Fixing the Pentagon’s Broken Innovation Pipeline

Michael Horowitz, and Lauren Kahn

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In a world of rapid technological change and rising Chinese military power — as well as actors like Ukraine, the Houthis, and Iran gaining precision mass capabilities that can impose significant costs on the US military — there is broad agreement that the Pentagon must become far more agile in acquiring new military capabilities. What connects Ukraine’s recent daring strike inside Russia with Israel’s initial attack in Iran is the use of inexpensive, AI-enabled drones, a capability that warfighters, Silicon Valley innovators, and armchair strategists alike believe the Pentagon must urgently adopt and scale for the US military. So why hasn’t it happened yet?

Congressional Budget Dynamics Slow the Adoption of New Capabilities

Most discussions about the Pentagon’s need to move faster tend to focus on the role of senior leadership in advocating for and aggressively pursuing transformational capabilities. That’s true, but what’s less understood is Congress’s role. The relationship between the Pentagon and its congressional budget overseers, the appropriations committees, within the Planning, Programming, Budget, and Execution (PPBE) process often turns innovation adoption into a long, grinding battle even in the best of times. These committees line-edit the Department of Defense’s $850 billion budget down to the thousand-dollar level and tend to favor legacy capabilities, further stacking the deck against change.

Today’s Threats Demand Urgent Reform of the PPBE Process

While these challenges are well known, the urgent too often crowds out the important, leaving systemic reform of the Pentagon’s budget process perpetually sidelined, even as it continues to undermine efforts to adopt emerging technologies. But today could be different. Rapid technological change, the rising threat from China, and the arrival of a new Trump administration have created a rare window of opportunity to modernize how the Pentagon budgets for and acquires capabilities suited to today’s world.