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"Defense Supplier Base: Challenges and Policy Considerations Regarding Offshoring and Foreign Investment Risks.".

* GAO took on the double-edged sword of the global supply chain that produces the Pentagon's weapons, IT and components. It convened a panel of 13 experts who weighed in on the benefits and pitfalls of overseas suppliers.

They noted that offshoring can greatly reduce the cost of acquiring technology. Foreign investment in U.S. companies can also help them grow.

Of course, there are risks. Foreign investors can gain access to and spirit away intellectual property. U.S. skills and capacity can erode if too much is acquired overseas, and a supplier could cut off their inventory if geopolitics get in the way.

"Publicly available data do not provide the granularity to analyze foreign direct investment in industry subsectors that comprise the defense supplier base," the experts stated. That makes it hard to conduct high-level analysis of its impacts.

Many of the high-level technologies of interest to foreign adversaries are dual use, they noted. Companies and universities need to be made aware that what they arc offering could be targeted and benefit these rivals, the experts recommended.

Artificial intelligence, quantum information science, biotechnology and autonomous systems are most at risk, they noted.

By the Government Accountability Office

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Title Annotation:FURTHER READING
Comment:"Defense Supplier Base: Challenges and Policy Considerations Regarding Offshoring and Foreign Investment Risks.".(FURTHER READING)
Publication:National Defense
Date:Oct 1, 2019
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