Unrestricted Innovation: The Supply Chain Battlefield

Hi, I'm Matt Flugh, the Irregular Warfare Initiatives General Counsel and Co-Director of the recently launched Irregular Warfare Initiative Economic and Legal Warfare Project. And I'm Kyle Atwell. I'm the co-founder and chair of the board for IWI. We are excited to announce the launch of a new initiative at IWI, the Economic and Legal Warfare Project. This project is not about open conflict or classic power struggles. It's about wielding influence and leverage through balance sheets, components, asset seizures, and the strategic use of policy and law. It's economic and legal warfare. This new project will bring together stakeholders from across government, the private sector, and the research base to analyze how nations and other actors use financial tools, legal methodologies, and political influence to achieve their goals without firing a shot. Through the Economic and Legal Warfare Project, we are building a community to drive public dialogue to articles, events, and podcasts, and to promote a more effective use of national resources. To get involved, check out the Economic and Legal Warfare Project website, which you can link to from the IWI main website, found at www.irregularwarfare.org. Again, that's www.irregularwarfare.org. We are proud to provide this resource for the national security community. Now without further delay, here's the latest Irregular Warfare Podcast episode on the topic of technology innovation. Enjoy the show. China was using some of its supply chain as a mechanism of control to start to control who is doing what. Is it inevitable? Was it inevitable that all those components were being made in China because they were being invented in China? So our enemies, particularly China, not only believe but knows in their hearts that they cannot compete with us in a sustained drawn out projected conflict. That is deterrence. Welcome to the Regular Warfare Podcast. I'm your host, Don Edwards, and my co-host today is Teal Reynolds. In today's episode, we examine how supply chain vulnerabilities and innovation ecosystems intersect with national security and irregular warfare. Our guests begin by exploring how adversaries leverage economic statecraft through supply chain control, particularly in drone technology. They then discuss the missing middle, the critical gap between innovation and industrial scale production. Finally, our guests offer insights into DIU's evolving role in bridging commercial technology with defense needs and building resilient supply chains with allies. Dr. Fiona Murray is the William Porter Professor of Entrepreneurship at MIT Sloan School of Management and the Vice Chair of the NATO Innovation Fund. Her recent research examined supply chain vulnerabilities in defense technology and their strategic implications for national security. John Griffin serves on DIU's government engagement team for the autonomy portfolio and as DIU's Boston lead. A retired Marine Corps Lieutenant Colonel, he brings extensive experience in defensive innovation and strategic planning to his current role at DIU. This episode was recorded in August 2025 prior to Doug Beck's departure as Defense Innovation Unit Director. The DIU is currently under the leadership of the Honorable Emile Michael, Acting Director and the Honorable Mike Dodd, who serves as Acting Deputy Director. You were listening to the Regular Warfare Podcast, a joint production of the Princeton Empirical Studies of Conflict project and the Modern War Institute at West Point, dedicated to bridging the gap between scholars and practitioners to support the community of irregular warfare professionals. Here's our conversation with Fiona Murray and John Griffin. Fiona and John, welcome to the Regular Warfare Podcast. Thank you for having me. Yeah, thank you very much. Excited for the conversation today. So Fiona, this podcast is actually about your recent article with Edlyn Levine, which actually opens with the powerful image of a soldier holding a drone with a caption, nearly all components are made in China. What prompted you to investigate the supply chain vulnerability? So Edlyn and I had been very interested in innovation in drones and we were really trying to understand the way in which the innovation activities that were happening in Ukraine right at the front of the battlefield, the rapid experimentation and so on, how that was taking place. As we started to unpack some of those activities, the lessons learned from the innovation ecosystem that was really coalescing in Ukraine on the battlefront, we recognized that while innovation was in very large supply, the thing that was actually in short supply were the components in the supply chain. As we started to unpick that, it became incredibly clear that when you want to have your capacity to innovate and to build new sorts of drones, you've obviously got to be able to have access to all the components you need. And that over time, those components were both being in short supply. Many of them we knew were coming from China, we also recognized that China was using some of its supply chain as a mechanism of control to start to control who was doing what. And so we then stood back and said, look, first, can we map the supply chain? Can we do what I would call an anatomy of a drone, take that drone apart, understand its component parts and understand where those things come from? And then that prompted us to a second question, which was the question of, is it inevitable? Was it inevitable that all those components were being made in China because they were being invented in China? As you know, the real punchline of the paper is the geography of the supply chain of drones is not inevitable. Many of those components were actually invented in the United States and by US allies, including Europeans and Japanese. John, we had Raj on our show last September, but I know DIU has evolved significantly since then. Can you tell us more about that evolution? So I think many of us know that DIU was founded in 2015, 2016 under the inspired vision of Ash Carter and his vision was to help bridge the gap between the Department of Defense and the private sector, particularly on the commercial side, because they were far out investing us in research and development. We've evolved a lot since then dramatically. When we first got our acquisition authorities under the OTAs and our different program managers and created our signature process called the Commercial Solutions