and Sustainment could create a clearer through-line for learnings from allies and partners to the Department’s acquisition leadership.

The Department should also send teams to interface with allies and partners explicitly for the purpose of gleaning and exchanging lessons learned. To date, very few personnel have been assigned to systematically learn from Ukraine. U.S. military personnel assigned to embassies have an important role to play in helping facilitate learning from allies and partners, but these personnel are already task saturated promoting weapons sales, facilitating combined training, and more.

Drones abroad are just the start. The United States is vulnerable at home and new threats are rapidly emerging.

Drone threats will continue to spread and intensify. Without serious attention to domestic counter-UAS policies and solutions, the United States remains vulnerable to an Operation Spiderweb-esque event here at home. A recent incident in which waves of jam-resistant drones reportedly flew over Barksdale Air Force base show just how far the government still has to go in developing a coherent counter-drone strategy and response options.

The threat is not just purpose-built military drones. Commercial off-the-shelf drones and drones custom-built with commercial components pose a serious danger, too. For example, Houthis are using commercial micro-jet engines to build fast drones with significant range. And drones are just one example of how commercially available technologies pose a serious threat.

While the Department is still adjusting to using commercial off-the-shelf solutions, adversaries, violent extremist organizations, and criminal groups are using them with greater and greater effect. Electronic warfare technologies are increasingly available on the open market. Criminal organizations are already using signal scramblers and GPS jammers to disrupt law-enforcement communications. For a few hundred dollars, just about anybody can buy the necessary parts to build a crude anti-aircraft missile or shoulder-fired rocket. Autonomous and semi-autonomous systems, including robotics and maritime systems, will increasingly threaten U.S. military personnel and assets, as well as commercial infrastructure like ports, power generation, and oil and gas. Biological threats, including weapons concocted in illegal labs here in the United States, could be used to infect human populations or agriculture.

Artificial intelligence will amplify the threat by making the production and coordination of these technologies easier. For example, consider human-machine integration. Imagine human operators seamlessly interfacing with swarms of drones and robotic systems — commanded with nothing more than thought — using widely-available technologies. It sounds like science fiction, but it is coming. Three years ago, the IEEE published an article covering how the costs of “open-source neuroscience hardware” are coming down. Expect that trend to continue.

Sticking with human-machine integration as an example, the Department should be collaborating with technical experts in startups and universities to red-team scrappy human-machine systems built using only commercial off-the-shelf and open-source technologies. Operational experts in the special operations community, for instance, can apply their know-how to imagine new types of complex attacks or battlefield awareness systems.

The Department should learn from its drone failures to avoid future surprises.

The ultimate lesson is not simply about drones. It is about a system that struggles to recognize, prioritize, and act on emerging threats before they scale. Fixing that system, not just fielding the next countermeasure, is what will determine whether the United States can compete in an era defined by rapid, asymmetric innovation. Re-investing in teams and programs to forecast future threats and, most importantly, listening to and acting on the expertise of others, can go a long way toward making sure the Department isn’t caught flat-footed by the next threat.

The next disruption is already taking shape; it will not wait for us to catch up.

We often default to a particular version of World War II. It’s the one everyone knows: D-Day, carrier battles in the Pacific, armored divisions pushing across Europe. It’s a story about tactics and decisive moments. The Band of Brothers war, you could call it.

But a lot of the war was decided somewhere else entirely. In places like Detroit and Pittsburgh, production lines ran around the clock and output became the limiting factor of what was possible on the battlefield. It was factories that determined the pace and scale of the fight.

When Franklin D. Roosevelt called the United States the “Arsenal of Democracy,” he was describing how the system actually worked. Combat power started in the factory and manifested on the battlefield. We understood that then. We don’t operate that way now.

Today, the conversation is centered on command and control decision advantage—how quickly we can move from sensing to decision to action. Systems like CJADC2 are built around that idea, emphasizing faster decisions, tighter OODA loops, and more connected forces. That matters, but in today’s word it’s not the constraint most people think it is. Just look at CENTCOM, which has executed over a thousand targets a day in Operation Epic Fury.

The constraint is production, and you can see it in how we fight today. It’s entirely possible to have a good operational picture and still not have a clear answer to basic questions like: how many munitions do we have ready right now? How many munitions can we produce? The data exists, but it’s spread across systems, updated on different timelines, and owned by different organizations. Instead of seeing the answer, we assemble it, which slows everything down in ways that only become clear in the fog of war.

One part of the system moves at machine speed, while another part moves at human speed. We’ve built a very good kill chain, but we haven’t built the equivalent system for production and sustainment. Once the opening phase passes, the question changes from who can strike first to who can keep going—who can replace what they use, shift production, and absorb disruption.

