Though still adjusting to the end of the Cold War, the defense industry is now confronted with the prospect of military transformation. Since the terrorist attacks on 11 September 2001, many firms have seen business improve in response to the subsequent large increase in the defense budget. But in the longer run, the defense sector's military customers intend to reinvent themselves for a future that may require the acquisition of unfamiliar weapons and support systems. Joint and service visions of the military after next raise serious questions that require the attention of the Defense Department's civilian and uniformed leadership and industry executives alike: What are the defense industrial implications of military transformation? Will military transformation lead to major changes in the composition of the defense industrial base? This study employs network-centric warfare, a Navy transformation vision that is being adopted increasingly in the joint world as a vehicle for exploring the defense industrial implications of military transformation. We focus on three defense industrial sectors: shipbuilding, unmanned vehicles, and systems integration. The transformation to NCW will require both sustaining and disruptive innovation—that is, innovation that improves performance measured by existing standards and innovation that defines new quality metrics for defense systems. The dominant type of innovation needed to support transformation varies across industrial sectors; some sectors face more sustaining than disruptive innovation, while some sectors will need more disruptive than sustaining innovation as they supply systems for the “Navy after Next.” Military transformation does not entail wholesale defense industrial transformation. In the systems integrations sector, much of the innovation required to effect networkcentric warfare is likely to be sustaining rather than disruptive. In the parts of the defense industrial base that build platforms, on the other hand, the standards by which proposals are evaluated for the Navy after Next will be somewhat different than the standards used in the past. As a result, transformation could significantly change the industrial landscape of shipbuilding. The unmanned-vehicle sector falls somewhere in between; because unmanned vehicles have not been acquired in quantity in the past, their performance metrics are not well established. Existing suppliers of unmanned vehicles will have a role in the future industry, but some innovative concepts and technologies may come from nontraditional suppliers, such as start-up firms. The U.S. Navy bears the responsibility of transforming itself. Internally, it must find ways to deconflict the needs of the current Navy and the “Next Navy” from the needs of the Navy after Next if industry is to support its long-term transformation requirements. Externally, pervasive organizational and political obstacles to transformation require that the Navy carefully manage its relationships with Congress and industry. Recognition that military transformation need not drive existing defense firms out of business will facilitate that task.

As the world enters a new millennium, the U.S. military simultaneously enters a new era in warfare -- an era in which warfare is affected by a changing strategic environment and rapid technological change. The United States and its multinational partners are experiencing a transition from the Industrial Age to the Information Age. Simultaneously, it is fully engaged in a global war on terrorism set in a new period of globalization. These changes, as well as the experiences gained during recent and ongoing military operations, have resulted in the current drive to transform the force with network-centric warfare (NCW) as the centerpiece of this effort. This document describes how the tenets and principles of NCW are providing the foundation for developing new warfighting concepts, organizations, and processes that will allow U.S. forces to maintain a competitive advantage over potential adversaries, now and in the future. In sum, the report provides an overview of the ongoing implementation of NCW in the Department of Defense (DoD). A brief description of NCW, including its origins, its central role in force transformation, its tenets and principles, and an implementation strategy, are provided in Chapter 1. An examination of NCW as an emerging theory of war, its relationship to the four domains of Information Age warfare, the growing evidence of its benefits, and the warfighting advantages it can provide are examined in Chapter 2. Chapter 3 focuses on network-centric operations (NCO), including the relationship of NCO to the overarching Joint Operations Concepts (JOpsC), the NCO experience in Afghanistan and Iraq, the development of the NCO Conceptual Framework, and the conduct of NCO case studies. An overview of Joint and Service plans and initiatives to develop and implement network-centric capabilities and the growing investment in these capabilities by our allies and multinational partners are provided in Chapter 4.

Provides answers to some of the fundamental questions regarding network-centric warfare (NCW) as an emerging theory of war in the Information Age. Describes how the tenets and principles of NCW are providing the foundation for developing new warfighting concepts, organizations, and processes that will allow our forces to maintain a competitive advantage over potential adversaries, now and in the future. Provides an overview of the ongoing implementation of NCW in the Department of Defense (DoD).

In Buying Military Transformation, Peter Dombrowski and Eugene Gholz analyze the United States military's ongoing effort to capitalize on information technology. New ideas about military doctrine derived from comparisons to Internet Age business practices can be implemented only if the military buys technologically innovative weapons systems. Buying Military Transformation examines how political and military leaders work with the defense industry to develop the small ships, unmanned aerial vehicles, advanced communications equipment, and systems-of-systems integration that will enable the new military format. Dombrowski and Gholz's analysis integrates the political relationship between the defense industry and Congress, the bureaucratic relationship between the firms and the military services, and the technical capabilities of different types of businesses. Many government officials and analysts believe that only entrepreneurial start-up firms or leaders in commercial information technology markets can produce the new, network-oriented military equipment. But Dombrowski and Gholz find that the existing defense industry will be best able to lead military-technology development, even for equipment modeled on the civilian Internet. The U.S. government is already spending billions of dollars each year on its "military transformation" program-money that could be easily misdirected and wasted if policymakers spend it on the wrong projects or work with the wrong firms. In addition to this practical implication, Buying Military Transformation offers key lessons for the theory of "Revolutions in Military Affairs." A series of military analysts have argued that major social and economic changes, like the shift from the Agricultural Age to the Industrial Age, inherently force related changes in the military. Buying Military Transformation undermines this technologically determinist claim: commercial innovation does not directly determine military innovation; instead, political leadership and military organizations choose the trajectory of defense investment. Militaries should invest in new technology in response to strategic threats and military leaders' professional judgments about the equipment needed to improve military effectiveness. Commercial technological progress by itself does not generate an imperative for military transformation. Clear, cogent, and engaging, Buying Military Transformation is essential reading for journalists, legislators, policymakers, and scholars.