Opening, that began to rapidly deliver capability for hardware in less than two years to the services and the warfighters. And because of our success rate of transitioning capability at a rate of greater than 50% per CSO, we are now elevated to a position where our boss, Doug Beck, as the managing director of DIU, reports directly to the Secretary of Defense as the senior innovation advisor in the department. That's not an insignificant role or comment. He has the equal authority of an undersecretary just with a separate title. And now what we are doing because of that role in positioning, when DIU looks to support the Department of Defense, our clients and customers are the four stars. We're in direct support of the combatant commanders, and we're in direct support of the service chiefs. And we are looking to use our process to make a strategic impact. And if you look at our mission statement, the critical piece within our mission statement is like any good DOD partner, right? We nest in support of our boss. And so what we are trying to do is we're trying to influence old plans right now. More importantly, we are trying to deter by delivering that capability and put it in the hands of the warfighter now. So we don't have to fight. But if forced to fight, those warfighters are positioned to win. So DIU is now at the very strategic level contributing at that level. Thank you, John. And I'd actually like to get into one of the main comments in Fiona's article, because I actually believe that it will lead into how DIU can contribute to some of the vulnerabilities that are identified. So Fiona, can you actually walk us through by what you mean in the term you use called missing middle and how it impacts technological advancement? Yes, absolutely. So when we did the analysis of drones and the drone supply chain, drone innovation in Ukraine, we basically think developed three key lessons. The first is that the role of innovation in warfare is extraordinarily important. And it's increasingly that innovation comes from entrepreneurs working very closely with the warfighter at the front line, supported by really thoughtful investors with important government partners. The second, though, is that the supply chain is absolutely essential. The supply chain matters, the industrial base, to put it in more traditional language. And it's not just its existence, but also the geography and the capability of those supply chains. And I think the third lesson really was the fact that those two things are coupled. Innovation without the industrial base and supply chain can be very hard to deliver on a continuous basis, either to the warfighter or in any other kind of long term situation that requires that sort of resilience. On the other hand, if you decoupled, didn't have innovation, the supply chain would be providing you with yesterday's solutions. And so it's the coupling between the two that was extremely important. And the question then becomes what couples those things. And it's obviously the goals and the aspirations of the innovators, knowing that they want to be able to make things at scale. It's also the requirements that are put on them by the governments. And this is, I think, where the work of the IEU is so important to saying, actually, you need to have a resilient supply chain that is domestic or is with partners and allies. And then the third piece that I think is perhaps the most important is the capital. And the missing middle is largely a missing middle of capital. What has happened traditionally is that we've invested in some of these really high growth potential, high aspirations scale up ventures. We provided that early stage venture capital for those companies. And when they've been developing software, it hasn't really mattered that they can effectively scale incredibly rapidly. I mean, think about Palantir and others. But when those companies are developing hardware, traditionally, they might use minimum amounts of capital to kind of tap into low cost supply chains. But if we really want to build out the ability to produce things at scale, we have to be able to finance those. And so that missing middle is a capital gap, providing the sort of middle amount of capital that is both later growth stage venture capital. It's also capital for manufacturing, its supply chain capital, right? It's the ability to have debt to build new factories and so on. And so for us, that missing middle is really a capital gap. But it's a gap of the whole stack. It's not really a gap in early stage venture capital. It's actually a whole series of sorts of financing that we need so that the innovators can also connect very deeply to the industrial base. That's really interesting. Finding the ability to gain capital to start these ventures is extremely important. John, I actually want to talk to you about the different offices that DIU has. I know that they are in Silicon Valley. They're in Boston. They're also in Austin, Texas, as well Chicago. How does DIU leverage these innovation hubs to identify vulnerabilities and then potential solutions for supply chain fight? Yeah. So I think part of who we are and what we do is that when Ash Carter originally founded us as DIUX, he put us in Boston and Silicon Valley for the deliberate reason of getting away from the Pentagon and the traditional way of thinking and acting and engaging the larger defense innovation ecosystem. So having offices and what we are in the process of also launching is called on-ramp hubs as part of a larger geographical strategy for DIU. And if you think about having offices and on-ramp hubs across the nation, in many ways, what it is is the physical manifestation of the mission of DIU, which is to accelerate the commercial growth of the defense innovation ecosystem in order to deliver that capability to the end user. But by being outside the Pentagon and being in places like Boston and Silicon Valley where there's a high VC investment focus and happy to dive into that more if you're interested, that's where we can help attract early investments to these startup companies and to these mid-sized companies that are having success. But having a regional presence is core to having this multifaceted, integrated approach where we're plugged in to the entire ecosystem from good ideas in a college classroom all the way up to delivering effects by the combatant commanders. I think it's extremely important. I remember actually the day when Ash Carter came and opened the DIU office in Boston, I had