U.S. Must Enlist Pentagon in Industry, Inman Says : Economy: Defense chief nominee has pushed for shift toward military support of civilian high-tech research.

“The framework for U.S. national security is changing,” a leading advocate for a new national defense policy wrote recently.

Rather than worry only about itself, he wrote, the Pentagon must now start ensuring that the country’s civilian technology base is strong too, yet its policies “are increasingly at odds with successful commercial practices.”

Those are fighting words at the Pentagon. Military planners have long resisted attempts to force them to try to help the nation’s civilian economy while they are planning and developing new weapons systems.

But the Pentagon brass may have to think twice now. The words were written by Bobby Ray Inman, the retired admiral and business executive just nominated by President Clinton to be secretary of defense.

Inman is widely considered to be a leading advocate of an aggressive national industrial policy as a critical instrument of American foreign policy. His nomination may bring radical change to the inbred ways in which the Pentagon deals with American industry, analysts say.

The founding chairman of an industry consortium created to help U.S. computer firms compete in the world market, Inman has written frequently on the need for the Pentagon to reform its procurement and contracting procedures to support civilian technological research and development programs that would have broad benefits throughout the economy.

His views already have had a significant impact on the Clinton Administration and Congress, where they helped persuade lawmakers to restructure the Defense Department’s research and development arm into an agency designed to fund both civilian and military projects.

The Administration has sought all year to emphasize the links between national security and economic security issues. Deputy Secretary of Defense William J. Perry leads a cadre of Clinton appointees at the Pentagon who share Inman’s views, but some analysts say they believe that outgoing Defense Secretary Les Aspin was not aggressively pursuing such a strategy.

“What Inman will bring to the Pentagon is the notion that national security can no longer be defined or based simply on military capability, but on the strength of the civilian industrial base,” said Daniel Burton, president of the Council on Competitiveness, a private think tank.

“He is acutely aware of the fact that in the future, international influence will flow from economic power. I think he is the first of a new kind of secretary of defense who understands that we will have a new way of thinking about national security in the future,” said Burton, who also co-authored with Inman several magazine articles linking military and economic issues.

Indeed, when his nomination was announced Thursday, Inman hinted at how seriously he thinks about economic issues. He volunteered that he had voted for George Bush for President last year “even though I was mad at him about his handling of the economy.”

Inman added that while the media had focused on his background in U.S. intelligence agencies, his business background in the high-tech industry will heavily influence the way he approaches his new post.

Inman’s career path seems suited to an era in which economic and military strategies begin to converge. After a stellar naval career, Inman rose to head the super-secret National Security Agency and later became deputy director of the CIA in the Ronald Reagan Administration.

His years in the military and intelligence gave him a unique understanding of high-tech’s role in national security; his business career that began in the early 1980s gave him a look at the other side as well.

In 1983, he became the first chairman of Microelectronics and Computer Technology Corp., a consortium of computer firms based in Austin, Tex., that was set up to help U.S. companies pool their research work on new computer technologies.

The consortium was one of the first American efforts to counter the Japanese onslaught in high-tech industry and was viewed by many economists as a model for U.S. industrial policy.

Inman has held a strong interest in the Pentagon’s role in technology issues ever since, encouraging the few government officials during the Reagan-Bush era who were willing to campaign for a U.S. industrial strategy.

Robert Costello, former undersecretary of defense for acquisition in the Reagan and Bush administrations, recalled that Inman once publicly introduced him as “the United States’ only answer to MITI,” Japan’s Ministry of International Trade and Industry.

Costello said he was ultimately forced out of his post during the Bush Administration for being too aggressive in advocating a stronger linkage between defense and economic strategies.

“I’m sure he (Inman) thinks government has a role to play in industrial policy, and I’m sure he will help define that role because he realizes that (the Defense Department) can and should be a major player,” he said.

In the past, the military often played a critical role in helping propel the development of new technologies that had important commercial spinoffs, but the gulf between America’s civilian and defense economies has widened gradually as technology has advanced.

The Pentagon has highly specialized needs from its high-tech suppliers, but critics now argue that highly structured military specifications for its contractors have isolated the Pentagon and its industrial base from the broader economy.

What’s more, the desire to protect funding from the prying eyes of Congress and budget-cutters within the executive branch has given Pentagon managers and their suppliers a big incentive to make the contracting process as complex and arcane as possible.

“If I want to control my program, I want to build a cocoon around it so there would be minimal review,” Costello said. “But the Defense Department and its industrial base can no longer afford that isolation.”

In fact, that practice has proved costly to the Pentagon in areas dependent on leading-edge technologies, where the defense sector now often lags behind civilian industry.

“The Defense Department has lost its technological leadership,” Inman said in a recent article he wrote with Sen. Jeff Bingaman (D-N.M.).

Yet he warned that the advanced commercial technology base “has become less and less accessible to the Department of Defense . . . because of the rapid growth of the commercial sector and because of complex military account and procurement policies.”

Inman’s solution dovetails with the Administration position on the issue: He wants to open up the defense Establishment to encourage and fund joint research projects with the civilian economy. Clinton calls that his “dual-use” technology policy.