BUILDING CAPABILITY 

FROM THE TECHNICAL REVOLUTION 

THAT HAS HAPPENED

Report of the Belfer Center Conference

on National Security Transformation

John P. White

John Deutch

June 2004
ii

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ISBN 1-58487-164-4
iii

FOREWORD

 For the past 5 years the United States has sought to transform 

its defense capabilities to refl ect ongoing changes in technology, 

management techniques, the American political and economic 

landscapes, and the global security environment. The terrorist 

attacks of September 2001 and the ensuing Global War on Terrorism 

provided stark and tragic reminders of the need for the such an 

adjustment. With American military forces engaged around the 

world in both combat and stabilization operations, the need for 

rigorous and critical analysis of security transformation has never 

been greater. Toward this end, the Belfer Center for Science and 

International Affairs at Harvard University’s Kennedy School of 

Government, U.S. Army War College Strategic Studies Institute, and 

the Eisenhower National Security Series cosponsored a conference 

on security transformation on November 14-15, 2003, which brought 

together top thinkers to assess this topic. 

The experts at the conference agreed that sustaining and 

adjusting defense transformation will pose major challenges in 

coming years. Given the numerous challenges America faces around 

the world, it must fi nd a way to transform “under fi re.” This report, 

by Dr. John Deutch and Dr. John White, former high-level defense 

offi cials, summarizes the discussions from that workshop. The 

Strategic Studies Institute is pleased to offer it as part of the ongoing 

assessment of the challenges and opportunities posed by defense 

transformation.

DOUGLAS C. LOVELACE, JR.

Director

Strategic Studies Institute 
iv

BIOGRAPHICAL SKETCHES OF THE AUTHORS

JOHN DEUTCH is an Institute Professor at the Massachusetts 

Institute of Technology. He also is a director or trustee of The 

Council on Foreign Relations, Resources for the Future, and the 

Urban Institute. From 1995 to 1996 he was Director of Central 

Intelligence. In this position, he was head of the Intelligence 

Community (all foreign intelligence agencies of the United States) 

and directed the Central Intelligence Agency. He previously served 

as Deputy Secretary of Defense and Under Secretary of Defense for 

Acquisitions and Technology. From 1977 to 1980, Dr. Deutch served 

in a number of positions for the U.S. Department of Energy. He 

earned a B.A. in history and economics from Amherst College, and 

both a B.S. in chemical engineering and Ph.D. in physical chemistry 

from M.I.T. He holds honorary degrees from Amherst College, 

University of Lowell, and Northeastern University. 

JOHN P. WHITE is Lecturer in Public Policy and Chair of the 

Kennedy School Middle East Initiative. He served as U.S. Deputy 

Secretary of Defense from 1995 to 1997, Deputy Director of the Offi ce 

of Management and Budget from 1978 to 1981, Assistant Secretary 

of Defense, Manpower, Reserve Affairs and Logistics from 1977 to 

1978, and as a lieutenant in the United States Marine Corps from 

1959 to 1961. Prior to his most recent government service, Dr. White 

was the Director of the Center for Business and Government at 

Harvard University and the Chair of the Commission on Roles and 

Missions of the Armed Forces. He holds a B.S. degree from Cornell 

University, and an M.A. and Ph.D. in economics from the Maxwell 

Graduate School, Syracuse University.
1

BUILDING CAPABILITY

FROM THE TECHNICAL REVOLUTION 

THAT HAS HAPPENED

Key Insights:

• Operations in Iraq and Afghanistan and the war on terrorism 

have slowed the pace of the transformation programs.

• The level of budgetary resources available to DoD during the 

next several years is uncertain.

• An urgent need exists for a new alliance system that includes 

some capability for interoperable transformed military forces.

• Transformed military operational capability has proven 

valuable for offensive operations, but not for defensive or 

security and stabilization operations.

• Greater reliance should be placed on achieving incremental 

transformational improvement from fi eld experiments than on 

more expansive new platforms.

• The long-term impact of military personnel on transformation 

and the new security environment deserves attention.

• Greater emphasis on transformation is needed for both the 

intelligence community and homeland security.

The second annual conference on defense transformation was 

held on November 14-15, 2003, at the Belfer Center for Science 

and International Affairs (BCSIA) at Harvard University’s John F. 

Kennedy School of Government. The conference brought together 

present and former defense offi cials and military commanders 

to discuss progress in achieving transformation of U.S. national 

security; the conference was sponsored, in part, by the Army War 

College and BCSIA.

