Mobilization Through Cooperation: The New Defense Industrial Base

A revolution is underway in America’s defense industrial base. It isn’t just about integrating new technologies or making more weapons faster, and smarter, and cheaper, although that lies at the core of any successful manufacturing enterprise. It’s also about rediscovering the lessons learned during World War 2 and combining those proven techniques with the new approaches and technologies of today, to shore up US defense and provide deterrence for the next century.

Until now, the key formula for combining innovation with productivity has been fostering competition between key prime contractors to produce the best at the lowest cost. During the Cold War this was a powerful incentive for getting big companies to step up with their “best shot” for a major contract, as when Chrysler and General Motors competed for the M1 battle tank in 1970, and General Dynamics went up against Boeing and Rockwell for the B-1 bomber contract that same year.

Rather than relying on a handful of firms competing for a small number of highly lucrative contracts, many firms today are turning to collaboration to come up with more innovative solutions to today’s threat landscape. Just as World War II brought together America’s automobile companies, both large and small, to share resources and IP voluntarily through the Automotive Council for War Production;  just as a company like Bell Labs created a modular work environment for sharing ideas and insights; and Steve Jobs deliberately designed his Apple facilities to maximize random interactions between different departments. Encouraging cooperation among defense companies, both large and small, can offer similar qualitative leaps in innovation, and major quantitative leaps in scalability.

One powerful way to do this is through an industrial campus approach. Through industrial campuses, an ecosystem of innovative companies and existing producers can create the production miracle the U.S. needs. Tenants benefit from a less expensive source of capital for factories and R&D while gaining access to a growing network of nearby shared services, logistics, resources, and manufacturing-related capabilities.

By bringing together the companies and tools that make for a horizontally integrated enterprise, they can ultimately achieve the kind of scalability we usually associate with the vertical integration of large system integrators like today’s Lockheed Martin and Northrop Grumman.

The end-result of this current effort is the kind of modularity and flexible supply chain management that Henry Kaiser was able to achieve in the 1940’s, first with building his Liberty ships and then with his Casablanca class escort carriers for the Navy. It’s also what Andew Jackson Higgins did with building his landing craft that General Dwight D. Eisenhower credited with winning World War 2.

Any new technology needs a physical place to scale from R&D to prototype; it also needs to engage with other pieces of the overall manufacturing ecosystem, in order to scale efficiently to full rate production. A horizontally integrated industrial campus can do both, at scale, quickly.

Most importantly, industrial campuses like these offer a resilient, flexible, and responsive network of industrial hubs that can move from observing and analyzing a real battlefield problem to designing, testing, producing, and deploying a scalable solution at the speed of innovation. Indeed, the most important lesson we can learn from World War Two, and now from the war in Ukraine, is that the weapons deployed at the start of a war, are rarely the ones that bring decisive victory. Those come together instead to deal with specific threats and scenarios in the evolving battle space, like the Sherman tank and Casablanca class aircraft carrier in World War Two and the fleets of drones currently combing the skies over Ukraine.

The same will be true for winning the manufacturing race for hypersonics and the Golden Dome, and confronting America’s biggest threat, namely China. Just as turning to cooperation versus competition can make us rethink how to revive our defense industrial base, so the industrial campus can turn cooperation into a powerful tool for manufacturing victory, one system at a time.

Arthur Herman is Senior Fellow at the Civitas Institute and author of Freedom’s Forge: How American Business Produced Victory in World War II.