America needs an offset strategy built on speed, adaptability and a robust, dynamic aerospace industry.
To secure America’s interests around the world, the U.S. military must be able to deter and defeat adversaries throughout the threat spectrum. This includes China and Russia at the top end, nuclear ambitious Iran and North Korea at the mid-tier, and non-state actors in the Middle East and Africa at the low end of the threat spectrum. Given what is at stake at each level, addressing these threats is not optional. Each demands smart, credible options that rely on a balanced force design.
The U.S. Air Force provides some of the most crucial capabilities against all these geographically disperse and technically complex challenges. Because its core service missions are air superiority; global strike; global mobility; intelligence, surveillance, and reconnaissance (ISR); and command and control, the Air Force provides greatly needed policy options to U.S. national security leadership that no other service departments can deliver. The demand signal of multiple, concurrent worldwide responsibilities, however, is straining the Air Force.
Simply said, the Air Force is too old, too small, and too fragile for what the nation expects of it. David Ochmanek, a respected and experienced defense analyst, aptly sums up the impact of these dynamics when it comes to U.S. competitive advantage: “In our wargames, when we fight Russia and China, blue gets its ass handed to it.”
While advanced capabilities will certainly be important to prevailing in these future challenges, leaders must also seek additional points of advantage. The simple reality is that it is no longer a safe bet to assume that the United States will possess a unilateral technological advantage. Countries like China are aggressively pressing forward—and perhaps even outpacing the United States—in zones like machine learning.
Neither the Air Force nor the aerospace industrial base are structured to rebalance the force to exploit the potential advantages of these attributes. Instead, they have developed a procurement and sustainment model that favors maintaining and upgrading legacy weapon systems; developing multi-role, multi-function platforms; and procuring budget economies by reducing type diversity.
However, U.S. aerospace forces can no longer spend decades in a quest to secure the most exquisite capability, nor use capability as a reason to reduce capacity. We cannot do more with less.
This calls for securing new points of force design advantage: quantity, diversity, adaptation, and speed. These attributes, paired with a continual focus on quality and advanced capability, will prove crucial to achieving future success.
Smaller And Older
In 1991, Operation Desert Storm showcased the Air Force’s overwhelming operational advantages in stealth, information superiority, and precision. Many U.S. leaders have assumed those advantages would endure. Instead, this perceived superiority evolved into complacency and atrophy in procurement and development.
In the wake of Desert Storm, the American defense establishment entered a decade-long “procurement holiday” during which new programs were curtailed, deferred, or canceled altogether, while force structure was cut dramatically. The Air Force absorbed the deepest budget cuts of all the services in the decade following the Gulf War and the service has never recovered. From 1989 to 2001, Air Force procurement spending suffered a loss of 52 percent of its acquisition budget. In contrast, the Army and Navy procurement budgets lost roughly 30 percent. Looking at sheer numbers, the Air Force fighter aircraft inventory declined from roughly 4,400 to around 2,000 over the past 30 years—55 percent. The bomber inventory dropped from 327 to 157, more than 50 percent.
The deterioration of the Air Force now puts U.S. national security at risk.
Recovery will be difficult. The aerospace industry suffered as a result. Reduced market demand led to consolidation, reducing the opportunity for competition, and altering business models and incentives. With fewer new programs to entice and sustain companies, the number of qualified prime contractors declined from 51 firms in the 1980s to just five today, only three of which can build aircraft.
Former Assistant Secretary of the Air Force for Acquisition, Technology, and Logistics, Will Roper, sought to reverse that trend. “Right now we are down to just a couple of companies who can build tactical airplanes for us,” he said. “We need to do everything in our power to start opening up that envelope again.”
Air Force buying behavior is what has created current industry dynamics. Today, production primarily serves to secure future modernization and sustainment business, rather than as a primary profit driver. The result is that firms closely guard data rights and other intellectual property and benefit the longer a weapon system remains in service. But what’s good for business is not necessarily best for national security. As aircraft age, sustainment and modernization costs grow, inevitably squeezing procurement spending. That threatens future innovation, adaptation, diversity of thought, and transformation.
The Air Force—and the defense aerospace industry—must create a new force design. Dependence on a few highly capable, multi-role, multi-function aircraft has contributed to the shrinking of the size and diversity of the force. In its wake is a force too small and too homogenous to be effective in high-end combat, yet too exquisite and expensive at the low end.