The fundamental idea of transformation is that changes in the 

geopolitical environment and in technology require the United 

States to change dramatically its defense enterprise to meet the range 

of new national security threats. This transformation requirement 

affects both the Department of Defense (DoD) and all other agencies 

involved in national security. 
2

The discussion at last year’s conference centered on the 

implication of transformation for defense programs and doctrine. 

The diffi culty of achieving transformation was emphasized for 

fi ve reasons. First, the process is complex because it affects many 

different and fundamental aspects of the joint warfi ghting system. 

Second, changes always are resisted in favor of the status quo. Third, 

transformation must compete for both attention and resources with 

other priorities. Fourth, increased operations tempo over the last 

decade have placed increasing demands on resources, forcing the 

U.S. military to shift to what is being called “in stride” transformation. 

Finally, transformation is a journey, not a destination.

This year’s discussion was quite different even though the same 

concerns regarding the implementation of transformation were 

present. The principal difference was the recent experience of the 

war in Iraq. Experience from the war offers the opportunity to learn 

from operational success. 

Implications of the IRAQI FREEDOM Experience. 

Our offensive military operations were astonishingly 

successful in Iraq, providing many examples of the effectiveness 

of transformational capability: consider the situation of an Army 

Special Operations enlisted man on the ground relaying global 

positioning system (GPS) coordinates to a B-52 fl ying at 30,000 feet, 

for launch of a precision-guided joint direct attach munition (JDAM) 

bomb. Forces on the ground operated in a distributed manner and 

took advantage of the network to share information. A key advance 

was use of “closed loop” operations that greatly improved the 

command and control of forces. In closed loop operations, there is 

feedback between the commander and fi eld operations. Information 

on the network fl ows both ways: those in the fi eld acquire command, 

control, communication and computers, intelligence, surveillance, 

and reconnaissance (C4ISR) information for battlefi eld awareness. 

The results of operations are passed back to the commander who 

knows what is happening and thus knows how to direct military 

maneuvers. Effective communications to the lowest echelons are 

essential to maintain the control of a widely spread force. These 

operations proceed in all weather conditions and 24 hours a day. The 
3

campaign also demonstrated the ability of the forces to advance very 

quickly on the battlefi eld with both increased speed and enhanced 

combat effectiveness. 

Importantly, these capabilities are manifest in joint operations 

between land and air components. Truly integrated, joint 

capabilities―interdependence―were the norm between the air 

and ground forces. It was noted during the conference that joint 

operations of this sort were a major goal of the National Security 

Reform Act of 1986 (Goldwater-Nichols).

Although these capabilities yield tremendous advantages in 

offensive operations, the situation in defensive operations is not the 

same. IRAQI FREEDOM demonstrated the great diffi culty the U.S. 

military has in carrying out stabilization and support operations 

(SASO). Moreover, most of the senior military offi cers present 

thought that, regardless of the political party and its announced 

policy on peacekeeping, it was likely that the United States would 

continue to be involved in diffi cult peacekeeping operations similar 

to those of the past: Somalia, Haiti, Bosnia, and Kosovo. Thus, there 

is an urgent need to improve our capability for stabilization and 

support operations. 

A great deal of discussion occurred about current defi ciencies and 

ways to improve stabilization and support operations. All agreed that 

SASO should be an integral part of any combat and peacekeeping 

operations, and that it is a serious mistake to focus only on the 

offensive military phase of such operations. All acknowledged that no 

clear agreement exists about how responsibility for the stabilization 

and support (S&S) phase of a peacekeeping operation (which can 

last much longer than offensive military operations) should be split 

between the DoD and other government agencies responsible for 

public safety, health, infrastructure, and civil government. One 

participant noted that S&S is not an assigned mission and is without 

a concept of operations. Therefore, this individual suggested the 

creation of specially confi gured and trained military units for S&S. 

The group agreed that an interagency mechanism is urgently needed 

that puts together the resource requirements from the various 

agencies that are required for timely, effective, and integrated S&S 

operations. 

In sum, the success of the offensive military phase and the 
4

diffi culties of the S&S phase of the Iraqi operation have caused a shift 

in attitude about transformation. How capable the U.S. military and 

security establishment is at dealing with peacekeeping operations 

and combating terrorism and weapons of mass destruction 

(WMD) is of much greater concern than future capability for 

conventional military combat is. The emphasis shifts from “defense” 

transformation (meaning transformation that affects the military and 

DoD) to a broad “security” transformation. This change in emphasis 

highlights the need to create a vision of future U.S. capabilities that is 

broadly based and includes an understanding of the strategic intent 

of potential adversaries. 

Security Transformation Issues. 

