Decades of deindustrialization, budget instability, and a complacency born of the post-Cold War “peace dividend” have left the United States’ defense industrial base in a fragile state, struggling to meet the demands of modern great power competition.
In a candid assessment of American military readiness, Kathleen Hicks, the former Deputy Secretary of Defense, warned that while the U.S. military remains the premier fighting force globally, the industrial machinery required to sustain it has atrophied. Speaking with James M. Lindsay on the Council on Foreign Relations’ podcast The President’s Inbox, Hicks detailed the systemic challenges hindering Washington’s ability to rapidly arm itself and its allies.
“We go 20 years not paying attention to something and then suddenly the problem is right in front of us,” Hicks said, describing the sudden realization of vulnerability following the invasion of Ukraine. “That’s a pretty good summation of what’s going on with the so-called defense industrial base.”
The Erosion of the “Arsenal of Democracy”
During World War II, the U.S. economy was dubbed the “Arsenal of Democracy,” capable of out-producing the Axis powers by utilizing the entirety of American industry. Today, however, that manufacturing capacity has significantly diminished.
Hicks emphasized that the defense sector cannot be viewed in isolation from the national economy. “It’s best to think about the defense industrial base as really just a reflection of the broader industrial base,” she noted. Consequently, the defense sector is plagued by the same shortages affecting the wider economy, particularly in skilled trades.
“We rely on the same talent base… skilled trades, welders are a great example, that are… where shortages plague the overall economy, we have the same problem,” Hicks explained.
This shortage is perhaps most visible in the Navy’s struggle to maintain its fleet. Despite a goal of producing two Virginia-class attack submarines annually, the industrial base is currently delivering roughly 1.2 boats per year. Hicks pointed to a strategic error made decades ago: “The United States from about 1960-ish… stepped away from the table” regarding commercial shipbuilding, allowing nations like Japan, South Korea, and eventually China to dominate the market.
Supply Chain Fragility and the Ukraine Wake-Up Call
The war in Ukraine served as a harsh stress test for the U.S. supply chain, exposing an inability to surge production of basic munitions, such as 155mm artillery shells. The interview highlighted that prior to the conflict, the Department of Defense (DOD) lacked deep visibility into its own supply networks.
“Most major manufacturers at the C-suite level… I found would be hard-pressed to know at their fingertips what their own supply chains were for an area like munitions,” Hicks said. Because munitions were not a high-profit area with steady funding streams, manufacturers kept capacity lean.
While recent supplemental funding has injected billions into expanding production lines, Hicks cautioned that these investments take time to yield results. “It is not as simple as pulling out your dollar, going to the vending machine, pushing the Snickers button and having it drop out the bottom,” she said. “If a policy decision is made today… that you want more… Tomahawk missiles… you have to think about everything that goes into delivering that… before you can have an expectation that it’s going to deliver right away.”
Innovation and the “Valley of Death”
A central theme of the discussion was the shifting nature of innovation. During the Cold War, the majority of research and development (R&D) was government-funded. Today, the commercial sector drives approximately 70% of R&D, forcing the Pentagon to adapt how it acquires technology.
Hicks highlighted the “Replicator” initiative as a blueprint for this shift. The program aims to field thousands of autonomous systems—cheap, mass-producible drones—to counter China’s military mass. This strategy focuses on “attritable autonomy,” leveraging commercial tech that is “safe for the service member” but expendable in combat.
However, bridging the gap between a successful prototype and mass production—a hurdle known in Washington as the “Valley of Death”—remains a persistent failure point. Hicks attributed this to a complex web of bureaucracy involving Congress, the executive branch, and the military services, all of which creates a system that prioritizes process over speed.
No Silver Bullet
Despite the challenges, Hicks rejected the notion that the situation is hopeless, pointing to the resilience of the U.S. innovation ecosystem and recent bipartisan legislative efforts like the CHIPS and Science Act. However, she stressed that fixing the industrial base requires a “yes and” strategy: maintaining high-end, exquisite systems like the F-35 while integrating low-cost, software-defined autonomous systems.
Ultimately, rebuilding American military capacity is a long-term project requiring sustained political will.
“There’s no silver bullet in solving the challenges that we face,” Hicks concluded. “The decisions that the United States made… to invest in other areas… were efficiencies, if you will, of their day… The effect of those choices is really what we see here today.”