The optimal future force design will still need to have highly advanced technologies to compete with sophisticated peer adversaries, but the Air Force must also be able to field many different new systems rapidly and in quantity, and it must be able to quickly adapt, shift, and modify its forces and operational architectures. The future demands a new force design that rebalances the attributes of quality, quantity, diversity, adaptation, and speed.
Traditional offset strategies seek out game-changing technological leaps to gain an edge, but these require time and investment to develop. Add to that the increasingly complex and layered acquisition bureaucracy, and time frames stretch even further. Against a technological peer like China, adaptation and speed will be USAF’s critical combat advantage. Time, therefore, is the new offset: The nation that develops, fields, and adapts faster will wield the advantage.
Symmetry And Offsets
In symmetrical competitions, two opposing sides compete on similar merits. Both sides might share similar force designs and pursue similar technologies, strategies, or strengths. As a consequence, symmetric contests point toward attrition warfare, where victory can be secured through superior numbers.
An offset strategy, on the other hand, shifts the competition away from symmetry. In pursuit of an offset, one competitor cultivates an area of strength to gain an advantage over the other’s weakness. This can compensate for a numerical weakness and even lead to a long-term advantage.
America’s first offset strategy originated in the wake of World War II. One of America’s principal advantages in the Second World War was its production might. Indeed, the Allies’ victory is often credited to America’s “arsenal of democracy,” which produced 12,692 B-17s and 18,190 B-24s during the four-year war.
Throughout World War II, the United States maximized every attribute of force design: quality, quantity, diversity, adaptation, and speed. When the war ended and the manufacturing base returned to commercial production, defense leaders faced a quandary. In the 1950s, the CIA assessed that the Soviet Union could field about 175 divisions along the European central front, with another 125 divisions in reserve that could be deployed within a month. The United States, by comparison, had 29 Army and Marine Corps divisions, with only seven in reserve. Unable to match those superior conventional forces, U.S. defense leaders focused instead on superior science and technology. President Dwight D. Eisenhower shifted the competition into the nuclear realm, where America’s lead in nuclear weapons development provided a unique edge. His administration’s “New Look” strategy required the military and its industrial partners to develop and field a broad range of advanced nuclear weapons and delivery systems.
Small nuclear munitions would be used for battlefield engagements, while the U.S. would seek to deter strategic escalation by holding the Soviet heartland at risk through massive nuclear retaliation. Supersonic aircraft like the F-102, F-104, F-105, and F-106 provided speed to both offense and defense missions. This deterrence approach worked. Those conflicts in which the United States did fight were smaller in scale did not involve direct, overt war with the Soviet Union.
Acquisition programs in this era prioritized capabilities optimized to counter the Soviet Union in a potentially nuclear context. The Century Series fighters, although often maligned for their performance in Vietnam, proved relatively versatile and adaptable to a conflict for which they were not designed, largely because of their loosely coupled and federated mission systems. Their internal avionics architectures were flexible enough that they could be modified to perform roles that not envisioned by their original designers.
While the physical design and aerodynamic attributes of the aircraft were fixed, the speed of development and the federated adaptability of these aircraft enabled the Air Force to meet unexpected operational demands.
The F-100, developed in the wake of the Korean War, was a direct attempt to counter Soviet airpower above Europe and in continental defense missions over the United States. When the Vietnam War erupted in 1965, the F-100 proved inherently adaptable for a range of other missions, including close air support, electronic warfare, and as “Fast FAC” forward air controllers.
The F-105 Thunderchief “was designed to fight a nuclear war in which the delivery of one nuclear weapon at low altitude and high speed was all that was required.” Yet the F-105’s primary operational use was as a conventional bombing aircraft in Vietnam. It served as a “Wild Weasel” to defeat enemy surface-to-air missiles and eventually was modified to conduct specialized all-weather, night bombing. Though not well-suited aerodynamically for these roles, it had the fundamentals to adapt.
But as adaptable as these aircraft were, the Air Force identified some key liabilities in the force they had designed to fight the Soviets. Vietnam, as a proxy war, was a testing ground for U.S. capabilities and tactics—and the Air Force found itself lacking. Two key areas stood out: the need to improve bombing mission effects, and the vulnerabilities of its aircraft to enemy surface to air defenses.
