Disruptive innovation and naval power : strategic and financial implications of unmanned underwater vehicles (UUVs) and long-term underwater power sources

Disruptive Innovation and Naval Power:

and Financial Implications of Unmanned

Underwater Vehicles (UUVs) and Long-term

Underwater Power Sources

by

Richard Winston Larson

S.B. Engineering

Massachusetts Institute of Technology, 2012

Submitted to the Department of Mechanical Engineering

in partial fulfillment of the requirements for the degree of

Master of Science in Mechanical Engineering

at the

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

February 2014

©

Massachusetts Institute of Technology 2014. All rights reserved.

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Author

Dep.atment of Mechanical Engineering

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Douglas P. Hart

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David E. Hardt

Ralph E. and Eloise F. Cross Professor of Mechanical Engineering

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Strategic

Disruptive Innovation and Naval Power: Strategic and

Financial Implications of Unmanned Underwater Vehicles

(UUVs) and Long-term Underwater Power Sources

by

Richard Winston Larson

Submitted to the Department of Mechanical Engineering on January 15, 2014, in partial fulfillment of the

requirements for the degree of

Master of Science in Mechanical Engineering

Abstract

The naval warfare environment is rapidly changing. The U.S. Navy is adapting by continuing its blue-water dominance while simultaneously building brown-water ca-pabilities. Unmanned systems, such as unmanned airborne drones, are proving piv-otal in facing new battlefield challenges. Unmanned underwater vehicles (UUVs) are emerging as the Navy's seaborne equivalent of the Air Force's drones. Representing a low-end disruptive technology relative to traditional shipborne operations, UUVs are becoming capable of taking on increasingly complex roles, tipping the scales of battlefield entropy. They improve mission outcomes and operate for a fraction of the cost of traditional operations. Furthermore, long-term underwater power sources at currently under development at MIT will extend UUV range and operational en-durance by an order of magnitude. Installing these systems will not only allow UUVs to complete new, previously impossible missions, but will also radically decrease costs.

I explore the financial and strategic implications of UUVs and long-term underwater

power sources to the Navy and its future operations. By examining current naval op-erations and the ways in which UUVs could complement or replace divers and ships, I identify ways to use UUV technology to reduce risk to human life, decrease costs, and leverage the technology learning curve. I conclude that significant cost savings are immediately available with the widespread use of UUVs, and current research investment levels are inadequate in comparison with the risks and rewards of UUV programs.

Thesis Supervisor: Douglas P. Hart

Acknowledgments

I am deeply indebted to the Massachusetts Institute of Technology and the profound

impact it has had on my life. My more than five years at the Institute have been a for-mative and defining time. I thank those in the Department of Mechanical Engineering who taught and inspired me on my journey at MIT.

Professor Douglas Hart has been the perfect mentor. He has pushed me to employ my strengths, improve my weaknesses, and pursue my academic interests. My thesis is a reflection of his academic leadership ability. Without his insight, hard work, and friendship, I would not have had the opportunity to chase my dreams.

My friends and family made my work possible. I thank Professor Roger Porter,

Brandon Hopkins, Nathaniel Coughran, Jonathan Sue Ho, and Tom Milnes for their friendship and wisdom. I thank my parents, Gordon and Allison Larson, for their generosity and love. Finally, I thank my wife, Sarah, for being the best thing that ever happened to me.

Executive Summary

As the U.S. Military maintains readiness to wage war with traditional nation-states as well as with terrorist groups, unmanned and autonomous systems are revolution-izing warfare. Aerial drones have been wildly successful, and unmanned underwater vehicles (UUVs) are an opportunity for the U.S. Navy to increase its capability and effectiveness in a similar way under the sea. For more information, see Section 1.1.

Unmanned Underwater Vehicles

Unmanned underwater vehicles are used in a variety of military, scientific, and in-dustrial settings. There are three classes of UUVs: autonomous underwater vehicles (AUVs), remotely operated vehicles (ROVs), and underwater gliders. The diversity of vehicle types and sizes offers flexibility in application and deployment, a key benefit to using UUVs. For more information, see Section 1.2.1.

Long-term power sources will drastically improve the usefulness of the UUV tech-nologies. An aluminum-based power source being developed at MIT under the direc-tion of Professor Doug Hart is projected to offer an energy density of 8000 MJ/L, a

1000% improvement over current energy storage technologies. The improved range

and power capabilities of UUVs equipped with such a power source will be a strategic advantage. For more information, see Section 1.2.2.

Disruptive Innovation and Battlefield Entropy

Disruptive innovations are those which improve a product along new performance metrics. Disruptive technologies improve through sustaining innovation (improve-ment along existing performance metrics) to displace existing technologies. Disruptive innovation plays an important role in maintaining combat superiority. Submarines, aerial drones, and cruise missiles are all examples of disruptive military innovations. There is significant first-mover advantage in adopting and skillfully managing

disrup-tive innovation. For more information, see Section 2.1.

Unmanned underwater vehicles are disrupting manned sea platforms. Though they are in many ways not as capable as ships or divers, they offer improved perfor-mance in cost, difficulty of detection, and flexibility. Not only are UUVs an opportu-nity, but they are also a threat. Other navies are also investing in UUVs, including Russia, China, and Thailand, as well as drug cartels and terrorist groups. For more information, see Section 2.2.

