News | July 1, 2005

The Changing Landscape of Defense Innovation

By Paul Bracken, Linda Brandt, and Stuart E. Johnson Defense Horizons 47


The Changing Landscape of Defense InnovationOverview

In a rapidly evolving business environment, many successful companies have transformed themselves by reexamining their core missions and competencies and exploiting innovation in nontraditional ways. General Electric still manufactures products but now identifies itself as a services company. Wal-Mart has become the premier retailer by capitalizing on its logistics and support systems. These two giants and other companies have realized that they can become more profitable by exploiting new regions of the business landscape. 

Applying this business model to national defense, the innovation landscape can be said to have three regions: products (airplanes, tanks, ships), processes (integrated systems), and retrofits of legacy systems. While the Department of Defense (DOD) is not a commercial enterprise, nor can it change its critical missions as a private firm might do, it, too, operates in a dynamic environment and should be in a continual process of transformation to adjust to and exploit change. Achieving the right balance of effort in these three regions will pay handsome dividends. 

Until recently, DOD has invested most heavily in region one, the acquisition of new hardware based on new technologies. Already expensive to acquire, new hardware is even costlier because of its added complexity and need for extensive contractor support. To increase value realized from defense investments, the authors recommend shifting some resources to regions two and three. Creating a framework for exploiting process and retrofit innovation would provide significant increases in capabilities while facilitating successful integration of new product technologies into the existing infrastructure.