Three issues were discussed: the nature of future alliances, 

intelligence, and homeland security.

The Trans-Atlantic Alliance Problem. By now all agree that serious 

problems exist with the Atlantic Alliance. Europe is divided into 

three different parts. First, the United Kingdom has a special 

relationship with the United States and was an active supporter of 

IRAQI FREEDOM. Second, France and Germany did not support 

IRAQI FREEDOM but are the two countries in Europe that have 

the economic strength to be major military powers. Third, the other 

countries, most relatively small, span the spectrum from negative to 

positive with respect to U.S. Iraqi policy.

The central question is how to build an enduring coalition 

with the Europeans―mainly France and Germany and similar to 

that achieved with NATO and the Atlantic Charter―that assures 

an alliance structure that will meet future contingencies. Ad hoc 

“coalitions of the willing” are a poor substitute for an alliance 

structure leading to common action. Certainly France, and maybe 

Germany and other European countries, seem to be ambivalent 

about whether a trans-Atlantic alliance or an independent European 

capability is the more important objective. For its part, the United 

States is not making a great effort to achieve a stable new alliance. 

So, in sum, it is not clear if an effective alliance structure will be 

available in the future to meet serious security threats, e.g., from 

North Korea.
5

One formulation that will not be an effective basis for creating a 

new alliance is “the United States fi ghts, Europe pays and provides 

police, and the United Nations feeds and rebuilds.” Such an admitted 

structural imbalance is certain not to be politically acceptable. An 

effective alliance between the United States and Europe requires an 

ability for them to conduct military operations together, including 

combat. But this in turn requires major improvement in European 

capability for interoperable military operations.

European military budgets―primarily in France and Germany―

are simply not suffi cient to provide forces as militarily capable as U.S. 

forces. The European approach appears to be an attempt to achieve 

some degree of parity by relying on a force structure with graded 

capability with only the most capable force elements enhanced to be 

fully interoperable with U.S. units, and without increasing military 

budgets. Whether this will be a successful strategy remains to be 

seen. 

The burden of ensuring an effective alliance does not fall solely 

on the Europeans. The United States must plan a positive and active 

role in creating intra-alliance capabilities. This means extending 

the transformation process to allies through active participation in 

multilateral transformation programs. 

In this regard, the planned NATO Corps is an important initiative. 

The NATO Corps is intended to demonstrate the integration of 

fully capable (for example, with respect to C4ISR, network-centric 

operations, precision strike, mobility) operations of joint air and 

ground European and U.S. military units. 

Intelligence Transformation. Signifi cantly improved capability is 

needed for intelligence about counterterrorism, counterproliferation, 

and support to military operations, especially during the S&S phase 

of a peacekeeping operation. 

• The 9/11 terrorist attacks demonstrated the shortcomings 

of intelligence cooperation between the Central Intelligence 

Agency (CIA) and the Federal Bureau of Investigation, and 

the absence of a coordinated intelligence effort involving 

foreign and domestic sources of information.

• The apparent great discrepancy about estimates of the WMD 

capability of Iraq immediately before the 2003 Iraqi war 
6

suggests that much greater attention is needed to enhance 

WMD intelligence.

• The military experience in Iraq indicates the tremendous 

improvements that have been made in providing near 

real-time intelligence on enemy force disposition and 

movements for military commanders. On the other hand, 

the mixed success in locating the senior al Qaeda leadership 

in Afghanistan and the senior Baathist leadership in Iraq, as 

well as the inability of intelligence to assure security in Iraq, 

indicates that improvement is needed to support the S&S 

phase of a military operation.

As discussed at last year’s conference, the intelligence community 

structure has evolved from a period when there were clear 

distinctions between security and law enforcement, foreign and 

domestic threats, and peacetime and wartime. The new threats blur 

these distinctions and raise questions about the need for realignment 

of intelligence responsibilities and authorities that will facilitate 

acquiring improved intelligence capability. Successful intelligence 

requires capability to collect information, to analyze objectively 

the information available, and to disseminate effective and timely 

intelligence and warning to decisionmakers. 

At this year’s conference, participants generally agreed that 

some realignment in intelligence operations was needed, but little 

consensus evolved on the best way forward. There was agreement 

that the modest steps that have been put into place to improve the 

integration of domestic and foreign intelligence, e.g., the creation 

of the Terrorist Threat Integration Center (TTIC), are insuffi cient. 

Even this security conscious group was concerned about how best 

to manage domestic surveillance while maintaining individual 

rights, and whether the congressional process was suffi ciently 

robust to provide the legislative action and oversight for the needed 

intelligence transformation. 

