This report addresses the critical issue of allocating resources to deal with current and future discontinuities in the security environment. For the Defense Department, strategy is fundamentally about making choices as to how limited resources can best be used to provide for the nation’s security. One of the most difficult choices is between apportioning resources to deal with current challenges confronting the military, or devoting them instead to creating novel or even revolutionary military capabilities that address emerging challenges. To help strike the appropriate balance between these two options, this report provides a framework for thinking about investment strategies at a time when the United States is at war, and facing the need to transform its military owing to the likelihood of significant shifts in the character of the military competition. The first section of the report addresses how the competitive environment has dramatically changed since the Cold War’s end, and notes how the Defense Department’s existing investment strategy is ill equipped to address these changes.
The report’s second section explores a number of investment strategies that may be profitably pursued under conditions of existing or emerging discontinuities in the character of conflict.