the privilege of being there because at the time he had an affiliation with Harvard and with MIT, which we were tremendously proud of and pleased about. And I think being present in an ecosystem is extraordinarily important because it allows you to bring together some of the smartest individuals, have them put in front of the sort of problem-rich environment that is really the set of capability needs and challenges that the warfighter has and start to understand the needs of the investors in those sorts of companies. But there's a fourth piece that I think is absolutely essential, which is being present signals a long-term desire to write contracts and to actually buy things. And one of the ways we get the capital into that missing middle is to make a real commitment to contracting, not only to signing them but helping people figure out which office they have to go into and with what in their hands to actually even be legitimate sort of potential providers to somewhere like the Pentagon. So I think actually being physically present in these key ecosystems not only allows you to do this early stage innovation piece, but then actually start to make sure that these companies scale up. And I think DIU has been super important in that. Yeah, and I would love to just continue on this thread with you, Fiona, about like Boston and having a great relationship with you and MIT and organizations like that. And this is not a win-lose, right? It's about to discuss what Fiona's talking about. I think that there's facts and statistics out there that Silicon Valley and New York lead quantitatively in VC investment, right? But to Fiona's point, in Boston, our defense innovation system is we build stuff. I think that's what distinguishes us as a dual use innovation ecosystem more so than Silicon Valley, you know, that's profit aligned, that's looking at absent software, and New York tends to focus on fintech. Nothing wrong with that. But relative to this conversation, right, if you think about like the Boston ecosystem, we're focused on robotics and advanced manufacturing and we're focused on life sciences and biotech, right? Things that the DOD can use, not to mention like the deep density of tech talent that exists here because of institutions like MIT, they're global leaders, not just local domestic leaders. And so if you have 400,000 college students in the state, in a very defense friendly state, because we have amazing governors who recognize that they want to create a good regulatory system in order to encourage defense investment in building stuff, in building things, then this inspires all of our venture capitalists, all the people who live here, the entrepreneurs, the innovation ecosystem that exists right here in Boston, to contribute in a meaningful way, right, by investing capital, by building things, by manufacturing. So I love that, Fiona, thanks. Pleasure. But I think we're very proud of the ecosystem that we are able to pull together with very mission focused individuals. And we start to see that in other locations. I know you have your office in Austin, Texas, you begin to see some of those pieces of the puzzle, as you say, as well as Silicon Valley. And I think we are seeing some of those hints of these kinds of ecosystems, particularly with that focus on deep tech, some of that more physical technology, also starting to bubble up in Europe as well, and really sort of take some of that Boston playbook as well. Yeah, 100%. And that's what I think back to the on ramp. That's why Congress has tasked us to help stimulate in these smaller regional hubs across the nation. Yeah, John, actually, I wanted to expand on something that you talked about with regards to Silicon Valley. So a few years ago, a book came out called The Kill Chain, you may have heard of it, and Christian Bro actually talked about resistance from Silicon Valley, or tech companies to get involved with defense. And it was actually less about policy or the social implications, but mostly about the lack of return or lack of money that they can get by working with defense. I'd imagine this may be more true for creating solutions that actually support non conventional operations. Is this something that you've seen in your time at DIU? What I sense is I really love Christian Bro's book. Whenever we have interns that come work for us right through the Boston office or autonomy, it's one of the first books I give them, because it's the problem we're trying to solve. And I think he does a really good job highlighting the fact that we are where we are, not because bad people got us there, not because people made bad decisions, good public servants, we're making good decisions all along to try to help figure out a way to bring national security. It just turns out it created this huge bureaucracy that moves really slowly. So going out to Silicon Valley, again, Ash Carter's decision to go there, I thought was brilliant. Because I think what people in Silicon Valley forget is that Silicon Valley started because of the Department of Defense. The history of them is because of the DOD. And so going out there, and it's fine. If they want to go in a different direction or they're hesitant to do that, I think that's okay. But you have places like Austin, Texas, and Boston, Massachusetts, who are very focused on dual use. And there is a lot of money. And I think that's what's really cool about the region here in Massachusetts too, is I think in some ways, if you look at our history, we'll brag that the nation started here. And I think there's a real patriotic fervor that exists within this region. And so if we can inspire people to think about innovation and entrepreneurialism is a form of patriotism, is a form of service that you don't have to put on a uniform to contribute to national security. I hope you make billions. And I have nothing to gain from that economically, except better national security and better national defense. So I'm not judging people who choose other paths. But I think if you look at the dual use environment, because of how we've evolved in partnering with commercial tech, there is plenty of money to be made here. And I admire those who choose to do so. John, just to build on that, I think that today we're in a very enviable position, particularly in the US, that some of our most talented innovators and entrepreneurs want to take on the defense, security, and resilience mission. They put that front and center. I think that is somewhat new. I mean, it's changed