Lambert: Space Industrial Base Needs A More Nuanced, Sophisticated Approach

Speaking of what he described as one of the seven pillars of a reformed industrial policy for space at the Department of Defense (DoD), Brett Lambert, Director of Industrial Policy at DoD, said that the former view of a monolithic organism is no longer valid and that “a more nuanced, sophisticated approach to industrial policy” is needed. At a recent event hosted by the George C. Marshall Institute at the National Press Club, Lambert gave the keynote to discuss the future of the space industrial base, with particular emphasis on its implications for national security.

Lambert said that “space is a unique animal” and that many of the assumptions that guide policies in other areas are therefore not valid. Acknowledging on the one hand the budgetary constraints of U.S. engagement in two wars, as well as the fact that “we are where we are” and not facing a clean slate, forces policymakers to look for realistic answers to the problems that continue to threaten an eroding industrial base. Those include the loss of critical skills in an ageing workforce, and the departure of second and third tier suppliers due to a lack of stability and policies that hinder their ability to compete globally.

This competition is not only a result of globalization, but of U.S. policies as well – “a lot of our wounds are self-inflicted,” said Lambert. This realization has spurred recent developments in export control reform, which many agree is one of the areas stunting the growth of the industrial space sector. But one key message of the discussion, underscored by the panel of experts who followed Lambert’s remarks, is that the public-private relationship involved with the industrial base is so profound that reform is needed not only to support the industry, but to benefit the country. Lambert described export control reform as “a very self-interested move” and not a gift to industry.

Far reaching reform will be complex, requiring that balance be struck between priorities in a constrained budget environment. One issue requiring attention is the need to spend more on research and development (R&D) so as to invest in the technologies that will make U.S. companies more competitive in the future. “The national security community is saying that it’s not an ‘either/or’ [situation]” between R&D and supporting ongoing activities, said Vincent Dennis of Deloitte Consulting. Describing this challenge, Hal Hagemeier of DoD’s National Security Space Office said that “the problem is you can’t schedule breakthroughs,” but that at the same time “we do want the ‘Beam me up, Scotty’-kind of technologies.”

Perhaps the biggest challenge is that no one can say for sure how effective reform will be in the short term. There is no data to show that there will be enough markets to sustain U.S. suppliers, or whether, once able to compete, buyers will choose U.S. products as opposed to sometimes cheaper foreign alternatives. The impact of industrial policy reform may only be felt after several years. On this point, Bill Adkins, president of Adkins Strategies, said that while there may not be immediate payoff, “as the technology changes perhaps the U.S. will be ahead” and the investments may bear fruit in the future.

A webcast of the event is available on the Marshall Institute’s website, along with its own summary.