Dr. Paul Bracken has an unusual answer to those wondering what the biggest innovation engine in the United States is.
During his lecture at Stevens Institute of Technology on April 22, Bracken, a Yale professor of management, said the defense industry — particularly the small and midsized companies in this space — is in the driver’s seat, thanks to a Pentagon that realizes the importance of innovation’s role in “producing a primacy for the United States, both in business and in war.”
Bracken’s talk went past the idea of cyber attacks and drone strikes, instead focusing on technology’s disruptive impact on how the military thinks about strategy as a whole.
Bracken, a Philadelphia native, was speaking as part of Stevens’ Heath Lecture Series, the twice-annual seminar hosted by the business school. In his remarks, Bracken noted he almost applied to Stevens when he was considering where to go to school, especially given the schools “incredible” proximity to New York.
“My basic argument is pretty simple: IT has transformed one industry after another,” Bracken said. “IT is transforming — disrupting, if you will — the Department of Defense, and it is dramatically changing the Pentagon.
“We have more technologies coming online today in the military than at any time,” he added. “It’s not just that cyberwarfare is a big deal, and drones are a really big deal — it’s that you have all these technologies with enormous national security implications, and they’re all coming on at the same time.”
When considered in the wider world, with nuclear weapons and tension between nations, technology is “causing fundamental change in the U.S. defense industry,” he said.
Technology ‘racing ahead of strategy’
In his welcoming remarks, Dr. Gregory Prastacos, dean of the business school at Stevens, called Bracken “one of the top-rated executive education teachers in the world.”
“Professor Bracken is a leading expert in global competition and the strategic application of technology in business and defense,” Prastacos said. “His reputation, and his ability to shed some light on some of the implications of innovation in this sector, make him a natural fit for our speaker series.”
Bracken leads Yale’s new MBA core course on problem framing, which has received global recognition and has been copied at other institutions. Meanwhile, his Managing Global Organizations course — a signature Yale class — draws nearly 300 students.
In addition to his work at Yale, Bracken does consulting work for private equity funds, accounting, and insurance companies, as well as the U.S. Government. He also leads business war games for companies facing complex new problems, such as the future of European asset management and strategies of technological competition with China.
In his lecture, Bracken often compared the inundation of innovation in defense with the post-World War II and Cold War period of the 1950s, when Silicon Valley — a product of the Pentagon — was churning out all kinds of interesting technologies a few hundred miles from the Iron Curtain.
“In the 1950s, people looked at these technologies, and they had no idea what they meant or how to use them. So there were intellectual vacuums inside the U.S. government and the Pentagon about how to handle these technologies,” he said. “Technology today, like the 1950s, is racing ahead of strategy. We don’t know where this stuff is going. The Air Force understands drones, the Navy understands submarines, but nobody puts these individual elements together into a national strategy.”
That’s what think-tanks and experts will have to focus on to make sense of a digital defense strategy, Bracken said.
“What happens if you add the technologies together?” he asked. “For those of you studying business and technology management, one of the important things you can learn is to combine things and see how they relate.”
By way of example, he considered pairing two technology innovations — automatic license plate readers used by municipal police on the road and the facial recognition software used to detect terrorists at major events — that could create, as he put it, “a really good system for targeted killings.”
Lessons from the Cold War
Much of what the United States considers from the viewpoint of defense and innovation dates to the ’50s, also, when “a whole new set of methodologies — which you are studying in your classes — were invented to get at this problem of the national strategy and technology.”
That strategy was used to decide which innovations to pursue, by considering how the purchase of such technologies could be used to extend national security. This sort of thinking takes into account both technologies that are reliable and useful, as well as whether investment in one could scare other countries into escalating an arms race.
In the 1950s and ’60s, “people put a lot of thought into these frameworks,” Bracken said. “We haven’t started looking yet.”
For Bracken, the question of whether the United States could pilot a drone into the Kremlin is the wrong thing to focus on. “The real question,” he said, “is what systems will help improve U.S. security, not just kill or disrupt the bad guys?”
Volume of innovation
The challenge is the sheer volume of innovation being churned out by the defense industry now. Bracken traced the creation of Silicon Valley — and a second such innovation hub, in northern Virginia — to the Pentagon, which he called the “mother of all VC funds.”
In part, that’s because the Defense Department’s vast budget allows it to pursue high-risk projects that no private enterprise can afford to research; Bracken said the development of the integrated circuit, transistors, jet aircraft, space satellite communications systems and the Internet are a result of the Pentagon’s aggressive innovation.
From a strategy perspective, the challenge in replying on the largest defense contractors, like Lockheed and Boeing, to supply innovation is that in many cases, they’re too big to do so. That’s created an interesting business problem, he said, as the big players turn to smaller companies to research, develop, test and evaluate innovations.
By way of example, he pointed to the F-35 plane, which he described as both a fighter jet and a “flying computer network” linking pilots to intelligence on the ground. The technological wonder, he said, is “the most outsourced plane in history,” with 70 percent of it outsourced to small and midsized companies building the complex computer network. The biggest companies, he said, no longer have the expertise in house to develop such systems.
“One of the hottest things going on in business schools right now is the study of what you keep in house, what you source from outside, how you make that decision and what it has to do with the corporate bottom line,” Bracken said. And along with that is the intellectual property equation of such technology, he added: “Can I keep it, or will small companies use this to grow and attack my base? This is one of the most fascinating areas of technology management.”
About the Heath Lecture Series
The Heath Lecture Series is named for Stevens alumnus A. Roy Heath, who believed virtues like honesty, loyalty and teamwork are as essential as technical prowess when managing technical enterprises. Speakers in this series exemplify the leadership traits Heath considered crucial for success. Past topics have examined the role of leadership in creating a positive impact at major events and the advantages of collaboration in solving problems in health care. For more information, visit stevens.edu/howe/heath.
Top, center: Paul Bracken discusses the disruptive impact of innovation and technology breakthroughs on the Pentagon and the way it thinks about strategy.
Below: Students, faculty and guests listen as Bracken discusses the 1950s, a time similar to today, in terms of the amount of new technologies making an impact on defense and security.