Enter WAR MACHINE

The solution is to build a system that enables real visibility and control of defense industrial supply chains and production. We call this WAR MACHINE. It’s not a program or a piece of software, but a way of looking at the system as a whole. The factory, the suppliers, the depots, the logistics network, and the units using the equipment are all part of the same system. When one part slows down or breaks, the machine doesn’t work as it should.

Right now, those parts don’t operate as one system. The primes have their own view, sub-tier suppliers have another, and the government has a third. Each one sees a slice, but no one sees the whole picture in real time, which makes it difficult to answer straightforward questions about constraints, bottlenecks, and spikes in demand.

It also changes the dynamic between the Department and industry. Rather than wield the industrial base, the Department is at its mercy. The DoW often has less visibility into a given program’s supply chain than industry. That’s an unacceptable status quo during peacetime, and it becomes existential during a conflict. It’s ironic that the DoW requires defense contractors to open up their books and comply with Cost Accounting Standards so auditors can pore over pennies, yet it does not apply the same scrutiny to the area that would really make a difference: production. Visibility into a weapon system’s production should be a requirement, just like payload capacity, range, or accuracy.

You hear the pushback on this proposal almost immediately: the Department shouldn’t have this level of visibility into industry, lest it overreach and cross a line into controlling how companies operate. Such an argument ignores how competitive hardware products are manufactured in the commercial economy. Apple does not take a laissez faire approach towards its suppliers. Quite the opposite. Apple rear deploys its engineers to all of its suppliers. It’s a similar story with the automotive OEMs and their relationship to the Tier II and Tier III suppliers. It’s helpful to think of Apple and the auto companies as the first customers of their products. Demanding factory floor visibility from their suppliers is a matter of customer service. It follows that when the stakes are higher than luxury goods, the DoW should not operate in the dark for life-and-death production runs of artillery.

The reality is that the defense industry’s truculence on this issue is a bit of “the lady doth protest too much.” The defense companies themselves often have poor visibility into their own supply chains and are none too eager to expose such a state to their customer. In turn, suppliers to the defense companies are often reluctant to disclose bad news like parts delays. All the more reason for the DoW to demand more of industry as a forcing function to make the entire industrial base more effective.

There’s a carrot in there for industry as well. Today, companies are often planning production against incomplete or lagging signals from the government—uncertain demand, shifting priorities, and funding volatility all get in the way of making clean decisions. We ask industry to surge, but we don’t give it a clear picture of what “surge” actually means over time. A system that connects the Department to its industrial base would not only give government visibility into supply, it would also give industry visibility into demand, allowing both sides to operate off the same reality instead of two different approximations.

Recent operations make the visibility gap harder to ignore. In Operation Epic Fury, U.S. and partner forces executed one of the most intense strike campaigns in decades, consuming large quantities of precision munitions across multiple systems. The operational side performed exactly as designed—fast, coordinated, and effective. But significant portions of key munitions inventories were depleted, and rebuilding those stockpiles will take years, in some cases.

Innovation in bits advanced faster than atoms, which means awareness and targeting far outpace production capacity. The limiting factor is whether the industrial base can regenerate combat power at the pace the fight demands. The next conflict—especially if it’s in the Indo-Pacific—is unlikely to be a brief exchange. It will be defined by distance, scale, and sustained demand across air, maritime, and missile systems. It will stress supply chains in ways we haven’t experienced ever. It will expose every fragile node, every single-source dependency, and every place where production can’t keep up.

Industrial Power is Combat Power

In World War II, the solution was alignment. The entire system—government, industry, and workforce—moved in the same direction. Arthur Herman’s Freedom's Forge captures how leaders like William S. Knudsen and Henry J. Kaiser coordinated production across companies and supply chains. It wasn’t elegant, but it worked because the factory and the front line were part of the same system.

We’ve seen a version of this play out in the commercial world, as well. In the book American Icon, turnaround CEO Alan Mulally walked into Ford Motor Company when it was close to failure. One of the first things he did was force visibility across the enterprise and into the supply base. Ford soon understood what was happening inside its operations and across its suppliers, issues surfaced early, and leaders could act before problems cascaded. That shift—seeing the system clearly and acting on it—was a big part of what kept Ford from going bankrupt, even while General Motors and Chrysler went under.

This is the shift the Department needs to make. Creating a system that sees itself clearly enough to act transcends building more reports or better dashboards. We must connect production, supply, and sustainment the same way we’ve connected sensors and shooters, so that constraints are visible early and decisions about tradeoffs can be made with a full picture instead of partial views stitched together over time.

The underlying point is straightforward: industrial power is combat power. In a conflict that lasts more than a few weeks, the side that wins is the one that can keep producing, keep adapting, and keep supplying its forces under pressure. The path from factory to foxhole is as much a part of the fight as any kinetic action.

Right now, many still assume the industrial base will keep up, supply chains will hold, and production will surge when the time comes. Operation Epic Fury proved those assumptions false. WAR MACHINE is the system we need to build now if we expect to fight, sustain, and win any future conflict.