Battlefield entropy measures the difference between an entity's ideal fighting force and its actual combat effectiveness. Even if a combat entity possesses superior force, or is not experiencing attrition, its combat effectiveness will decrease as the entropy it experiences increases. Weapon systems (broadly defined as any element providing force) decrease battlefield entropy for the user and increase entropy for the opponent. Given a more effective weapon, a greater change in entropy will be experienced. Disruptive military innovations represent characteristic improvements in battlefield entropy, and UUVs offer a unique opportunity for the Navy to change battlefield entropy in its favor. For more information, see Section 2.3.

Disruptive innovation must be skillfully managed to realize its full potential. Four theories (jobs-to-be-done theory, market/application identification, discovery-driven

planning, and resource-process-value theory) provide best practices for identifying, adopting, and applying disruptive innovations well. For more information, see Section 2.4.

UUV Mission Cost Analysis and

Comparison

To demonstrate the disruptive power of UUVs, I analyzed the costs of missions that can be completed using current UUV technology. I examined the mission scenarios, the cost of completing the mission using manned systems, and the cost of completing the mission using UUVs. I compared the costs and analyzed the advantages of using

UUV technologies. In the table below, I present the percent cost savings experienced by using UUV technologies rather than manned systems. In general, UUV systems

are roughly an order of magnitude (90% cost savings) less expensive than manned systems. For more information, see Chapter 3.

Mission

CBNRE

Water Column Profiling

Mapping (High Definition)

High Definition Medium Definition Low Definition Harbor Monitoring Array Deployment Mine-hunting Hold-at-risk ASW Training Attached Materials Hull Inspection (Panamax) In-ater Sury_{In-water Survey} Undersea Infrastructure Percent Savings 93% 99% 76% 93% 93% 98% 88% 92% 96% 81% 54% 67% 86%

Implications of UUV Adoption

In conclusion, I offer several observations on UUVs and their disruptive potential to

naval operations:

" UUVs offer significant cost savings " Manned platforms are expensive

" UUVs are not one-size-fits-all

" UUVs represent a significant change in battlefield entropy

" Nonconsumption and overshooting offer many immediate UUV applications

" The low costs and disruptive nature of UUVs will make them attractive to other

navies and entities

For more information, see Chapter 4.

Unmanned underwater vehicles will revolutionize naval warfare. Proper

innova-tion management and early, enthusiastic adopinnova-tion is required to seize their strategic

Contents

1 Introduction

1.1 Technology and the Changing Face of Naval Warfare . . . .

1.2 Technological Advances in Naval Warfare . . . . 1.2.1 Unmanned Underwater Vehicles . . . . 1.2.2 Long-term Underwater Aluminum Power Source . . . .

2 Disruptive Innovation in Naval Technology

2.1 A Brief Introduction to Disruptive Innovation . . . .

2.1.1 Disruptive Innovation Example: RCA, Sony, and the Transistor 2.2 Disruptive Innovation in Warfare . . . .

2.2.1 Disruptive Innovation in the U.S. Military

2.2.2 Disruption of Naval Warfare by UUVs . . 2.3 Battlefield Entropy . . . .

2.3.1 Measuring Battlefield Entropy . . . .

2.3.2 Evaluating Military Innovation in Terms of

2.3.3 Battlefield Entropy and UUVs . . . .

2.4 Managing Disruptive Innovation . . . .

2.4.1 Military Disruption Case Study: UAVs . .

2.4.2 Disruption Lessons Learned . . . . 2.5 Potential UUV Missions . . . .

Battlefield Entropy

3 Mission Cost Analyses

3.1 CBNRE Detection and Localization . . . .

19 19 20 20 24 27 27 29 30 31 32 34 36 39 42 44 46 47 49 51 51

3.1.1

Mission Description . . . .

3.1.2

Manned System CONOPs and

3.1.3

UUV CONOPs and Costs

3.2 Near-land and Harbor Monitoring

3.2.1

Mission Description . . . .

3.2.2

Manned System CONOPs and

3.2.3

UUV CONOPs and Costs . .

3.3 Array Deployment . . . .

3.3.1

Mission Description . . . .

3.3.2

Manned System CONOPs and

3.3.3

UUV CONOPs and Costs . .

3.4 Oceanography and Bathymetry

.

. .

3.4.1

Mission Description . . . .

Costs

Costs

Costs

3.4.2

Manned System CONOPs and Costs

3.4.3

UUV CONOPs and Costs . . . . .

3.5 Mine detection, classification, identification,

3.5.1

Mission Description . . . .

3.5.2

Manned System CONOPs and Costs

3.5.3

UUV CONOPs and Costs . . . . .

3.6 Hold-at-risk . . . .

3.6.1

Mission Description . . . .

3.6.2

Manned System CONOPs and Costs

3.6.3

UUV CONOPs and Costs . . . . .

3.7 ASW Training . . . .

3.7.1

Mission Description . . . .

3.7.2

Manned System CONOPs and Costs

3.7.3

UUV CONOPs and Costs . . . . .

3.8

In-water

3.8.1

Mission Description . . . .

and neutralization

3.8.2

Manned System CONOPs and Costs . . . .