dramatically in the last decade. And I think there are at least three reasons for this. I mean, the first is that people just didn't know much about some of the problems and challenges. They weren't aware, you know, there was sort of a wall between what was going on inside the Pentagon. Many entrepreneurs had very little connectivity. I think as wars have come to, you know, the front page of the news, people have a much deeper understanding. I think the second is that some individuals didn't think that that was a good way of being patriotic. And I think we've seen that sort of sense of what it means to be patriotic change. We've seen that in the US and we've seen that in Europe very, very strongly, Europe more recently. And I think the third is that it just wasn't very good business. So I could learn about the problems I could be patriotic. But if I was an entrepreneur, it didn't seem like a great market. And most investors have said, you know, to see a very, very far away from the government. John has described the reasons, I think, why that's true. But our government in the US is working incredibly hard to be more user friendly, to write these kinds of contracts and DIYs on the front line. And I'm seeing the same set of lessons being learned from the United States, people trying to be more user friendly, set their requirements, not as narrow requirements, but as problem statements. I'm seeing that in the UK's Ministry of Defense and the German Defense Department, you know, Poland, Estonia, all across Europe and Singapore, and with our other allies. And I think that's really important because we start to then see this huge sort of amount of novel technology of deep tech potentially solving some of these essential problems. So John, it sounds like DIU is positioning itself as a partner of choice potentially due to the ability to manufacture domestically. As DIU works across multiple technology portfolios, you mentioned supporting combatant commanders and service chiefs. Can you expand on how you provide this support to the end user or more so dive more into these solutions and innovations? Yeah, so a lot to unpack and a little bit of follow on to what Fiona was just talking about too. You know, one of the Pentagon superpowers is to resist change. But that's why I love working at DIU on so many levels because we're positioned to help, you know, encourage change. I think it's some ways that we are looking at the way we can influence and affect change. DIU is now having conversations with partners across the Pentagon, you know, like-minded people, right? And we have a kind of a best athlete kind of mentality now, like whoever's the best at it, let's go for it and support each other. But I think from a global context like Fiona is talking about, what we're doing now is we are recognizing, you know, more so than ever, not only the value of commercial tech here in the US, but commercial tech globally. And so I know program managers who when we open up a solicitation, like they're literally flying to Norway and England and Israel and Australia to see the tech that's available to them, because there's so many powerful layers to building up those partners and alliances and not just delivering the best technology. But as I think about the manufacturing space specifically, what I'm hopeful is that when Ash Carter first founded us to build bridges with the commercial sector, he identified that we should be a fast follower. We can no longer be in the lead. And that is a cultural change for the department, right? To think about being a follower. We pride ourselves on being leaders. So what I'm hoping is in the manufacturing space, we recognize that we have to be fast followers to the manufacturing industry as well. And one way that DIU is doing that, and again, this is early, so it's an early change to culture, but we just launched the Blue Manufacturing Initiative. And what the Blue Manufacturing Initiative tries to do is really try to solve two problems for us. First, it's certainly going after the macro fragility of the supply chain and the defense industrial base, right? We need to be optimized to be more efficient, because we're only good at delivering production in the near term, or like Fiona's article, we're awesome in a crisis mode, but we need to be better in the middle. So the bigger problem that we're trying to solve with Blue Manufacturing is the difficulty of scaling a new hardware company, because it takes a certain amount of engineering skill and design and vision and inspiration to build a prototype, to build something that's attractive to the DOD. The challenge is when the DOD finally agrees to buy something, we say, that's great, we want a thousand. And that's what Blue Manufacturing is trying to do, right? So think about it, if you're a founder and you have a bunch of engineers who are working together, the harder challenge then is how do you scale, right? Because maybe they could build five, but you can't build a thousand in that space. And even Elon Musk, when he talks about Starlink and he talks about Tesla, he will even say that building the prototype is easier than building the manufacturing system to bring all of those components and parts together in a way in which we can scale. So what Blue Manufacturing is going to do is we are going to build trusted partners here in America and with our international partners. So the services who are partnering with those founders and small vendors know they can go to these advanced manufacturing partners to work with them. And they know that we will have research and identified any supply chain risk. We'll know we've vetted them from foreign ownership. They'll know that they have quality certifications and their systems meet the qualifications for production. They know they're properly meeting the cybersecurity posture in order to be put onto the networks. So we're going to build this network of partners that now when a service looks to a company and says, yeah, we want to buy your thing and they're not in a position because they don't have a manufacturing capacity, we want to build trusted partners. We can immediately pivot to it in order to meet that demand signal. There's a really important piece about this, if I may say, about scale. When you ask yourself, why is it that China has control of so many of the supply chains of the key components of a drone, particularly these first person view, these FPV drones? I think the thing to understand is that those drones were traditionally