Intelligence related activities also deserve attention. One concerns 

the planning and management of information operations; a second 

the coordination between the CIA and DoD of covert action and 

paramilitary operations.
7

As discussed above, the military operations in Iraq refl ect 

an important transformation success: greatly improved military 

intelligence and integration of intelligence with other information 

supplied to combat commanders at all levels. Unfortunately the 

defi ciencies in S&S include a lack of current, actionable intelligence. 

Thus intelligence support for S&S operations requires increased 

emphasis.

Homeland Security. The establishment of the Department of 

Homeland Security (DHS) is the single most important step the 

government has taken to meet the threat of catastrophic terrorism. 

On the one hand, it is important to acknowledge how much progress 

has been made. Major new legislation has been passed, for example, 

the Patriot Act (despite its defi ciencies), in addition to the legislation 

creating the DHS. However, as the new executive branch department 

is composed of existing agencies taken from other departments with 

multiple missions, one cannot expect to have a smoothly operating 

bureaucracy immediately. 

The DHS still has a long way to go to achieve its basic objective: 

to protect the nation against further terrorist attacks through better 

threat analysis and warning, protection of borders, and emergency 

response. The working relationships between the DHS and other 

agencies―on the one side, the DoD; on the other side, civil agencies, 

such as Health and Human Services (HHS) and local police, fi re, 

and medical agencies, have yet to be fully defi ned. Indeed, the 

establishment of DHS has meant that DoD has been able to reduce 

attention to homeland defense. We should also recognize that DHS 

has less freedom of action than DoD, because the DHS’s work is so 

intertwined with other agencies, state and local governments, and 

the private sector. Our objective should be to assure that the capability

for homeland defense is systematically improved over time. In other 

words, the transformation of DHS’ numerous organizations is 

urgently needed. Future counterterrorism activities should be fully 

integrated across the department, akin to DoD’s joint operations. 

At present, DHS does not have the structure that is necessary to 

build these capabilities. It lacks an independent studies and analysis 

organization, the analytic foundation for determining a multiyear 

program, and a systematic decisionmaking process to match needs 

and available resources in a long-term plan. Achieving this planning 
8

and program execution ability will take a long time. Until then, the 

United States will not have in place a process to adopt a long-term 

resource plan for the many agencies involved in homeland security 

that will achieve the higher level of desired capability.

Defense Transformation Issues.

Conference participants noted that DoD can and should do 

more to support the transformation of DHS. Three issues were 

emphasized: the DoD budget, fi elding new transformation capability 

and technology, and personnel.

The DoD Budget Outlook. Participants discussed at length the 

outlook for the DoD budget. One suggested that recent increases 

in the DoD budget have allowed reductions in the backlogs of 

the readiness and maintenance accounts. This should allow more 

support for transformation programs if the budget growth is 

maintained. But the prevailing view was that, despite the recent, 

signifi cant growth in top line budget authority, there is signifi cant 

risk that resources available for transformation―the procurement 

and research and development (R&D) investment accounts―could 

decline. First, pressure for resources to support the extensive 

deployments in Iraq and elsewhere continues. This means operations 

and maintenance accounts will remain at high levels, and possibly 

grow. Second, these military deployments lead to considerable 

costs for the replacement and reconstitution of equipment that has 

experienced high utilization. These costs have yet to be recognized 

in the DoD fi nancial plan. Third, at the same time, the procurement 

budget continues to emphasize large, new platforms that will have 

a strong call on future resources. Fourth, the Congress continues to 

support other expensive programs in the DoD budget that compete 

with transformation programs, including health care and retirement 

benefi ts. Fifth, it is likely that if there is another terrorist attack on 

this country, DoD resources will be diverted to homeland security. 

A senior military offi cer noted that the resource allocation process 

is not only too slow but drives decisions and actions on its timetable 

as opposed to supporting timely transformation actions that need to 

be taken. 

Finally, knowledgeable observers note that the DoD budget is 
9

subject to political forces that push it down as well as up. Concern 

with the budget defi cit, the size of the U.S. military budget compared 

to all adversaries, and growing opposition to the Iraq war suggests 

that, after the election, the DoD budget direction may be down. On 

the other hand, one participant noted that DoD expenditures, as a 

percent of gross national product, remains at relatively low levels 

(although well above our European allies), and that there is ample 

room for DoD budget growth should the nation decide to increase 

its defense effort. The consensus was that DoD investment accounts 

were unlikely to be as high as currently programmed in the 5-year 

plan. The implication is that resources for new transformational 

military systems are likely to be limited. This raises new challenges 

for pursuing an aggressive transformation program.