51

52

52

53

53

53

54

54

54

55

55

55

55

56

56

57

57

57

58

58

58

58

59

59

59

60

60

60

60

61

3.8.3 UUV CONOPs and Costs ... 61

3.9 Monitoring Undersea Infrastructure . . . . 62

3.9.1 M ission Description . . . . 62

3.9.2 Manned System CONOPs and Costs . . . . 62

3.9.3 UUV CONOPs and Costs . . . . 63

4 Implications of UUV Adoption

67

4.2 Ships are expensive . . . . 68

4.3 Aluminum power sources are an important step forward . . . . 68

4.4 UUVs are not one-size-fits-all . . . . 69

4.5 Nonconsumption and overshooting offer many immediate UUV appli-cations . . . . 70

4.6 Low costs and disruptive nature of UUVs will make them attractive to other navies . . . . 71

4.7 Conclusions . . . . 71

A Technology

73

A.1.1 Technology State-of-the-Art and Research Focus . . . . 73

A.2 Strategic Use of UUVs . . . . 74

A.2.1 US Navy 2004 UUV Master Plan . . . . 75

A.3 Evaluated Mission Selection . . . . 77

B Naval System Cost Calculations 79 B .1 Ships . . . . 79

B.1.1 Ship Life-cycle Costs as Calculated by the Congressional Bud-get O ffice . . . . 79

B.1.2 Other Ship Life-cycle Costs . . . . 80

B.1.3 Hourly Ship Costs . . . . 85

B.2.1 B.2.2 B.2.3 B.2.4 B.2.5

B.2.6

B.2.8

B.3 Other

B.3.1

B.3.2

B.3.3

B.3.4

Ship Utilization Rate . . . . Man-portable Class . . . . Light-weight Class . . . . Heavy-weight Class . . . . Large Class . . . . Z-Ray Glider . . . . Spray Glider . . . . Mission Resource Costs . . . . .

Diving Teams . . . .

AUV and ROV Operators . . .

Navy SEAL Operators . . . . .

Navy Marine Mammal Program

C Mission Cost Calculations

C.1 Intelligence, Surveillance, and Reconnaissance (ISR)

C.1.1 CBNRE Detection and Localization . . . . .

C.1.2 Water Column Profiling . . . .

C.1.3 Near-land and Harbor Monitoring . . . .

C.1.4 Array Deployment . . . .

C.1.5 Bathymetry . . . .

C.1.6 _{Mine Detection, Classification, Identification,}

C.2 Anti-submarine Warfare (ASW) . . . . C.2.1 Hold-at-risk . . . . C.2.2 ASW Training . . . .

C.3 Inspection and Identification (I&I) . . . .

C.3.1 In-water Survey and Hull Inspection . . . .

C.3.2 Monitoring undersea infrastructure . . . . .

86 88 89 89 89 90

90

92

List of Figures

1-1 Hydroid REMUS 100 AUV [1] 1-2 Hydroid REMUS 600-S AUV [2]

1-3 Bluefin 21 AUV [3] ...

1-4 Boeing Echo Ranger AUV [4] . 1-5 Oceaneering Magnum Plus ROV

1-6 Spray Glider [6] ...

1-7 Z-Ray Glider [7] ...

[5]

2-1 Technology improvement and disruption [8] . . . .

2-2 Battlefield entropy as a measure of weapon effectiveness .

21 21 22 22 23 24 24 27 36

List of Tables

2.1 Analyzed M issions . . . . 49

3.1 Mission costs comparison between manned systems and UUVs . . 64

3.2 Mission costs comparison between aluminum and non-aluminum power system s . . . . 65

B.1 CBO-calculated Life-cycle Ship Costs . . . . 81

B.2 CBO-calculated Life-cycle Ship Costs . . . . 82

B.3 Ship Costs per Hour . . . . 86

B.4 Unmanned Underwater Vehicle Characteristics and Costs . . . . 87

B.5 UUV Hourly Costs and Ship Utilization Rates . . . . 88

Chapter 1

Introduction

1.1

Technology and the Changing Face of Naval

Warfare

As the only global superpower, the United States of America faces unique challenges

in preparing for and waging war. While it must be prepared to fight nation-states with

well-developed military and industrial strength, the U.S. military must also confront

threats from terrorists and guerrillas using unconventional tactics. Maintaining broad

readiness is undeniably difficult.

Technology has always been a key to superior war fighting ability. Technology

not only improves current weaponry (faster aircraft, more powerful explosives, and

improved survivability). It also revolutionizes the way war is fought (RADAR, aircraft

carriers, cruise missiles). While technology has enabled U.S. Armed Forces to save

lives, protect the homeland, and extend military reach, it has also presented soldiers

with new threats, such as improvised explosive devices (IEDs) and cyber warfare, that allow small numbers of operatives to inflict widespread damage. As the enemy

becomes more dangerous, the U.S. Military must adapt, finding and effectively using

new technologies to wage war.

The U.S. Navy enables the United States to project military influence around the

strikes against targets globally. The Navy's capabilities also provide humanitarian relief, scientific data, and the protection of U.S. maritime and trade interests. During the Cold War, the Navy built a blue-water fleet intended to combat the capabilities of the Soviet Union. Since the fall of the Berlin Wall, the Navy has continued its blue-water dominance in response to ascendant threats from other nations desiring maritime superiority. Simultaneously, the Navy has had to adapt to brown-water operations in the shallow coastal areas and riverine environments of the Middle East and the Horn of Africa to combat terrorism.

