Nick Beim

In the Cold War, when the Cold War started to really heat up, so with the Korean War in particular, and with Sputnik, we put a huge national effort into innovations.

We created DARPA.

We created STEM education in the United States.

We

made all sorts of changes to try to avoid that sort of technological surprise in the future.

But as the Cold War, you know, wore on and when the Cold War ended, we sort of sat on our haunches a little bit and we weren't as aggressive in adopting new technologies as we should have.

And

The result is now China is trying to develop a more capable military, primarily by trying to leapfrog us in the area of applying advanced technologies to their military and to their intelligence.

And I think we now have a lot of urgency in this area, but we've got a lot of work to do.

It's interesting.

So on counter drones specifically, there are a lot of approaches that are being experimented with.

both sort of in the lab, so to speak, and on the ground in Ukraine, like working with Ukraine.

But I think generally there is a part of the military revolution that we are not currently well-suited to execute on, and that's low-cost hardware.

You know, if you look at the margin structure in the business model of traditional defense primes, it's cost plus.

They charge a very large amount for their hardware systems.

And they bundle services with these systems, whether it's an aircraft, a radar system, whatever it is, a ship.

But the action going forward is going to be in a lot of these low-cost systems.

And they don't see enough margin for that to fit their current business models.

One might say their business models have to change.

I think more likely you're going to get new players.