SIMI VALLEY, Calif. — If the U.S. military intends to technologically keep pace with China, now is the time to invest in the long-term health of the defense industrial base, including creating a new national guard-esque unit for technology and adding a special visa program, a new report warns.

Put out ahead of the Reagan National Defense Forum, the new report by the Reagan Foundation found that the U.S. national security innovation base (NSIB) suffers from a lack of direction from the federal government, a loss of talent to other nations, an aging workforce and a lack of innovative incentives, all of which gives a centrally coordinated Chinese defense industrial base a likely edge in the future.

“Competition with China need not lead to warfare or even to a policy of containment like the framework that characterized the U.S.–Soviet relationship during the Cold War. Nevertheless, it is a competition, and the side that innovates more effectively over time is likely to win,” the authors write in the report.

“The result will determine whether nations relate to each other freely, equally, and peacefully, with a recognition of the human rights of their citizens or if they devolve into a system that legitimizes authoritarianism and rewards power and coercion.”

The bipartisan task force is led by co-chairs Jim Talent, a former Republican U.S. senator, and Bob Work, who last served as deputy secretary of defense. It includes four sitting members of Congress — Republicans Jim Banks of Indiana and Mike Gallagher of Wisconsin, as well as Democrats Andy Kim of New Jersey and Stephanie Murphy of Florida — the CEO of Textron Systems, and a group of former U.S. officials. Speaking to reporters Thursday, Reagan Institute head Roger Zakheim said his organization will spend the next year trying to “move the ball” on as many of the key recommendations as possible.

“Our government is not organized around the national industrial base. The government is not organized around it so it can’t do the things the government is responsible to do, which is enable, develop, guide and safeguard,” Zakheim said. “So it’s pretty critical, whether they adopt our recommendations or another framework, the government needs to be organized around the innovation base.”

To do that, the task force lays out five key recommendations:

  1. The creation of a new interagency body, tentatively called the “National Security Innovation Committee,” that would be tasked with closely monitoring and guiding the health of the industrial base. The task force also spells out that this committee should “be responsible for coordinating and submitting a unified budget analysis to Congress each year to evaluate all of the activities” in the U.S. government that relates to the NSIB. Doing so would maintain a rolling look at how the government is doing on coordination. The Pentagon would be the lead agency in this committee.
  2. Creating a national “STEM Corps,” which would provide free university tuition in national-security-relevant fields in exchange for a commitment to spend several years working within the national security industrial base in some capacity. It would be modeled on ROTC or the National Guard, with both an active and reserve component. The “active” component of the STEM Corps would include graduates through the program who would work full-time in designated government and DoD billets. The “reserve” component would work two days each month, and 14 days each summer, with government agencies or Pentagon offices.
  3. A National Security Innovation Base Visa, which would encourage highly vetted, highly skilled workers from abroad to contribute to national security projects. This issue is one that has been identified by experts as a major issue for America’s defense innovation going forward; the U.S. has long relied on STEM expertise from allies and partners, and tech companies coveted by defense leaders soften have international staffs. Zakheim acknowledged this might be the toughest step to take, noting that “You can put the words ‘national security innovation’ and everyone will be for it, then you add the word ‘visa’ and people withdraw.” But he said not helping individuals from allied nations to stay and work on key U.S. problems just leads to “brain drain” that hurts American national interests. Given the need for Congress to create such a visa program, Zakheim noted that there are four members of Congress from the task force who represent a beachhead on the hill for the concept.
  4. That visa program would go hand in hand with setting up a more formal international framework for national security industrial efforts, in order to utilize capabilities being produced by close allies. Zakheim thinks this opportunity could be set up “fairly quickly,” in part due to work in previous national defense authorization bills that expanded the definition of the National Technology and Industrial Base to include Canada, the United Kingdom and Australia. “It’s just about getting the senior officials to engage on that with their counterparts, because I think there would be a lot of willingness and interest on the part of allies and friends” to expand industrial cooperation, Zakheim said.
  5. And of course it would not be a defense report in 2019 without recommendations for a broad array of Pentagon business reforms, with the target of creating a more “risk-positive” development mindset in the NSIB. The department is already undergoing a series of reform efforts, and acquisition head Ellen Lord has talked repeatedly about trying to retrain the work force to no longer fear innovative failures.

“There’s a sense of urgency around all of this,” Zakheim said, adding that the task force recommendations largely add up to “taking advantage of our competitive advantage” as a nation.

Many of the ideas in the task force report mirror those of the congressionally mandated National Security Commission on Artificial Intelligence — which is also co-chaired by Work, the former deputy secretary of defense. That may be a sign that there is growing consensus around the innovation-minded community, which could help drive progress forward.

China does have its own weaknesses in the system, the authors note, especially with a lack of demonstrated ability to carry a new technology from inception to implementation the way the U.S. has as well as growing structural problems inside the Asian giant.

“Ultimately, the Chinese system may have the seeds for its own downfall: corruption remains a major problem; the private sector is becoming increasingly politicized; and the culture of state-owned enterprises, which dominate its defense sector, is vastly different from the culture of its more entrepreneurial companies,” the task force writes.

But America can “ill afford to assume this will always be the case,” and ultimately it is best to focus on improving the U.S. national security apparatus rather than hope China stumbles over every potential landmine in its way.

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.

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