1.2

Technological Advances in Naval Warfare

Even as budgets are cut, the types of missions the Navy has needed to fulfill have multiplied as threats have increased. As in the past, technology again presents the solution. The advent of unmanned underwater vehicles (UUVs) has accompanied advances in autonomy, energy storage, and surface vehicle technology. Robotics is revolutionizing the ways by which war is pursued.

1.2.1

Unmanned Underwater Vehicles

Unmanned underwater vehicles (UUVs) are the drones of the sea: remotely operated or autonomous underwater vessels capable of completing missions in place of humans, as well as missions impossible with manned platforms. They are in use by the Navy in oceanography, surveillance, and mine hunting roles [9]. Commercial applications include a variety of oil installation tasks, pipeline inspection, and survey, salvage, and recovery operations [10]. Scientists use AUVs for bathymetry, to explore deep sea geologic formations, and to interact with wildlife [11]. There are three types of UUVs: remotely operated vehicles (ROVs), autonomous underwater vehicles (AUVs), and underwater gliders.

Autonomous Underwater Vehicles

Autonomous underwater vehicles require minimal human intervention, possessing

dif-fering levels of autonomy dependent upon mission use. AUV's are generally deployed

from surface ships and then complete missions lasting from eight to 72 hours. Typical

sensor packages include side scan and synthetic aperture sonar, still and video

cam-eras, and environmental monitoring packages [11]. AUV's are employed in entering

denied areas due to their low risk of detection, low cost in comparison to manned

systems, and ability to collect high-quality information [9]. There are four classes of

AUVs:

1. Man-portable class (REMUS 100 [12], Fig. 1-1)

Diameter: 0.19 m

Average speed: 3 kts

Figure 1-1: Hydroid REMUS 100 AUV [1]

2. Light-weight class (REMUS 600

Diameter: 0.32 m

Average speed: 3 kts

[13], Fig. 1-2)

3. Heavy-weight class (Bluefin 21

[3],

Fig. 1-3)

Diameter: 0.53 m

Average speed: 3 kts

L

0I

A

Figure 1-3: Bluefin 21 AUV [3]

4. Large class (LDUUV

Diameter: 1.27 m

Average speed: 3 kts

[4], Fig. 1-4)

Figure 1-4: Boeing Echo Ranger AUV [4]

Remotely Operated Vehicles

Remotely operated vehicles are human controlled and connected to the surface by

tether. The tether provides communications (generally by a fiber optic connection)

and, in most cases, power to the ROV. They are able to remain at depth and on

task for extended periods of time. Used extensively in the oil industry, salvage, and

scientific operations to work at extreme depths, ROVs come in all shapes, sizes, and

deployment platforms, including on-shore, oil-rigs, and ships [10]. Remotely operated

vehicles are used in situations where constant human supervision is convenient (such as on an oil rig) or necessary (such as for retrieval missions, where current auton-only abilities are not sufficient). Vehicles are typically equipped with still and video

cameras and robotic manipulators. An inspection ROV is pictured in Fig. 1-5.

Figure 1-5: Oceaneering Magnum Plus ROV [5]

Gliders

Whereas AUVs and ROVs move via powered propulsion systems, gliders depend on underwater wings and changes in buoyancy to propel themselves through the water. They move in a telltale sawtooth pattern through the water, going up and down as they move forward [14]. Since they do not have powered propulsion, gliders are slower and more difficult to control than other UUV types. While slow (approximately 0.5 kt [6]), gliders consume little energy and are capable of staying at sea for extended periods of time. A series of glider experiments have lasted six months and even in excess of a year, with one glider successfully crossing the Atlantic over the course of 221 days [15].

9 Glider (Spray [6], Fig. 1-6)

Length: 2.1 m

Figure 1-6: Spray Glider [6]

* Liberdade Glider (Z-Ray [16], Fig. 1-7)

Wingspan: 6.1 m

Average speed: 2 kts

Figure 1-7: Z-Ray Glider [7]

1.2.2

Long-term Underwater Aluminum Power Source

Professor Doug Hart at MIT is leading a research group developing aluminum-based

underwater power sources for long-term UUV deployment. Aluminum is an ideal

power source due to its high energy density. Aluminum is highly reactive with water,

releasing heat and hydrogen in a vigorous reaction:

Unfortunately, that energy is difficult to access due to the passivation layer that forms

in nanoseconds and coats all aluminum exposed to oxygen. Other aluminum power

sources developed in the past have met limited success, such as one attempting to

burn aluminum [17].

The MIT team is taking a new approach, mixing aluminum with gallium to strip

off the passivation layer and prevent its formation. Using this phenomenon as the

basis to produce fuel for a hydrogen-based fuel cell, MIT has achieved promising

success and has developed a successful prototype system.