The budget outlook presented by DoD with its FY04 budget 

request is summarized in the following table:

BA $ billion FY02 FY03 FY04 FY05 FY06 FY07 FY08

DoD Total 362.1 382.7 399.7 420.2 440.0 460.3 480.5

Procurement 61.6 70.0 72.2 77.2 84.3 94.7 104.0

RDT&E 48.7 56.8 61.8 67.1 64.3 64.6 67.0

Total Investment 110.3 126.8 134.0 144.3 148.6 159.3 171.0

Fielding Transformational Capability and Technology. The 

conversation about transformation programs continued the themes 

of last year. First was a belief that the association of transformation 

with modernization, i.e., new systems, rather than recapitalization, 

i.e., incremental improvements to existing systems, may have been 

a mistake. Transformation does not necessarily require the so-called 

“big T” action of adopting an entirely new system or platform. 

Great improvements can be realized by “little t” transformation, 

where improvements are made by adapting and modifying existing 

systems. The advantages of “little t” transformation are lower cost, 

faster time to fi elding, reliance on the ingenuity of fi eld units, and 

avoiding big bureaucratic programs.
10

An important implication of the “little t” approach is that 

improvements can come through innovation from joint units 

or service units that are in the fi eld trying new equipment and 

procedures. Experiments in the fi eld are important and should be 

encouraged (and supported) by Joint Forces Command (JFCOM). 

Innovation in the fi eld has the advantage that it is accompanied 

by training and concept development. This approach is entirely 

different from the Joint Requirements Operations Council (JROC) 

process that mirrors the interests of its Services and favors new 

platforms at the expense of incremental improvements. 

The acquisition process established in the mid-1980s was 

designed to deal with the procurement of platforms and not to 

stimulate incremental improvements to legacy systems. In a very real 

sense, the existing DoD acquisition structure limits change. 

The Importance of New Technology. The military transformation 

we seek is made possible by advances in technology that have 

already occurred. DoD’s task is to move from technical possibility 

to military capability. The best example is exploitation of advances 

in information technology to provide greatly improved C4ISR 

capabilities through better business practices and reliance on 

cheaper commercial products and services. Many assume the 

technology will best be “inserted” in military forces by a top down 

approach. This may be true for some large systems, such as satellite 

collectors, but it is not universally true. For example, the DoD labs, 

created for the purpose of technology transition, are widely judged 

to be incapable. 

Experience suggests that much can be gained from an approach 

that relies on “demand pull” from a joint commander who has a 

mission need. Today’s all volunteer personnel are likely to be more 

at ease with new technology than their seniors, and their increased 

technical facility should be leveraged. 

A few technologies stand out as especially needed for today’s 

new missions:

• UAVs and space based radar for persistent surveillance;

• Information operations, both offense and defense;

• Storage and retrieval of information ― data mining;

• Tagging for tracking, identifi cation, and forensics;

• Space control;

• Biochemical defense.
11

The Importance of People. The effectiveness of the U.S. military in 

combat operations depends on the competence of the all-volunteer, 

professional U.S. military force. The experience, training, and 

readiness of enlisted personnel and noncommissioned offi cers enable 

military operations that exploit technology and rely on agility. All 

senior military commanders and defense offi cials believe that the allvolunteer force should be retained. It has been a great success over 

the last 30 years and is essential to military transformation.

Presently, no evidence suggests weakness in the all-volunteer 

system. In Iraq, military personnel performed superbly. Recruitment 

and enlistment rates have been at high levels ever since the September 

11 terrorist attacks. 

But managing military personnel is an essential element of 

transformation, and some reason for concern exists. First, the long 

troop rotation times and continued casualties in Iraq may affect 

reenlistment rates and indirectly push the military to a garrison 

strategy. Second, the dependence on reserve forces for many S&S 

functions means that reserve units will experience longer call-ups 

than previously, and this may in turn reduce retention in reserve 

units. Third, the cost of military personnel continues to escalate, due 

to congressional action on both military pay and benefi ts. Fourth, 

as the economy improves, the increased diffi culty of maintaining 

high quality accessions that was experienced in the 1990s may 

reappear. Finally, innovations in personnel management such as 

pay for performance and fl exible retirement options have not been 

adopted. 

Conclusion.

The second annual conference on national security transformation 

confi rms the usefulness of an annual appraisal by knowledgeable 

security specialists of progress on achieving different elements of 

transformation. But the conference also demonstrated that changing 

geopolitical circumstances and consequent national security 

concerns shape which aspects of transformation capture the most 

attention.