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Event Recap: Northrop Grumman CEO Talks Defense, Public Policy at Penn

April 18, 2013
On Wednesday, students and other members of the Penn community were given a glimpse into the future of U.S. defense and the current public policy issues arising from the industry.

Wes Bush, the Chairman, CEO and President of Northrop Grumman, spoke to a packed Huntsman Hall classroom about the history of the defense industry, Northrop Grumman’s present day mission and technological advances, and the policy issues that will shape the industry in the coming years. In particular, Mr. Bush touched upon three imminent policy challenges that could seriously impact the defense industry, as well as affect the daily lives of Americans.

Wes Bush, Chairman, CEO and President of Northrop Grumman Corp., speaking at a Penn Wharton Public Policy Initiative event on April 17th.Wes Bush, Chairman, CEO and President of Northrop Grumman Corp., speaking at a Penn Wharton Public Policy Initiative event on April 17th.

Discussing Northrop Grumman’s James Webb Space Telescope project, Mr. Bush brought up a recurring policy problem: how much should the U.S. invest in new technologies, especially given current fiscal constraints? He mentioned the fact that “defense technology spending as a percentage of GDP has decreased from 1% at the end of WWII to between 0.25% – 0.35% today.” At the same time, other nations around globe have been significantly increasing the amount of their defense expenditures – leading to the greater question of whether the U.S. should ramp up its own spending or maintain its current trajectory.

As he pivoted to the more controversial topic of UAVs, or unmanned aerial vehicles (often referred to simply as drones), Bush dissected the equally divisive defense policy issue of whether or not the U.S. should be exporting certain military technologies to its allies in hopes of capturing a large portion of, in his example, the UAV market. Noting that the answer to this question is one not only of national security but also economics, he cited the example of the U.S.’s decision to not export satellite technology to its allies in the 1990’s. That decision forced other countries to invest in their own technologies and now many nations around the world have advanced satellite systems, though the U.S. controls only about a quarter of the market. With many in the defense industry viewing UAVs as the new satellites, this export policy issue is again at the fore.

Finally, Mr. Bush spoke about the ever-growing challenge of cybersecurity. With the U.S. government sustaining over one million cyber-attacks daily and with 16 critical infrastructures, such as financial services, transportation, chemical manufacturing, and defense, all built upon systems which were not designed to handle modern day security threats, the policy issue that needs to be addressed centers on current privacy restrictions that hamper information sharing. Further, he queried, how should companies and industries be motivated to make the necessary investments to increase security?

While he did not offer solutions to these policy dilemmas, Mr. Bush did spark the interest of those in attendance, as an engaging conversation took place after his presentation. Penn students asked questions about the impact of President Obama’s recent budget on the defense industry, the lack of customer diversification among contractors, and the “detrimental” outcomes that peace and the winding down of wars has on companies like Northrop.

Recognizing the general lack of exposure Penn students have to the defense industry, the Penn Wharton Public Policy Initiative was honored to host Wes Bush, who – keenly aware of his surroundings – made sure to note that Northrop Grumman is aggressively hiring during the current defense industry contraction.

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

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