In another exciting development, the MIT team is developing an electrochemical

solution based on an oxidation reaction of aluminum, permanganate, and water:

Al + 40H- - Al (OH)4 + 3e-(-2.3 vs. SHE) (Anode) (1.2a)

MnO- + 2H20 + 3e- -+ 40H- + MnO2 (0.6 vs. SHE) (Cathode) (1.2b)

Al + MnO- + 2H20 -a Al (OH)4 + MnO2 (Overall) (1.2c)

Currently, the team (MIT researchers working with spin-off company Open Water

Power) has developed a water-based cell and has designed an encapsulation and

con-tainment system for the REMUS 600. An aluminum-permanganate cell will have an

energy density of 2.3 MJ/L and power density of 5.3 W/L, comparing favorably with

current Li-ion technologies (0.6 MJ/L and 1.4 W/L). Current development concepts

Chapter 2

Disruptive Innovation in Naval

Technology

2.1

A Brief Introduction to Disruptive Innovation

The material in this brief overview draws heavily from the works of Professor Clayton

M. Christensen at Harvard Business School, particularly The Innovator's Dilemma

[8] and The Innovator's Solution [19]. Please see these and other publications by

Christensen and his colleagues (such as Seeing What's Next [20]) for more information

about disruptive innovation and the role it plays in business and government.

-Convenience \g\O

*Price

Cu, oer tqeeds

o\O~ *Reliability

Time

Disruptive innovation is the process by which technologies dominating a market are displaced by emerging technologies that are initially low-end or enter from adja-cent markets. The basics of the theory of disruptive innovation are summarized in Fig. 2-1. The red line represents the needs of customers in a given market (though represented as a single line, customers demand a distribution of technology needs from low to high), which increase over time. When first introduced, technologies are not advanced enough to meet the needs of customers. In this situation, products compete based on their features and reliability, and customers will pay a premium for improved performance or increased reliability. Integrated product architectures are best suited to providing the required performance (due to the complexity of com-ponent interdependencies). Technologies improve through sustaining innovation, or innovations which enhance a product in its existing market and value network. A value network (sometimes called a value chain) is the web of value-adding steps that produce and market a product, ending with the user (for example: steel producer, engine manufacturer, auto maker, and dealer are all parts of the car value network). Once the technology is advanced enough that it exceeds the customers' require-ments, the customers are overshot and will choose products based on convenience and price. Modular product architectures become dominant because component interde-pendencies are well defined. Because the marginal utility derived from an incremental improvement in technology performance has vanished, the marginal price increase for technological improvement falls to zero, and products become commoditized. The performance shortfall (and the value focus) moves to an adjacent position in the value network.

When customers in a given market are overshot, or the products available have features that are more advanced than the customers need, that market is ripe for disruption. A product that is technologically inferior, but cheaper and good enough to accomplish the required task, will be attractive to those customers at the low end of the market. Alternatively, a technology that is used to complete a task that is not being completed currently (in other words, it competes against nonconsumption) can move into an adjacent market and displace the dominant technology as it improves

(through sustaining innovation) and is creatively used and applied. In both cases, customers evaluate and value the new product using performance metrics different from those used in evaluating the dominant products.

Whereas sustaining innovations improve existing technologies and products inside an existing value network and product architecture for a given market, disruptive innovations create new value networks and markets, and use distinct product ar-chitectures to satisfy new, distinct performance metrics. Sustaining innovations are generally technology-based to satisfy market needs, and disruptive innovations tend to be new market applications of existing technologies that do not fit the market in a traditional way. High-end suppliers and customers will ignore disruptive innovations because those products do not have the more advanced features that they require, and pursuing the high-end of the market is best practice. Ignorance continues until the disrupting technology has become advanced enough to replace the once-dominant product, and the market has changed completely.

There is significant first-mover advantage in fielding disruptive innovations due to experience and learning curves with the innovation. However, disruptive inno-vations cannot be "stuffed" into existing markets. Because they demand new value networks and compete based on different features, disruptive innovations cannot com-pete head-to-head with established products in established markets with established value networks.

2.1.1

Disruptive Innovation Example: RCA, Sony, and the

Transistor

Disruption is best understood through examples. A classic example of a disruptive innovation in business related by Christensen is the development and market applica-tion of the transistor in the 1960s [19]. RCA dominated the home electronics market, selling TVs and radios equipped with vacuum tubes. Appliance stores sold these products, making money off of vacuum tube repairs. The transistor was invented by Bell Labs in 1947, but it was not powerful enough to replace vacuum tubes.

Nonethe-less, seeing its revolutionary potential, RCA invested heavily in transistor research to boost power and use it in their TVs and radios. Sony took a different approach, introducing the first portable transistor radio in 1955. Sony used the same attributes that RCA saw as weaknesses (small size, low power) as strengths in their product.

Sound quality on transistor radios was inferior to vacuum tube radios, but they were portable and cheap, allowing people to listen to music in places they could not take a

table-top radio and were not able have music before. The customers buying transistor

radios were not those who bought the larger, "better" vacuum tube radios. The new

radios could not be sold in appliance stores, as there were no vacuum tubes to repair, but were instead sold in discount stores, thereby establishing a new value network.

Initially, RCA ignored Sony's radio, as it did not compete directly with their

product and functioned in a different value network. Sony was essentially building its

own new market. And RCA wasn't ignoring the technology: they were working on

transistor technologies. Sony continued to improve its transistor-based products and

gain experience in its new market and value network, introducing better radios and

portable TVs, selling them to people who could not afford the higher quality products

or had unique use cases. Eventually Sony began producing large appliances using

transistors that could compete directly with RCA's vacuum tube products, but at a

much lower price and more conveniently. RCA, despite its investment in transistor

technology, lost its market by failing to use the new technology disruptively by using

its attributes as strengths. Instead, they attempted to improve the technology and

use it in the existing appliance market, where distributors and customers did not

want it anyway.