Because of the imprecision of unguided bombs, aircrews often had to revisit targets to ensure their destruction. The infamous Thanh Hóa Bridge, for example, survived more than 700 sorties, costing the U.S. 29 aircraft. Driven to rethink the strategy, the U.S. began developing laser-guided bombs for increased target accuracy, improving the overall effectiveness of attacks. By 1968, the first F-4s had been adapted to fly with “Pave Knife” targeting pods and “smart” laser-guided bombs. The Thanh Hóa Bridge finally fell in 1972, when a dozen F-4s, each employing two precision guided bombs, destroyed it.
Similarly, Soviet air defenses used in North Vietnam meant that every strike aircraft seeking to penetrate that air space needed four jamming aircraft to get through. Even then, aircraft were still shot down at alarming rates. The United States lost 15 B-52 bombers in 12 days during Operation Linebacker II, the very same aircraft developed to strike deep into the heart of Soviet territory. The takeaway was clear: Jamming was not sufficient; the U.S. needed a way to evade Russian air defenses. The answer was stealth.
The Defense Advanced Research Projects Agency (DARPA) and the Air Force awarded both Northrop and Lockheed individual contracts for the Experimental Survivable Testbed (XST) program in 1975. Pursuing different approaches to reduce aircraft radar signatures, Lockheed went on to develop Have Blue, which would evolve to become the F-117, the first operational stealth aircraft, fielded in 1983. Northrop created the next generation of stealth in the smoothed form of the B-2. Stealth would become a long-term advantage for U.S. forces, embodied in the B-2, F-22, F-35, and the future B-21.
Precision-guided weapons and stealth were just two examples of the advanced technologies that came to comprise the Second Offset. Improved intelligence, surveillance, and reconnaissance (ISR) and precision navigation like GPS proved critical to enabling better targeting, and advanced processors were also key to increasing sophistication of aircraft and weapons. Together, these technologies had a synergistic impact on U.S. operations: we could be more lethal and survivable with our smaller force.
As then-Secretary of Defense Harold Brown described in 1981, “technology can be a force-multiplier, a resource that can be used to help offset numerical advantages of an adversary.”
Better And Smaller?
The overwhelming success of Desert Storm in 1991 validated the theory of the Second Offset, that smaller could be better. The the fall of the Soviet Union that same year left the United States as a sole superpower. The Second Offset was now used not to compensate for a smaller force, but to justify cutting the force. By being better, the U.S. military could get smaller. In 1993, the Air Force reduced fighter wings from 36 to 27, and the Bottom-Up Review—completed that same year—cut even deeper, to 20 fighter wing equivalents.
Later, the B-2 and F-22 programs were curtailed. The B-2 dropped from 132 planned aircraft to just 21; the F-22 was cut from 750 to 339 and ultimately to 187 aircraft. Older legacy platforms that were supposed to be replaced, like the B-52, B-1, and F-15, instead had to be retained to support the high operational tempo driven by unanticipated conflicts.
With new starts curtailed, the aerospace industry adapt, optimized for the business they had and could project. They gave up their traditional core competencies in aerospace design and production capacity in favor of business models built on upgrades and sustainment.
Years of deferred recapitalization have harmed the Air Force and the aerospace industry that supports it. Engineering teams are not experienced in new designs or skilled manufacturing because companies have been focused on sustaining the past. This lack of expertise, coupled with the Department’s pursuit of ever-more complex, multi-role aircraft, means that it now takes decades to field any new system. In the meantime, legacy aircraft are getting older and more expensive to sustain. That leaves less money to develop and buy next-generation aircraft.
The result of cuts directed by the Air Force, DOD, the White House’s Office of Management and Budget (OMB), and Congress have combined, over the years, to yield a force unable to realistically match the strategies it is charged with executing. Planners have failed to realize that rather than a “silver bullet” force, the Air Force now teeters toward a hollow force, with too few legacy and “next-generation” aircraft to be effective.
A New Offset Strategy
Past U.S. offsets focused on advanced technologies, but that is not the only option. Offset strategy can focus on many attributes: quality, quantity, diversity, adaptation, or speed. Force designers can dial up any one of these attributes to yield the desired advantage.
- Quality refers to advanced technologies and is often synonymous with “capability.” Leaps in technology shaped U.S. military dominance for over 40 years—technologies like stealth, precision strike, highly accurate navigation and timing, and global reach defined the Air Force for a generation. But given the long lead times needed to field new technologies, and the technological abilities of our adversaries, this is an advantage that may not prove enduring.
- Quantity is reemerging as an essential element of force design, driven by the need to: effectively cover geography with tempo and mass; present adversaries with sufficient complexity to complicate their targeting and operational strategy; and withstand attrition in contested environments while remaining operationally resilient and effective.
