The U.S. 3rd Offset Strategy: An Opportunity for the ADF

On 3 September 2014, then U.S. Secretary for Defence Chuck Hagel delivered a keynote speech on innovation to the South-Eastern New England Defence Industry Alliance in Newport, Rhode Island. It was arguably the most important address of his tenure.  During his speech, Secretary Hagel announced the launch of his Defense Innovation Initiative (DII), the catalyst within the Department of Defense (DoD) for a major change in strategic direction. 

In his speech, Secretary Hagel acknowledged that the U.S. is facing a period of fiscal uncertainty of unknown duration.  The U.S. has recently endured the 2013 sequester and the threat of a Continuing Resolution looms in 2015. This, he observed, is occurring concurrently with long-term, comprehensive modernization programs being pursued by China and Russia and the proliferation of destructive technologies and weapons by numerous actors, many previously only available to advanced nations. 

This was the first time a senior government official publicly declared that the U.S. model of expeditionary warfare is being challenged, and that the DoD needed to take proactive steps to counter the proliferation of anti-access and area denial (A2/AD) capabilities. To lead this task, Hagel appointment Deputy Secretary for Defense Bob Work, a former Marine, to develop a 'new game-changing offset strategy'. It was the birth of the 3rd Offset Strategy. 

So what is an offset strategy? In its simplest form, it is part of a long-term competitive strategy that aims to generate and sustain strategic advantage. While not solely about technological approaches, they do tend to have a powerful technological focus. Offset strategies are about finding the right combination of technology and operational constructs to achieve decision advantage, and in doing so bolster conventional deterrence. This is best illustrated by the two previous offset strategies employed by the U.S.  The first was in response to the growing Soviet threat to Eastern Europe following the end of the First World War as Red Army numbers massively outnumbered Western forces in Europe. The Pentagon’s answer was to deter Soviet aggression through the deployment of nuclear weapons. The second occurred later in the Cold War once America’s nuclear dominance had been countered through the development of a Soviet nuclear arsenal. With nuclear parity, and the threat of mutually assured destruction, the focus returned to conventional deterrence. The U.S. response, the brainchild of the Secretary of Defense Harold Brown, was to establish dominance in the employment of conventional weapons through the development of networked, precision warfare (albeit under a nuclear umbrella).  

Both the 1st and 2nd offset strategies were successful examples of the deterrence effects of quality over quantity.  Given the proliferation of precision munitions globally today, Hagel’s DII is a challenge to America’s Defense enterprise to identify initiatives capable of countering this development. The 3rd Offset is therefore about providing the U.S. with a significant military advantage in a world of ubiquitous precision munitions.

In response to this task, Deputy Secretary Work implemented an oversight structure governed by a newly formed Advanced Capability and Deterrence Panel (ACDP). The ACDP is attended by senior leadership across the defense enterprise, policy and intelligence communities, the armed services, the Joint Chiefs of Staff, and research, development and acquisition authorities. The ACDP provides oversight for a number of agencies including the Long-Range Research and Development Planning Program (LRRDPP); an initiative hosted by the Defense Advanced Research Projects Agency (DARPA) to solicit ideas from across the U.S. defence, academic and industry organizations (coincidently the LRRDPP is a carry over from the 2nd Offset).  Having issued a request-for-information to identify system concepts that would have significant impact on the U.S. and its allies in the 2030 timeframe, the 3rd Offset appears to have settled on six areas of technological innovation:

  1. Counter A2/AD technologies;
  2. Advances in and repurposing of guided munitions;
  3. Investment in undersea warfare;
  4. Development of cyberspace and electronic-warfare capabilities;
  5. Advanced human-machine teaming where soldiers work with unmanned platforms; and
  6. Wargaming and testing of 3rd Offset Operational concepts.

A second key initiative by Work was the establishment of the Defense Innovation Unit Experimental (DIUx) in Silicon Valley. The DIUx is a deliberate attempt to expose Defense to novel innovation from sources traditionally not available to the DoD, with the ultimate aim being to accelerate the acquisition of this technology into the hands of men and women in uniform.

To acquire these new technologies, Secretary Hagel also tasked Under Secretary of Defense for Acquisition, Technology and Logistics Frank Kendall to review the DoD’s acquisition processes. With an aim to improve productivity, efficiency and effectiveness, Kendall reinvigorated his Better Buying Power (BBP) initiative.  BBP 3.0 contains 34 different initiatives aspiring to deliver greater affordability through the implementation of industry incentives, increased competition, reduced bureaucracy, improved acquisition contract services, and greater professionalism. These initiatives seek to improve acquisition efficiency through reduced product development time, and removing obstacles preventing greater use of commercial and international sources of technology.

Of particular interest to the ADF are the repeated calls from Secretaries Hagel and Carter for the involvement of allies. The call has suggested that the U.S. can no longer do it alone.  This sentiment is echoed by Deputy Secretary Work and is evident throughout the U.S. academic debate. Themes of allied collaboration in the development of operating concepts, mission-specific technologies and investments in future capabilities are common in public announcements by Work. He leaves little doubt as to his willingness to share the investment burden, encouraging allies to ‘push the boundaries of innovation’ and collaboration.

Given the DoD’s commitment to its Asian rebalance, Australia is well placed to benefit from the DoD’s willingness to collaborate on 3rd offset initiatives. The strength of the Australian-American alliance, the access Australia offers to Asia, and the current investment in recapitalization programs by the ADF all give the ADF significant currency in the 3rd Offset market place. Given the extraordinary appetite for ADF participation in sensitive and critical areas of capability development and analysis, unprecedented opportunities currently exist for collaboration at the tactical, operational and strategic levels.

Many of the themes of the U.S. 3rd Offset lexicon are being echoed in the ADF’s First Principles Reform (FPR); it is strategy driven; its about developing an integrated force; and its about streamlining the way with which we purchase military capabilities. There is currently an alignment of ADF and DoD interests evident in single service innovation initiatives (including JERICHO, Polaris, Mercator, or Beersheba), the SMART buyer initiative, science and technology research priorities, areas of operational analysis and wargaming, and joint force design and development of operating concepts. 

With aligned objectives and significant currency, the ADF has much to benefit from capitalizing on the opportunities that are currently available. Collaborative opportunity exists across a broad range of programs within the U.S. Defence enterprise providing genuine opportunity for the ADF to enhance the effectiveness of its future force and maintain high levels of integration with its principle ally. The ADF should seek to exploit these opportunities while available, adopting a proactive approach to partnership in the DoD’s efforts to define the next Offset strategy.

Wing Commander Phil 'Hog' Arms is the Deputy Director of Future Concepts, Air Force Headquarters

The views expressed in this article and subsequent comments are those of the author(s) and do not necessarily reflect the official policy or position of the Australian Army, the Department of Defence or the Australian Government. Further information.