2.2

Disruptive Innovation in Warfare

The way war is waged has been revolutionized many times by the introduction of new

weapons and new defense systems. Artillery, tanks, aircraft, radar, electronic warfare, atomic weaponry, and submarines are only a small handful of examples of the effects

an important strategic ability in pursuing victory.

2.2.1

Disruptive Innovation in the U.S. Military

The United States Armed Forces has a first-rate track record in pursuing innovation. Aircraft carriers, radar, nuclear warships, electronic warfare, and unmanned aerial vehicles (UAVs) are examples of how the U.S. has relentlessly pursued new technology as a means to protect America.

The term "disruptive innovation" has taken on a slightly different meaning in the military, where is denotes a new technology that makes an old capability obsolete [21]. For example, electromagnetic rail guns promise to make existing cruise missiles obsolete [22]. The military's definition differs from the academic definition of a dis-ruptive innovation [21], which is a product that is evaluated using new performance metrics and eventually displaces previously dominant technologies that overshot cus-tomer needs [23] (the definition I will continue to use). To denote that which the military traditionally terms as disruptive, I will use "revolutionary". According to this definition, a rail gun, though undoubtedly revolutionary, is a sustaining inno-vation. It provides greater capability based on traditional performance metrics (i.e. more firepower, at a higher rate, with improved range and accuracy). An example of a disruptive innovation in the military is UAVs. While they are slower, less maneu-verable, and carry less than manned aircraft, UAVs are cheaper, broadly available, and keep pilots out of harm's way. The military values these new capabilities, and since their introduction, UAVs have become more capable, replacing manned aircraft in a variety of important missions [24]. I will cover unmanned aircraft in more detail in Section 2.4.1.

The U.S. Armed Forces must pursue both types of innovation to maintain its dom-inance [23]. It must maintain its conventional war fighting ability by building better and faster weapons and improving soldier lethality in order to fight conventional wars. The military must also pursue disruptive innovations for a variety of reasons, keeping in mind that first-mover advantage is significant in deploying disruptive innovation.

nontradi-tional enemies. Unmanned aircraft, for example, are useful in fighting terrorists, and would also be useful in fighting a nation-state. Although disruptive innovations may not be absolutely necessary to win battles, they decrease casualties and speed victory. Radar solved the nonconsumption of battlefield awareness during World War II. The Allies would have likely won without radar, it was an important invention that saved lives and accelerated victory.

Second, by gaining experience with disruptive innovation, the military will be able to successfully counter similar technologies used by the enemy. Continuing with UAVs, the experience the U.S. military is gaining with these aircraft will enable it to better fight against UAVs deployed by other parties in future conflicts. In World War I, Britain was challenged by U-boats because of their lack of experience with that type of disruptive innovation [24].

Third, the advantages gained by deploying disruptive innovations almost always shorten conflict and ultimately save both civilian and military lives. Disruptive in-novations are also useful for peaceful purposes. Radar, developed for the military, is now used in many ways, including weather forecasting and civilian aviation.

2.2.2

Disruption of Naval Warfare by UUVs

Naval warfare is currently undergoing disruption by way of UUVs. These unmanned vehicles promise to be highly effective force multipliers. They are disruptive because they do not perform well along traditional metrics of maritime warfare (multi-mission capabilities, time-critical strike weaponry, long deployments, and speed). They are, however, highly desirable and advanced along metrics that are becoming important to the Navy, including limited human interaction and risk, decreased cost, and clan-destine operation.

In many instances, manned vessels overshoot mission requirements, attempting to be all-purpose ships. They are large, integrated systems that must be carefully planned and built. Ships are expensive, requiring massive manufacturing facilities as well as extensive shipbuilding, construction, and weaponry ability. Entities desiring to build naval vessels, even of moderate complexity, face steep barriers to entry and high

fixed costs. Unmanned underwater vehicles, on the other hand, can be constructed from off-the-shelf parts. While more advanced UUVs capable of great depths are more difficult to design and construct, simple UUVs designed for depths of less than

100 m and simple missions are inexpensive and require minimal engineering ability.

Thailand, for example, has a successful UUV program, producing vehicles for anti-submarine warfare training [25]. Costing less than $50,000, these vehicles, while of simple construction and capable of depths of only 30 m, cost a small fraction of the similarly-sized REMUS 600, which costs $2.8 million [26]. Individual systems are themselves modular, as well as mission systems. Different types of UUVs can be used to accomplish different mission objectives, and several types can be used in pursuit of a single mission.

The migration of naval weaponry from complex, integrated systems to simpler, modular systems that accomplish specific jobs signals that disruption at work. It is vitally important to maintain a force of the best warships able to maintain global superpower position, justifying the continued construction of large vessels. However, it is just as important to utilize disruptive innovations to save lives and resources. Unmanned underwater vehicles are a means to reduce costs and risk to human life and valuable equipment. The modular approach of UUV systems to mission comple-tion is important. In Chapter 3, I demonstrate the significant cost savings available through using UUVs instead of manned systems. As force multipliers, UUVs provide clear roads to improved capabilities at lower costs, a point particularly relevant when budgets are tight.