used by hobbyists. They were technologies that were almost like new electronic toys. And so what happened was that as DJI was building those, they were able to take advantage of the enormous consumer electronics supply chain and manufacturing expertise that was being built up in Shenzhen for something that had nothing to do with the military base. It had everything to do with consumer electronics. And we've seen the same thing with electric vehicles with EVs. We've seen the huge economies of scale that China has been able to get in its battery production, allow them to come down cost curves and ultimately to innovate. And so what happens is that you actually have to try to develop large markets for some of these technologies if you want to be able to sustain an industrial base. And so I think that the DIU work is importantly about making sure we have trusted partners that are vetted, they aren't vulnerable. But the other piece of the puzzle is to make sure that we have some selected technology solutions that those are potentially adopted both in the defense side, but in the civilian side, so that we can start to build up the domestic demand signals, which will then allow us to really support our industrial base, either within the US or with the US and allies. And so it's that scale piece that China has done extremely effectively. And that's, I think, a really important piece of the puzzle that John's talking about. Yeah, thanks, John. And Fiona, for that, I guess the key lesson that I want to pack here is understanding how your stakeholders provide capabilities and how you're able to leverage those. So now that we've talked about kind of the high level manufacturing environment, now I actually want to discuss the impacts that this has on irregular warfare in detail. So Fiona, you mentioned Chinese FPV drones in your article, you actually discussed how China controls competition through long term economic policies. To me, this sounds like unrestricted warfare doctrine in practice. How does your research change our understanding of what constitutes an act of war? Countries, I think, have traditionally thought rather separately about economic growth as an extraordinarily important output or something that they want to provide for a nation and defense and national security. I think today what we've seen is those two things are extremely closely coupled. And so economic security becomes something that countries are aiming for. We've recognized it's not enough just to be able to produce the technologies of war, but that we have to produce the solutions that allow us to maintain this level of energy security and so on and so forth. And I think what that means is that we then use economic statecraft, these various tools of our economy to actually allow us to defend ourselves, but also sometimes to use those as offensive tools, offensive weapons in a state of war or as a deterrent. And so I think what we're beginning to see is a set of solutions that are really focused on industrial policy. They're focused on supporting our industrial base, making sure that that industrial base is really as resilient as possible, making sure that we understand what are the market drivers, the market signals, without becoming a command and control economy, what can we do to shore that up? But then on the other hand, there's a sort of foreign policy piece and sometimes that can be tariffs that people choose to use, but it can also be right down in the weeds of how we're actually deploying our supply chains, whether or not we are cutting off those supply chains from our adversaries, we're building our own to be stronger, or we're manipulating them in some way. And so the economic infrastructure, if you like, the infrastructure of our economy, our supply chains are definitely a place for both the offensive and defensive side of national security. John, in line with that, in a regular warfare, we talk about protracted struggle. And right now, China is executing a decades-long campaign. How does DIU, with its 12 to 24-month timelines, fit into countering this generational strategy? So I touched upon a little bit earlier, I'll reinforce it here. I think that if we build a system that we're delivering capability to the warfighter within 12 or 24 months, that has a compounding effect as someone who believes that they want to contribute to national security and fill in those patriotic values, and as a former service, because they're contributing in a way that wasn't available to them before, because they perceive that the only way to serve was to be in uniform. But I think when I talk to founders, I hope they get rich, because my children will then have an equally good world as the one that I was grateful to be born into. But I think what we do then is we reduce the barrier of entry, and that in and of itself has a compounding effect in order to inspire and incentivize more people to follow this dual-use pursuit. Because like Fiona was talking about, the economic competition is a lever of national power. And I would think all of us, I hope all of us, would rather stay in a competition that's economic and not get into a military conflict. So what I'm hoping is that through this exponential effect of constantly delivering capability to the warfighter and promoting the different startups and companies who are now making a difference, and they're making a profit, and they're contributing to the talent retention, and they're doing workforce development. I hope that's a story that inspires us in the same way like I was inspired as a young elementary kid, and here and about the great age of discovery. Because I think it's those of us who are sitting in those classrooms who are like, I want to go to the moon, I want to go to Mars. Yeah, I mean, those people weren't perfect. But I think if we were to create that type of environment today, we're pursuing dual use technology, following your own path and dreams, but contributing to national security. To me, that's deterrence. That's not like Fiona's article talking about, we have this missing middle and we only surge during a crisis. This is not like waking a sleeping tiger. This is we are the tiger, and we want to stay there. And I think having that type of economic leadership globally with our allies and having the strength of our defense industrial base, so our enemies, particularly China, not only believes but knows in their hearts that they cannot compete with us in a sustained drone outprotected conflict. That is deterrence. And