Case Study: Bridging the Strategy-Industrial Reality Gap
About the Experts
Becca Wasser and Phil Sheers from the Center for New American Security (CNAS) authored "From Production Lines to Front Lines: Revitalizing the U.S. Defense Industrial Base for Future Great Power Conflict." Wasser specializes in defense strategy and great power competition, while Sheers focuses on defense budgets and acquisition policy. Their research combines strategic analysis with practical policy recommendations.
About CNAS
The Center for New American Security is a leading defense policy think tank that bridges the gap between government and industry through rigorous research and strategic analysis. CNAS's defense industrial base work examines how America's manufacturing capacity intersects with national security strategy, and makes recommendations for policymakers and industry leaders on navigating the transition from “Pax Americana” to great power competition.
Key Takeaways
1. We are in a crisis of our own making.
"The U.S. government has the defense industrial base it paid for."
Three decades of inconsistent demand signals, post-Cold War consolidation, and bureaucratic barriers shaped today's capacity constraints. This isn't market failure - it's policy consequence.
2. Execution-focused startups may be the larger, unsung opportunity
Most defense venture capital flows toward novel capabilities, but there's an underweighted opportunity in execution-focused companies. Startups that can produce existing requirements "better, faster, more voluminous" face different technical risks but potentially clearer market demand.
The path to scale often lies in manufacturing innovation rather than product innovation.
3. Our material dependencies are the root of the current competition
Critical components for defense systems - magnets, sensors, radars - trace back to Chinese supply chains. This creates strategic vulnerabilities where adversaries can read our industrial timelines and plan accordingly. The smartest long-term investment may be synthetic materials research currently underfunded at universities, representing a potential leap-ahead opportunity for early movers.
4. Manufacturing scale is going to be a big differentiator
Current new entrants excel at winning prototype and small-scale contracts, but future conflicts require massive production volumes. The companies that solve manufacturing scale from day one - not as an afterthought - will separate from the pack. This means designing for production flexibility, not just performance optimization.
5. The rules of the game dictate available options — and Congressional politics play
The Air Force's failed attempts to divest aging aircraft reveal how local job concerns can sometimes override military strategy. But this same dynamic creates opportunities for startups: Congressional adds (typically up to $5 million) reward companies that can demonstrate local economic impact alongside military value. Understanding the political economy of defense spending is as important as understanding the technology.
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