The U.S. Navy recognizes the revolutionary nature of UUVs and has invested in

UUV research over many years. Other navies have also invested in UUVs because

of their low cost and unique attributes and capabilities. Thailand and Malaysia are interested in inexpensive UUVs for anti-submarine warfare training [25] and recon-naissance [27]. China is also pursuing its own unmanned underwater vehicle program

[28] with their own research facility modeled on MIT's Woods Hole Oceanographic

Institution [29]. Other nations pursuing UUV programs include Russia, India, Singa-pore, France, Norway, Germany, Sweden, the United Kingdom, and Israel [30]. Other

groups are also pursuing unmanned underwater vehicles development, including drug cartels [31]. Terrorists could use UUVs to attack undersea oil platforms, network infrastructure, and maritime commerce [32]. The low costs and simple, modular de-signs of UUVs are attractive attributes to countries and other groups lacking funding. As they build UUVs and gain experience, they will become increasingly adept at us-ing UUVs to further their causes, creatus-ing force asymmetries. The United States must continue to invest in UUV research if it is to remain at the head of the pack in developing unmanned maritime technology. Otherwise, other nations and entities will outpace the U.S. Navy in unmanned development, a risky proposition for future armed conflict.

Unmanned underwater vehicles are disruptive to manned surface and subsurface vessels. Though they are not currently capable of competing with ships and sub-marines in many aspects (payload size, speed), they are rapidly improving. At the same time, their strengths target the weaknesses of manned vessels. They move silently and are difficult to detect. They can be launched and perform missions from shore, surface, and submarine platforms at sizable standoff distances and from depth. Advanced sensor suites allow them to perform reconnaissance with better results than manned platforms [33]. Advances in autonomy, energy systems, and underwater com-munications will further drive UUVs toward high-end applications, most importantly through weaponization. While there will always be missions that require the use of large manned vessels, UUVs will increasingly displace as well as threaten them. The lack of risk to personnel and high-value equipment in using UUVs will give them advantages in engagements with manned vessels.

Unmanned underwater vehicles will soon become absolutely necessary in main-taining maritime superiority.

2.3

Battlefield Entropy

Entropy, in its most general sense, measures disorder [34]. While it is defined in many ways, one relevant definition is that entropy S is the difference between the energy E

in a system and the amount of that energy Q that is available to do work [35]:

S= E-

Q.

In other words, not all energy in a system can be used effectively. Some of it will be lost due to disorder in the system, which can be measured by entropy.

A similar measure of disorder can be used to characterize the situation of a

battle-field entity. Battlebattle-field entropy may be defined as the difference between an entity's

ideal fighting potential and its actual combat effectiveness. Even if a combat entity

possesses superior force, or is not experiencing attrition, its combat effectiveness will

decrease as the entropy it experiences increases. For example, laying a minefield raises

battlefield entropy against a fleet of ships. Even if the ships are state-of-the-art

ves-sels and no ship is damaged during transit, a minefield will inevitably slow the fleet's

progress and prevent the use of its full capabilities. The higher entropy experienced

by the fleet hinders the use of its full effectiveness against an enemy.

All effective weapons increase battlefield entropy for the opposing party. In

de-scribing battlefield entropy, I take a general definition of weapons and weapon systems

to be any use of force, including:

" manpower

" platforms, vehicles, and vessels

" munitions

" defense systems

" electronic and psychological warfare

" information

2.3.1

Measuring Battlefield Entropy

The three dynamics of combat are space, time, and force [36]. Battlefield entropy finds its roots in these three principles, and may be raised along three interdependent axes:

1. Geography (space)

2. Availability (time)

3. Difficulty (force).

Weapons technologies may be evaluated for their effectiveness based on the manner in and degree to which they increase battlefield entropy for the opposing party. Any effective weapon technology will excel along one of these axes, as shown in Fig. 2-2. The most effective and useful weapons and systems excel in all three, as represented

by the red cube furthest from the origin in Fig. 2-2.

Geography

Figure 2-2: Battlefield entropy as a measure of weapon effectiveness

Each axis is characterized by three metrics that define superiority along that axis. Improving in these metrics increases battlefield entropy.

Geography Geography denotes the distribution of weaponry on the battlefield.

1. Distance - The standoff distance offered by the weapon between the user and

target. For example, a cruise missile offers significant standoff distance between

the launching vehicle and the target, making engagement difficult for the target.

2. Area - The distance between weapon systems. The broader the area across

which the weapons are spread, the more difficult it is to engage and neutralize

them. Scattered resources and operatives has made it difficult to dismantle

terrorist organizations.

3. Precision - The weapon's ability to strike a narrow target area with accuracy

and minimal collateral damage. Laser-guided weapons are significantly more

effective than wide-area bombing. Snipers are valued for similar capabilities.

Availability Availability denotes the distribution of weaponry dependent on

de-ployment constraints.

1. Cost - The cost involved in using the weapon, including the monetary cost of

production and deployment, as well as any political costs. The AK-47 has been

widely used due to its low cost. Nuclear weapons were not only expensive to

develop, but the political costs are so high that they have been used only twice.