that's how I think we contribute at a generational level, even though our product is designed to deliver in 24 months. Yeah, I mean, one of the things that really is mentioned a lot is the curiosity difference between the US and West versus China, and the ability for us to tap into that curiosity throughout our entire workforce. Because Israel actually recently weaponized supply chains offensively against Hezbollah and the pager and the walkie-talkie attack. So from DIU's perspective, how do you assess this to a risk of both using denial as well as access for potential infiltration of our systems as we seek to employ more companies? Yeah, it's complicated. I think it explains why for so long, the DOD just had a bunker mentality. We have to own and control everything because that's the only way we can ensure that we're safe. When in fact, that's the opposite. And you know this from a regular warfare, the population is the center of the gravity. You have to get out and about. You cannot be hidden behind your own walls. So I think then what we are doing and we're doing better at, again through programs like Blue Manufacturing or Forge or Blue UAS or a number of the AI initiatives, is relying on commercial technology. But again, it's this ecosystem of people who want to do well for Western values. And so if we can help then de-risk the people who have nefarious actors within their either supply chain or their ownership when they have like hidden fake companies in their supply chain, they're on the Russian list. There's all these reasons that we can illuminate a supply chain and that is friendly. It doesn't mean it doesn't come with risk. But I think by understanding that what's at stake is not just profit. I'm not trying to overstate that, but what's a competition is like the global liberal Western value system that promotes a system where we can encourage people to pursue profit and pursue noble and honorable efforts. I think what's really important here is that we actually understand where our supply chains are and who controls them. Until very recently, we really have had very, very limited visibility into those things. Obviously, large corporations have spent decades learning how to manage their supply chains very effectively, but they've been looking at them largely from the perspective of efficiency and productivity. I think when we start to put the lens of economic statecraft onto them, we need to understand them both in terms of access and disruption on the one hand and denial to others of access so that they are more secure. But they also need to be secure in financial terms and they need to be secure from a cyber security point of view. That mentality that says we must look at the wiring diagram of our supply chains worldwide is essential and again, not something where we've particularly paid a lot of attention. It's particularly difficult for early stage startups who are trying to move very, very rapidly and they are impatient to get their product into the hands of the warfighter and so on. Particularly if we're capital constrained, they're going to do whatever is most efficient. Putting this supply chain lens onto what's going on to make sure that we have trusted supply chains. Much as we think at the NATO Innovation Fund, we work carefully around trusted capital sources, making sure that we don't have adversarial capital unwittingly coming onto the cap tables of our startups. It's very much, I think, the same mentality here. Dr. Murray, how do you help executives at MIT Sloan understand their role in preventing adversaries from exploiting supply chains and their responsibility toward national defense amid today's geopolitical tension? Certainly as we're educating this next generation, both of undergraduates, 20-something year old business school students, mid-career executives, one of the things that we're increasingly doing is bringing a dialogue around geopolitics into the classroom. We think it's absolutely essential that this next generation of leaders really understand the geopolitical dynamics, the central importance of economic security, and really the role of economic statecraft in actually shaping both the opportunities and threats to their business. The way that we're starting to talk about this is to have them really understand the threats and opportunities in the supply chain. Is your supply chain vulnerable? How should you think about it? Where are you locating your supply chain? For the same discussion with respect to capital, where is your capital coming from? Is it secure? What are the unintended consequences of taking capital from potential adversaries? Then the third piece of this puzzle, I think, has to do with where are the ideas and the talent coming from? If you're a company making an acquisition, how do you understand where that talent is? How do you think about the geography of your organization? We're trying to make it really clear to that next generation that they need to understand this from a purely pragmatic point of view, but they also need to understand it from a philosophical point of view. As individuals trying to support their businesses, they're also being supported by their nations. We want to make absolutely sure that they have the right geopolitical calculus and framework to make these really difficult decisions throughout their careers. A school like MIT, especially their MBA program, is going to have a large international population lot from friendly countries. Dr. Griffin, I actually have to put this question to you. How does DIU actually work with allies on supply chain issues? Can you give us an example of successful friend-shoring in action? This might be a situation where they're taught something at MIT and they go back to their home country and now we can engage in some type of friend-shoring agreement. Yeah, I think that the work that Dr. Murray and her team are doing at MIT go a long way from not only supporting the education of the future generation of leaders, but they have a number of programs that are educating our senior leaders right now to understand emerging technology, particularly in AI, but all these other spaces on the supply chain security that she just illuminated. That's a really helpful program. I just want to put it out there that in so many ways they're contributing to our national defense right here in Cambridge. I think to your question, Don, I think that we are absolutely assisting with the development of non-traditional capability in partner nations. A