- Diversity describes the need for different capabilities in each mission area; for example, having three types of bombers—B-52s, B-1s, and B-2s—provides commanders options and complicates adversaries’ planning, defenses, and targeting.
- Adaptation ensures the ability to both field new capabilities and modify existing weapon systems and to pursue new operational concepts.
- Speed is about the pace at which the United States innovates. Developing new capabilities and fielding them in operationally significant quantities pressures adversaries by creating new unknowns. Accelerating change is crucial to disrupting adversary awareness, understanding, decision, and action. When optimized, this pace exceeds adversaries’ ability to adapt.
Time As The New Offset
Today’s Air Force reflects decades of choices that prioritized quality over any other attribute. To achieve a competitive advantage now, the Air Force must pivot to harness the advantages of adaptation and speed. In a world where peer adversaries have technological parity or even a genuine lead in some areas, the real strategic offset now is time. Speed of adaptation must now drive all the other attributes of force design.
Stealth was once an exclusive U.S. capability, but America’s adversaries have been pursuing stealth as well as advanced air defenses to counter low-observable aircraft for decades. Today, therefore, stealth is a baseline from which to compete, not by itself a strategic advantage.
In 2014–15, DOD leaders proposed a so-called “third offset,” built around a suite of emerging technologies including “autonomous learning systems, human-machine collaborative decision-making, assisted human operations, advanced manned-unmanned systems operations, and network-enabled autonomous weapons and high-speed projectiles.” These technologies, like past offsets, aim to maximize the combat potential of a size-constrained U.S. force. However, many observers now believe China is ahead of the United States in machine learning and artificial intelligence.
Fighter Production and Inventory, 1950–2015.
China is aggressively pursuing hypersonic missiles such as the DF-17 boost-glide and the Xingkong-2 hypersonic waverider vehicles. While debate may surround the maturity and capabilities of these efforts, what is clear is that these third offset technologies will not be the sole advantage of the United States.
Time, paired with continued technological innovation, may be a better offset strategy. Operationalizing new capabilities at speed can become a new asymmetric advantage. Technologies still matter, and advancing capability still matters, but these innovations do not need to be massive game-changers in the traditional sense nor confer decades of advantage. Instead, rapid adaptation should be the focus. The United States must be able to field a force that can present unexpected force mixes with unanticipated operational architectures at speed.
A force design that could support such an offset strategy requires the constant advancement of technologies that can be fielded in either mission-specific or simple-function types. Doing so imposes uncertainty on adversaries, making possible unpredictable force compositions. At a technological level, this force design constantly innovates, fields, adapts and changes at a pace that fundamentally disrupts adversaries’ strategy and operations.
There are three crucial elements to this strategy:
- First, the United States must be able to field new capabilities faster than it has in recent decades.
- Second, the United States must be able to field a technology or adaptation faster than the adversary can negate that capability. Being “faster than red” enables U.S. forces to operate inside adversary adaptation cycles.
- Third, the United States must field new capabilities fast enough to be operationally relevant, meaning that rather than demanding 100 percent perfection before a system can be fielded, the Air Force must focus instead on quickly getting even nascent capability to the warfighter.
Today’s defense enterprise is not positioned to compete in this new kind of offset, however. The U.S. aerospace industry must accelerate the pace of fielding and integrating new capabilities. The Air Force must be able to rapidly connect, command, and create surprising new force compositions to confront adversaries. It needs advanced and unorthodox systems that can disrupt adversaries’ ability to understand, predict, and target U.S. or allied operational architectures.
After 30 years of constrained investment and “smaller but better” thinking, the Air Force can now use market incentives to help expand the aerospace industry and incentivize rapid development. Launching new production starts every five to seven years and maintaining multiple production lines at once may seem ambitious today, but doing so promises important benefits, including more strategic options, higher quality products, and increased creativity in the industrial base.
The Industrial Base
Since the 1990s, Air Force acquisition trends have prioritized economies of force—maximizing the mission roles of any single weapon system—to the continuing detriment of the industrial base. In prioritizing highly advanced technologies over quantity, speed, or adaptability, DOD drove the market to consolidation. While the Air Force gained extremely capable, multi-role platforms that negate the need for alternate mission-focused or single-role systems, the price paid was reduced diversity and quantity of aircraft.
