America's Wired Warrior

The military is stepping up its investment in cutting-edge technology that uses electronics to thwart the enemy

By Douglas MacMillan

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Major Elden Lacer didn't expect to be sitting in a classroom in Oklahoma this winter. An 18-year U.S. Army veteran, he has served two tours of duty in Iraq. But Lacer isn't doing standard training. Instead, he's taking an unusual 11-week training course on electronics, learning such things as how to turn a garage door opener into a bomb detonator. He's also finding out how insurgents can turn key fobs into explosives and how tech systems called jammers can be used to disable electronic weapons. "Whoever can [use this technology] best is going to have a decided advantage," says Lacer, a former Apache helicopter pilot.

The course is part of a growing push by the U.S. military into high-tech warfare. One leading-edge strategy is to attack enemies and bolster defenses by disrupting electromagnetic signals in battle. On Feb. 12, the Army announced it would train 1,600 full-time specialists in the discipline, to support the thousands of officers like Lacer who have received electronic warfare training in recent years to complement their normal roles.

While the Defense Dept. has warned of large spending cuts to conventional weapons and vehicle programs, such as the F-22 fighter aircraft, the Obama Administration is expected to allocate more funding for equipping soldiers with innovative electronic systems that have proven vital in nontraditional environments, such as Afghanistan. The government "wants to focus [its budget] on things that will help us win the war against terror in Iraq and Afghanistan and not some conflict 10 years down the pike," says Cai von Rumohr, an analyst at Cowen & Co. (COWN) in Boston.

The trend presents an opportunity for major defense contractors, such as Boeing (BA), Northrop Grumman (NOC), and Raytheon (RTN). But it's also a challenge. They need to figure out how to inject a bit of Silicon Valley into everything from tanks to machine guns.

The Early Days

The use of sophisticated electronics in warfare dates back to World War II, when radio and radar systems were used primarily to navigate planes and ships, as well intercept and jam enemy signals. In the Vietnam War, the U.S. deployed its first electronic warfare officers, who flew aboard aircraft and helped defend against the new threat of surface-to-air missiles.

In Iraq, electronic weapons proved to be the best defense against improvised explosive devices, or IEDs. Often used as roadside bombs, these devices have accounted for about 70% of American combat casualties suffered there. The Pentagon scrambled to order thousands of what it calls CREW devices (for "counter radio-controlled electronic warfare"), which disrupt the remote detonators used on many IEDs, and to train frontline soldiers to use them. ITT (ITT), which acquired EDO in 2007 to become the largest manufacturer of CREW jammers, now commands some $1.75 billion in government contracts for the devices. "The budgets for counter-IEDs have grown dramatically as a result of the threat," says John Capeci, ITT's vice-president for business development.

As a result of the shift to ground-based battles of electronics, the Army has had to train its own soldiers in the discipline rather than rely on specialists from the Air Force or Marine Corps, as it had in the past. "We realized we had to do it for ourselves," says Colonel Laurie Buckhout, who became chief of the Army's new electronic warfare division. She says that since 2007, the service has trained some 4,000 soldiers in electronics, from low-ranking battalion members all the way up to four-star generals, who serve as part-time tech experts in their existing units. The 1,600 new electronic warfare specialists will be spread out so there's at least one in every battalion (which means roughly 1 for every 300 to 600 soldiers).