Caption: US Army tanks on parade in Washington, DC, on June 14, 2025. Tanks are one key product of US military industrial base manufacturing. (Shutterstock/Volodymyr Tverdokhlib)

The 2026 National Defense Strategy (NDS) finally admits what has become painfully obvious: the American defense industrial base (DIB) is broken, and industrial power is once again at the forefront of great power competition. The NDS correctly frames production capacity, supply chain resilience, and manufacturing speed as central to deterring adversaries. In that sense, the NDS reflects a long-overdue shift from a post-Cold War mindset of efficiency to a great-power mindset of endurance, calling for a “once-in-a-century revival of American industry” through reshoring strategic capabilities and supercharging the DIB. 

While the diagnosis is accurate, the treatment plan is insufficient. The NDS comes across as overly aspirational, with exhortations to empower innovators, adopt artificial intelligence, clear outdated bureaucratic hurdles, and leverage allied production. It’s the right thinking, but it is not commensurate with the scale of the structural problem facing the US military. For instance, the United States has invested $4.9 billion in new munitions production lines since the Ukraine conflict began. Yet it fell short of its 2025 goal of producing 100,000 155mm artillery shells per month, achieving only around 40,000.  

It is clear that the DIB is no longer designed toscale for a high-volume conflict. After the Cold War ended, American industry built for efficiency over resilience, which minimized costs but limited the ability to surge production quickly in a crisis. Like many other economies, American industry became accustomed to just-in-time procurement with incentives embedded in contracting law, congressional budgeting, and private capital markets.

The result of three decades of this paradigm is a dangerous mismatch between high strategic ambitions and underperforming industrial realities. And still the NDS assumes that exhortation, pilot programs, and technological modernization can “supercharge” DIB systems whose core political economy is optimized for profit, not wartime.

If industrial power is a central pillar of military power, then supercharging the defense industrial base will require rewriting the rules that govern how capital flows into defense production, how factories are built and expanded, how dual-use technologies are managed, and how allied capacity is integrated into a single strategic manufacturing ecosystem.

The central failure of the US DIB is the misalignment of incentives.

First, there’s capital misalignment. Defense firms operate in a procurement environment that offers no credible long-term demand signal. Single-year appropriations, stop-start program funding, and constant requirements churn make it irrational for companies to invest in excess capacity, second-source tooling, or workforce pipelines that might sit idle. No company would build a new factory without long-term purchase guarantees. Yet the Pentagon expects precisely that from its defense suppliers. This has led to vulnerabilities like 900-day lead times for vital military parts and........

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