Homogenizing the Air Force inventory decreased the number of business opportunities for industry to compete and win new business. As a monopsony system, defense companies are reliant on a single major customer—the U.S. Department of Defense—and its political components, including the administration and Congress. Companies must adapt to DOD buying trends and to legislation that controls, and in some cases blocks, exports. Some companies exited aircraft design, development, and production, either entirely, or narrowing their focus to subsystems. Others were acquired by larger companies. Still others adapted by focusing on winning major bids and then making up lost profit on future upgrades and sustainment. Consolidation allowed major defense contractors to survive the capricious nature of defense procurement, but it leaves the Air Force with few options to build the future force.
Consolidation
In 1950, 19 companies could build military aircraft. Today, only three are left: Northrop Grumman, Boeing, and Lockheed Martin.
Instead of building everything, these prime contractors partner with a range of suppliers to spread both risk and reward. Integration is a critically valuable skill. In addition to integrating components, software and processing power are emerging as linchpins of combat aircraft design, combining advanced sensing, data links, autonomy, artificial intelligence, machine learning, man/machine-teaming, and other software-enabled functions. The F-35, by far the most advanced operational aircraft in the world, has over 8 million lines of source code and another 16 million lines in its sustainment, mission planning, and maintenance support equipment.
In this world, the data rights for the platform and the software architecture are critical assets for the original equipment manufacturer. Government concerns about these data rights are understandable, because “vendor lock” is a real worry. But for manufacturers uncertain about future procurement volumes, securing data rights ensures future profit from sustainment and modernization contracts. Owning the data rights for follow-on sustainment and modernization programs, in fact, is the key to their future profitability.
Solving the Puzzle
The Air Force can change this paradigm and achieve quality, quantity, and adaptation at speed, but must make changes for that to happen. It must expand the aerospace industrial base, enhance the integration skills of both industry and its Airmen, and shift industry’s main profit centers away from sustainment and back into design and production.
To achieve that the Air Force should:
- Expand the defense aerospace industrial base. The Air Force can use areas of rapid technological development to bring in new companies and provide them key design experience. Providing ongoing competitive prototyping programs will enhance the expertise of new and established design teams. Future joint aircraft programs should be avoided. Increasing the number of new-start competitions, even if they are smaller, will drive increased competition, innovation, and design diversity while allowing companies future competition opportunities. This gives the nation strategic depth of capability and cultivates seasoned talent and experience.
- Enhance the integration skills of design teams by pursuing a strategy of rapid adaptation. Integration expertise is crucial to accelerating change in the battlespace. Experimentation with open mission systems, modular avionics architectures, containerization, and adaptive networking will be crucial developing both technologies, software, and skills at the system and operational level. The skill and creativity of teams to conceptualize and integrate complex systems will provide strategic and operational advantages in a peer contest.
- Shift the defense aerospace industry’s major profit center away from sustainment and into innovation and production. With industry’s major business lines in sustainment and modernization, they are incentivized to perpetuate the status quo force design and protect proprietary programs. Shifting the profit model more toward production will encourage innovation and rapid fielding. The Air Force can accelerate development and fielding cycles by maintaining on-going competitive prototyping programs and holding more frequent new-start competitions, keeping multiple production lines hot, and maintaining a younger fleet age. It should also invest in adaptive and affordable manufacturing technologies and accept and proactively manage smart risk by prioritizing rapidly fielded iterative improvements over perfect systems.
The United States does not have an exclusive hold on developing advanced technologies. Other nation states—most worryingly, China—are competitive in key areas like machine learning, artificial intelligence, and computation and processing. The global proliferation and acceleration of technological development means the old strategy of relying on technology alone to offset a smaller fleet no longer works. The system we have developed requires decades to develop and field new capabilities, and in competition with China, they may be late to the game. Adaptation will be the new advantage, and time the new offset.
To field advanced capabilities at the speed warfighters need, the defense industrial base must expand. This can only be accomplished by changing Air Force acquisition. Reforms alone cannot deliver the force the nation needs—a robust, vibrant, and competitive defense industry will.
U.S. defense aerospace companies employ some of the world’s greatest engineering talent and possess the ingenuity and manufacturing skill to build the best aircraft in the world. By changing the way it does business, the Air Force can build upon these strengths and expand the options in the marketplace. Business follows the money. Moving profit incentives from sustainment to R&D and production is the best way to achieve rapid adaptation.
Lt. Gen. David Deptula, USAF (Ret.) is dean of AFA’s Mitchell Institute for Aerospace Studies. Heather Penney is a senior fellow at the Institute. Download the entire paper here.