brand new program that we just launched recently is working with AUKUS. What are we doing? The DIU signature process is the commercial solutions opening. As an example of working with our critical partners through Pillar 2, we launched a CSO looking after one singular capability, but all three countries were competing and contributing to it. That hasn't happened before. I think in some ways, the great work that Fiona is doing at NATO and thinking about the standardization of collective work across that alliance, AUKUS, while not a military alliance necessarily, we're looking at, well, how do we bring those three countries together and not only bring them together because of the strategic value and impact of that. What we're doing then is right to your question about supply chain. We're opening up the creativity of the commercial market of three advanced nations to go after one particular dual use technology. We allow them to compete. Competition is healthy, particularly in a friendly environment. I think it's working with partners in AUKUS. That's a specific example recently. The larger strategy for DIU, and I gave a lot of credit to Doug Beck for bringing this into DIU, is what we also do is we embed DIU members into the combatant commands themselves, not LNOs. The DIU members in the combatant commands are working for the combatant commander. Since our customers and clients are those four stars, that we are then looking at ways, well, how can we run challenges with Singapore? How do we support the president's initiative in India? DIU then creates those and facilitates and helps those relationships by going after the dual use commercial tech and bringing those markets together and bringing the creativity of our partners. It's not just based on DOD in US. John, just to give you an additional example of that, NATO Diana, the Defense Innovation Exhubration of the North Atlantic, is a brilliant example of allies putting forward challenges that are relevant to all of them into pulling in that demand signal from the NATO system, and then calling on all of the allies within NATO to identify startup companies that might have interesting possibilities and interesting opportunities. Then the best of those is selected to go through a network of accelerator programs, and they can select whether to be in one of the two US sites, potentially do their program in Poland or Estonia or elsewhere. That's a really brilliant example of drawing in that early stage ingenuity from across the alliance and working in that sort of partnership. I also just want to commend the fact that there are DIU embedded individuals in the UK. I know that threats really appreciate that, and vice versa. I think they always have fun when they're in London and out at the front lines with some of our colleagues. I think that there's quite a lot of that opportunity to really make sure that we draw in allied talent, expertise, capital, and supply chains. Yeah, it's brilliant feeling. I'll just brag on you and us for a little bit, because you're just more of a pro as an educator. But if we talk about NATO, Diana, MIT helped develop the curriculum that was delivered to that cohort, and then DIU is a sponsor. But we talk about how do you bring this community together? There's an example of DIU working with NATO, working with MIT. But one of the local delivery partners was Mass Challenge, which is a global accelerator here in Massachusetts. So I think it's a way to highlight some specificity also within what Fiona was sharing about when you bring partners, like-minded people, from across the world together, we can take on big solutions and big problems. It's extremely topical, actually. Quite recently, NATO and Diana put forward a set of challenges that were focused on some of the issues of operating the Arctic. So with the real focus on that high north as a new area, both of direct potential conflicts, but also gray zone conflict and so on. So you can really see that it's a mechanism that allows you to move quite quickly. And of course, we might anticipate that there are US innovators and entrepreneurs, but also those from Norway, Sweden, our Canadian colleagues. And so it's a brilliant example, I think, of being able to move in a quite agile way towards future possibilities. And some of that, of course, is really brought about, in fact, by a different form of supply chain, which is the opening up of the Arctic of the Northwest Passage and so on. That our supply chains, just the movement of goods, is going to really change. And that is going to present both opportunities, but also huge risks and vulnerabilities. Thank you both for that. So actually, we'll now transition to the conclusion of this conversation. And John, I'll start with you. If supply chain control is the new domain, or a new domain in regular warfare, what doctrinal changes do we need? So I'm going to pick apart the question a little bit, and then I'll talk. So I think if we have a reliance on doctrine, we'll never get anywhere. Right? Doctrine comes last. I think what we need to do is we need to have an environment and a culture that is willing to lean forward, that is willing to partner, that is willing to do new things and experiment and fail. And then we learn from that. And I think DIU is particularly positioned to do that and to help facilitate this type of momentum in a number of different ways. So again, in one of our projects, as potentially an example to get to this point, is called FORGE. And FORGE, what we're trying to do is it's an experiment with advanced manufacturing to solve production bottleneck problems. And in this case, for high performance aeronautical systems. So what we're looking to do is we're looking to print a number of different parts and pieces to contribute to what's causing some delay in this bottleneck. Well, that means that we have to make sure that we're meeting the parameters and the productions and the qualifications of all those things. And we have to prove that we can do this in a way that now not only creates more systems for our services, but it's going to illuminate in many ways, like what are the challenges, right? Because FORGE will not be perfect. We're going to run into policy barriers. We're going to run into production issues. We're going to run into industry limitations. But by illuminating all of those challenges with this one particular program, we will be successful in printing parts for them. But I think it's going to open up this opportunity of where else can