Oct. 1, 2018

Energy

2018 Antonelli Award Winner: On a Monday morning, just as the country is waking up to a new workweek, a team of terrorists attacks, boards, and explodes an outbound Liquefied Petroleum Gas tanker, sinking it in the Houston Ship Channel and thereby blocking the channel. The Kinder Morgan Pasadena refined products terminal fuel transfer facility located along the channel is shut down, and the connection to the Colonial Pipeline, which supplies the East Coast, is physically destroyed (see Figures 1 and 2). That evening, while many in the country are still processing the morning’s events, cyberterrorist actors attack Houston’s electrical grid, leading to blackouts along the shipping channel and leaving much of the country’s oil, gas, and chemical infrastructure cold and dark. Through these attacks, roughly 30-60 percent of America’s daily refined oil products are cut off, the nation’s largest petrochemical complex is isolated, and America’s most critical energy node is physically and electronically isolated—and will be for weeks. Even as federal and state officials rush to mitigate the attack's impact and to neutralize the threat, they recognize that the country will take years to register the full economic and social impact of the day’s events.

Environment Sept. 30, 2018

Environment

In the early 1950s, farmers in a Colorado town reported “unexplained sickness among livestock” and damaged crops. In time, researchers linked these problems to an Army chemical arsenal near Denver that had manufactured war materials years earlier. Rachel Carson documented this incident, among many others, in Silent Spring, the “bible” for the American environmental movement. Military operations and environmental concerns thus were linked before an industry emerged to address the challenges and opportunities presented by the interaction between humanity and the earth around us. This report examines the Environment Industry, a thriving industry with growing influence in this country as a vital source of support for national security. The effects of the environment on human safety and prosperity are undeniable, and as sea levels and temperatures rise, the United States is best served by being aware of the environment and planning to meet and anticipate threats from environmental conditions. The industry represents a unique advantage in the strategic deployment of resources because environmental concerns can have potentially devastating effects on the nation’s security, and these threats can be anticipated, prevented, mitigated, and adapted to using resources available from this industry.

Finance (Formerly Financial Services) Sept. 25, 2018

Finance

The preamble to the US Constitution enumerates the purpose of our government: to “establish Justice, insure [sic] domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”1 The Eisenhower School Industry Study program explores the US industrial base’s ability to provide resources for the common defense. As one of twenty studied industry sectors, the Financial Services Industry (FSI) not only contributes directly to the health of the US economy, it also provides credit and liquidity to finance the defense industrial base. Three views capture why the FSI remains critical to the United States’ national security. First, as the 2017 National Security Strategy (NSS) establishes, “Economic security is national security.” A safe and resilient FSI underpins a secure and prosperous economy. Accordingly, the FSI is designated vital critical infrastructure key to US economic security. Thomas Jefferson articulated a second, competing point of view, “banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” Or more simply, the FSI poses a fundamental danger to the nation. The third point of view, that of Alexander Hamilton, highlights the FSI’s value to a nation’s future greatness: “And thus by contributing to enlarge the mass of industrious and commercial enterprise, banks become nurseries of national wealth…” Although seemingly divergent, these views all share a common theme, the criticality of the FSI to national security. Not only is FSI directly linked to today’s national security, it both poses an inherent danger while also being fundamental and essential to the nation’s growth, development and prosperity. The purpose of this study is to develop policy recommendations through which the financial services industry can more securely support and make a greater contribution to national security.

Healthcare Sept. 24, 2018

Health Care

The health care sector in the United States (U.S.) consumes approximately 17 percent of GDP, comprises 42 percent of mandatory Federal spending, drives deficit spending, and touches every aspect of American life, including military readiness. The Department of Defense (DoD) Unified Medical Program (UMP) – the consolidated budget for the Military Health System (MHS) – consumes more than eight percent of total DoD outlays. Absent significant change, increased DoD health spending will begin to crowd out readiness and modernization efforts. Similarly, U.S. mandatory spending, driven by the aging population and rising health care costs, will begin to crowd out discretionary spending by 2029. Compounding this grim financial picture, American health care is the world’s most expensive, but far from the world’s best in terms of access to primary care, prevention, coordination of services, and core measures such as morbidity and mortality.

Networking (Formerly NewsMedia, Information and Communications Technology) Sept. 23, 2018

Information and Communications Technology

The information and communications technology (ICT) industry is a driver of economic growth, an essential enabler of other industrial sectors, and a source of rapid and disruptive innovation. ICT is at the heart of the 4th Industrial Revolution, defined as convergence of the digital, physical, and biological worlds. Individual research and visits to ICT firms and institutions in the Washington, DC, area, California, China, and South Korea revealed that, while the U.S. remains the global leader in the ICT field, it faces intense competition from foreign competitors fully committed to winning the race for technological supremacy. Policymakers should focus on strengthening public-private collaboration and modernizing outdated regulatory structures to address national security needs while fostering the entrepreneurial environment that has allowed the U.S. ICT sector to thrive and lead globally.

