The U.S. defense industrial base is facing an uphill battle. A 2023 report found that 64 percent of defense firms struggled to hire skilled labor. In late 2024, the national security advisor warned that the defense industrial base “we inherited was not up to the task that we face in a new age of strategic competition.”

In April, an executive order from U.S. President Donald Trump framed the problem in similarly blunt terms: Decades of offshoring, consolidation, and underinvestment have left the United States without the capacity and workforce needed for sustained military production.

The U.S. defense industrial base is facing an uphill battle. A 2023 report found that 64 percent of defense firms struggled to hire skilled labor. In late 2024, the national security advisor warned that the defense industrial base “we inherited was not up to the task that we face in a new age of strategic competition.”

In April, an executive order from U.S. President Donald Trump framed the problem in similarly blunt terms: Decades of offshoring, consolidation, and underinvestment have left the United States without the capacity and workforce needed for sustained military production.

This year, Pentagon and White House officials have enacted various policies to address this fragility, with Defense Secretary Pete Hegseth going so far as to call for a renewal of America’s “Arsenal of Freedom.”

While such efforts correctly state the urgency of reform, these actions will not solve a far deeper set of problems. The United States cannot build what it needs because it does not have the workforce, the factories, or the partnerships to do so.

Policymakers talk about “surge production,” “industrial resilience,” and “allies and partners” as cure-alls for the industry’s ailments. But these terms assume that the machines, tools, robots, and networks exist and have the qualified people to operate them. Too many policymakers treat the defense industrial base as a black box: Dollars go in, and parts should come out. But no one knows which factories have modernized, which are obsolete, which are staffed, and which are silently eroding.

We contend that three structural problems lie at the heart of this dangerous fragility in the U.S. defense industrial base. First, Washington lacks basic data on modernization. Second, the skilled-labor pipeline is collapsing. And third, small yet critical suppliers are getting left behind in the push for automation.

First, the data problem. For all the political momentum behind “repairing the industrial base,” the U.S. government can’t answer the most basic question about defense production: Which factories have actually modernized? Despite years of talk about automation, robotics, additive manufacturing, and digital integration, it has surprisingly little insight into where those technologies are deployed across thousands of defense suppliers.

This is not a simple oversight. It is a structural consequence of a multidecade-long trend of outsourcing production to an opaque, and often untracked, network of private firms. Over the past two decades, periodic efforts to map the industrial base have failed to build a comprehensive database, leaving policymakers without a reliable baseline to assess the system’s health.

Unlike major aerospace companies reporting quarterly earnings or semiconductor fabs announcing capacity expansions, defense........

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