we go and do amazing things in order to be creative in the marketplace and again, be a fast follower from the manufacturing supply chain. Or I find out where our partners and allies are better at it than we are. But I think, as you know, from all of us who've been in uniform, if you wait on doctrine, I think we're still debating caveman warfare. John, if you could pull all the levers of creativity and innovation at DIU, essentially King 4-a-day, what specific authorities or resources would you prioritize first to address these challenges? Oh, what a dangerous King 4-a-day question. So let me just pick one. I think we are very grateful to be in a position that we're in. I think there is no doubt that this administration is looking to be disruptive, to move fast, to help change the culture and the mindset and the processes of things that we're doing. And DIU, right? Because of our history and those who have come before me, have put us on the map and put us in a position where we are a key strategic partner for the secretary in order to make change. We're getting increased budget because we are successful and we are transitioning capability at a rate and pace where others could not. One of the most recent advances, the coloration of money, right? Which for some, you understand the different colors of money within RDT&E. But we receive what's called like BA6.8, right? Which allows us the flexibility to invest money where we want. It gives us tremendous flexibility on where we put money. I think what would be amazing is if we could use 6.8 money to get after this challenge itself, could we use 6.8 money then to invest in manufacturing, in support of those startups and those companies that are trying to scale because they have a scale problem? I think Andaroll is the model right now. But yet Andaroll didn't start here. And that's an important lesson, right? They had a number of successful contracts that that finally gave them the capability not only in capital, right, but in workforce and in talent and understanding how to build manufacturing design systems, which is way more complicated than the product itself. So Andaroll is the example. So I wonder now if the IU could get money as part of the initial OTA contract to also fund manufacturing capacity in order to accelerate and scale. That's where I would try to go. Thank you, John, for your King Ferdig response. But Fiona, I'll give you the last word here. What are your top three policy recommendations for rebuilding economic security? I believe that means that I get to be queen for the day. And so we might as well continue in this rather regal fashion. I think if we focus on the need around economic security, not only for innovation, but this coupling of innovation to industrialization and to continue this theme of rebuilding our manufacturing base and the related supply chains, I think the three things that are going to be important here. I agree with John, we actually need to be able to pay for some of this manufacturing, not just in a kind of cost plus, make the product and I'll sort of pay for it at the marginal cost. I need to have really creative ability to provide some capital into building out deep manufacturing expertise. I think that's the first thing from a policy point of view and finding the right mechanisms to do that both within the Pentagon, but in other government departments who are big buyers and purchasers is going to be essential. I think we need to make sure that in our contracts, we have opportunities to actually price the things that matter. So we're able to do that. We buy the kinds of capabilities that we need as end products, but we don't always price those inputs. As I'm particularly struck by the arrangement that's recently been made in the Pentagon around NP materials and having a committed offtake price for some of the critical minerals and the magnets and some of the input technology. So I think we need to continue to be really willing to price in policy terms the resilience that matters. And I think the third thing I'd say is we have to signal that the composition, the geography and the resilience of our supply chains matter. We need to put that into practice. And if we do all those three things, if we actually support some of the manufacturing, if we price some of the resilience of the key inputs, and if we actually insist upon the mapping and the understanding of the supply chains, then I think that the capital markets tend to follow. We will probably need additional capital instruments that actually help us with that. But that would be a fourth thing. So I'm going to hope that our capital markets follow if we can get those other three pieces right. I think that will go a very long way to supporting economic security, particularly in this intersection between innovation and industrialization. Fiona and John, thank you for joining us on the Ray Lorrefer podcast. Thank you very much for having me. It's been an absolute pleasure having this conversation, really thought provoking and looking forward to being a continuing listener and fan of the show. Yeah, Don and Teal, thank you again for setting up this conversation. I always love it just being in the room with Fiona, where I actually just makes everyone feel smarter. But to your audience, I never take these moments for granted that I have something actually worthwhile to say. And the fact that you're listening to it, I hope that for all of you walk away with at least one golden nugget. I hope you understand this strategic competition a little bit better today. And if you are had a golden nugget coming out of this, then I'm going to qualify that as my success ratio. And again, I'll continue to be a big fan of this podcast because you are having really hard, challenging conversations and you're making us all better. So thank you. Thank you again for joining us on the regular warfare podcast. We release a new episode every two weeks. Our next episode will explore partisan warfare in Ukraine with Lieutenant General Andrew Rowling and John Armstrong. Be sure to subscribe to the regular warfare podcast so you don't miss an episode. The podcast is a product of their regular warfare initiative. We're a team of all volunteer practitioners and researchers dedicated to bridging the gap between scholars and practitioners to support the community of a regular warfare professionals. You can follow and engage us on Facebook, Twitter, LinkedIn, YouTube or Instagram. 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