Ground Combat Systems (Formerly Land Domain, Land Combat Systems) Sept. 16, 2018

Land Combat Systems

Without argument, the global market for combat vehicles is on the rise. In both quality and quantity, the resurgence of state and multi-national threats has stoked demand for the development and delivery of modern weapon systems around the world. Furthermore, the increasingly rapid state of commercial technological innovation promises to answer that demand with increasingly capable defense applications delivered by both large Original Equipment Manufacturers (OEM) and non-traditional players operating in a highly competitive global market place. In 2016, the total military vehicle market is estimated to have earned revenues of approximately $35B for research, development and the procurement of new and upgraded weapon systems, delivering over 30,000 new and upgraded vehicles. By 2025, the market is forecasted to expand to over $45B in total annual revenue (6.6% Compound Annual Growth Rate) with the average price increasing at a rate of over 5% per year reflecting the high degree of technological advances resident in each system. According to Jane’s, over $443B will be spent on research, development, production, and modernization of military vehicles between 2016 and 2025. On average, innovation is incremental and accelerating, resulting in land combat systems that are increasingly more expensive to develop and fielded in decreasing time increments. Furthermore, the total number of systems is predicted to remain fairly steady as national preference shifts to quality over force structure growth as a means of countering rising threats.

Microelectronics (Formerly Electronics) Sept. 15, 2018

Microelectronics

The electronics industry, for the purpose of this study, is defined as the group of firms that engage in one or more aspects of the design, manufacture, testing, assembly, and packaging of microelectronic semiconductor integrated circuits (ICs). As a whole, the U.S. electronics industry is healthy. Many old and new firms have flourished thanks to Moore’s Law and market growth, despite industrial disaggregation consolidation and high entry barriers, particularly in manufacturing. Industry revenues have tripled over the past 20 years, and new semiconductor applications (e.g. cognitive computing, artificial intelligence) combined with growing markets in Asia portend an additional 50% growth over the next five years.

Autonomous Systems and Robotics (formerly Robotics and Autonomous Systems) Aug. 26, 2018

Robotics and Autonomous Systems

Robotics and autonomous systems (RAS) are poised to dramatically impact the concept of technological superiority, a primary source of national power. Vilified in the entertainment media, detested by labor unions, and declared, "more dangerous than nuclear weapons," by industry magnates such as Elon Musk, our culture is just beginning to see RAS as enhancing our lives rather than threatening them. But a tectonic shift in thinking in the last few years has placed RAS at the core of serious security and business strategies. When Advanced Research Projects Agency Network (ARPANET), the internet’s precursor, was created no one could envision the way we communicate, educate, entertain, and work today. The revolution with RAS and artificial intelligence (AI) will be even more profound. Machine autonomy will expand human capability in ways that we cannot yet imagine—but need to be ready for.

Reconstruction Aug. 22, 2018

Reconstruction

Despite our efforts to sustain global peace and expand prosperity, the world has been, and remains, an increasingly unstable place. In recent years the challenges of political instability, economic inequality, and environmental degradation have resulted in the largest migration flow of humanity that the world has experienced since at least the Second World War and perhaps in all of history. Whether people be fleeing persecution, seeking economic opportunity, or rebuilding after force majeure events, the demand for humanitarian relief and longer-term development assistance remains an immediate unquenchable thirst.

Maritime (Formerly Shipbuilding, Maritime Domain, Sea Domain) Aug. 21, 2018

Plotting a Course Through Dangerous Waters: An Analysis of the Shipbuilding Industrial Base, Policies, Risks, and Opportunities

As the United States settles into the 21st century, the 2014 Russian invasion of Ukraine and China’s one road, one belt effort mark the public reemergence of great power competition and refocus America’s strategic priorities. The ability of the US to project power, maintain freedom of navigation in the commons and deter aggression has never been more critical. “The revisionist powers of China and Russia, the rogue states of Iran and North Korea, and transnational threat organizations, particularly jihadist terrorist groups—are actively competing against the United States and our allies and partners.” As America’s strategic rivals actively attempt to undermine her instruments of power, a strong industrial base acts as a countervailing force to their efforts. The ability to field, man and maintain an effective seagoing force is fundamental to protecting the homeland, promoting American prosperity here and abroad, preserving peace through strength, and advancing American influence.