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The U.S. Military Has a Plan to Make Sure Russia and China Can't Win a Great Power War

America’s military-technological advantage, an aspect of its strategic power since the end of the Cold War, is eroding. In response, the Pentagon launched the third offset strategy in 2014—a department-wide effort to find new ways, both technological and institutional, to leap ahead of its competitors. In a new report for the United States Studies Centre, I argue that for the US the third offset is partly an answer to matching its stagnating defence budget with its strategic ambitions.

As Washington concentrated on fighting wars in Iraq and Afghanistan, Beijing (and Moscow) invested in advanced missile technology, satellites, intelligence and reconnaissance assets, and networking capabilities. That has allowed China and Russia to employ anti-access and area denial (A2AD) strategies that have raised the cost and risk to the US if it decides to intervene in a conflict close to those countries’ borders. The decreasing effectiveness of American forces in a high-end conventional conflict may also have an impact on Washington’s credibility with allies in the region.

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But A2AD strategies are only one part of a broader set of challenges the US faces to its continuing military superiority. Another is an emerging great-power competition over strategic technologies. Access to technical and scientific innovation is proliferating. China is investing heavily in an effort to create new national industries in artificial intelligence, quantum computing and robotics, and it’s building up an advanced defence industrial base. It is also making significant reforms to the People’s Liberation Army, shrinking its size and strengthening its logistical and support capabilities in an effort to fight and win ‘local wars under informationised conditions’.

Further, technological funding and innovation have shifted from government labs to the private sector, particularly in critical technologies like artificial intelligence. The increasing focus on dual-use technologies, investments in new start-ups and technical talent reflects new areas of geostrategic rivalry. This trend has even been evident in Australia, particularly in the higher education sector.

Finally, the cost to the US of maintaining its lead is growing. This is occurring along two fronts. First, the US’s existing platforms and capabilities are unable to adequately and cost-effectively defend themselves in a ‘salvo competition’. Second, Washington is likely to continue to face budget caps that will hamper its ability to compete with China on a platform-for-platform basis. This is evident from the range of priorities that are competing for limited resources, including nuclear modernization, army procurement programs and military readiness.

Rather than a single strategy, the third offset is more accurately described as a set of three interrelated efforts. The first involves placing bets on current and future technologies that will, in theory, allow the US military to maintain its ability to project power into contested environments. The second looks to some of the new technologies, like AI, unmanned systems and solid-state lasers, to permit the US to economically compete with great powers and simultaneously maintain its global military posture. The third effort involves reforming and building on the way the Pentagon procures and develops new technologies to take advantage of private-sector developments.