2. Rate - The rate at which the weapon can be used, limited by weapon

produc-tion, transport, or deployment rates. For example, only two atomic bombs had

been built in August 1945, and another strike would have had to wait several

months for another bomb to be built. Also, systems travel at different speeds

and have varying loiter times.

3. Flexibility - The amount of variance and flexibility in the weapons systems

deployed. There are, for example, myriad types of sea mines. They can be

intermingled with one another, making them even more difficult to disarm. The

launch cruise missiles, and perform other missions) also increases the battlefield entropy experienced by an enemy.

Difficulty _{Difficulty denotes the amount of force the weapon system unleashes, and}

the difficulty the target experiences in countering the effects of the weapon.

1. Detection - _{The difficulty experienced in detecting and identifying the weapon}

system. The more difficult it is to detect a weapon, the harder it is to defend against it. For example, stealth aircraft offer significant advantages in battle over traditional, easily detected aircraft. Jungle warfare is difficult because it is easy to conceal weapons.

2. Indefensibility - The difficulty experienced in preventing the weapon from striking its target. Anti-tank barriers are very effective in protecting against tank action, but are useless against air defenses. The SR-71 was designed to evade air defense systems deployed by the USSR.

3. Destructiveness - The difficulty experienced in minimizing the damage caused

by the weapon. Large bunker-busting bombs are effective because their

destruc-tive power is difficult to deflect.

Decreasing Battlefield Entropy Battlefield entropy is conserved among

oppos-ing forces. Weapons that increase the entropy experienced by an opponent corre-spondingly decrease the entropy experienced by the user. It follows that an opposing force may deploy its own weapons or defensive systems to decrease the effects of its opponent's weapons and decrease the battlefield entropy it experiences. An effective defense will affect metrics to decrease entropy to a point where an opponent's weapon loses its effectiveness. Using weapons arid innovations that increase the likelihood of detection, decrease a weapons destructive effects, or prevent a weapon from reaching its target are all ways to decrease battlefield entropy.

For example, UAVs have proven effective in killing terrorists and their leaders by raising battlefield entropy over previous systems by improving along several metrics

on each characteristic axis. Unmanned aerial vehicles are more difficult to detect, precise, low (monetary) cost, and (due to long loiter times) offer near immediate

strike capability. Terrorists are able to decrease the entropy they experience, and

have thereby raised the entropy the U.S. Military experiences in pursuing them, by

improving their own systems on metrics along each characteristic axis. Terrorists

defend against UAV strikes by hiding in bunkers to decrease destructiveness,

increas-ing political costs by usincreas-ing human shields, and spreadincreas-ing their operations over large

areas.

Innovations that decrease battlefield entropy abound. Electronic warfare has been

effective in decreasing battlefield entropy because it increases weapon precision and

the likelihood of detecting enemy weapons. Missile defense systems aim to prevent

nuclear warheads from ever reaching their targets. Bunkers and bomb shelters re-duce the (lestructiveness of a bomb. Unmanned aerial vehicles increase the standoff distance (the pilot is halfway around the world), decreasing the value of air defenses. Any useful defensive technology or innovation will represent a negative change along the characteristic axes of battlefield entropy for the user of that innovation.

2.3.2

Evaluating Military Innovation in Terms of Battlefield

Entropy

Weapons technologies may be evaluated in their effectiveness by measuring the degree to which they increase the battlefield entropy experienced by the opposing combatant group. The higher the battlefield entropy induced by the weapon, the harder it is for the opponent to counter its effects, resulting in a decrease in the effectiveness of the opponents own weaponry. The most effective and broadly used weapons will have high scores along all three axes. For example, terrorist attacks using IEDs are so effective because the entropy presented is debilitatingly high for the party trying to prevent the attack. Terrorist attacks can be effective against a wide range of targets, are destructive to property and morale, and present a low cost to terrorist groups.

produce on the battlefield. The greater a weapon's distance from the origin, the more effective and useful the technology, and the greater its merit for investment in its development. There is no absolute measure for distance along the axes; rather, the metrics should act as guides, and comparisons are relative.

It is also possible to rate the value of marginal investment into the weapon based on the marginal improvement in increasing the battlefield entropy experienced by an opponent. Mature technologies will see their marginal changes in battlefield entropy approach zero per unit of investment, signaling an opportunity for disruptive military innovation. Disruptive innovation in a component of a weapons system can represent a significant change in the entropy produced by that weapons system. Such an inno-vation, on which subsequent innovation and significant changes in battlefield entropy hinges, is a keystone innovation.

Nuclear weapons, at first glance, appear to be the most effective weapons in any arsenal. However, through the lenses of battlefield entropy, their true effectiveness can be ascertained over time. When first developed, nuclear weapons were seen as

highly destructive weapons that worked over large areas. They were prohibitively

expensive to develop and difficult to build. Subsequent research lowered monetary costs, increased production capabilities, and improved the reliability of delivery. Re-search was also important in countering their indefensibility: by mutually assured destruction, the possession of a nuclear arsenal prevents their use by another entity. However, the political costs associated with nuclear warfare are so high that they have never been used since WWII. In fact, other weapon systems developed in that time have proven to be much more effective, and see much broader use today. The theory of battlefield entropy shows that while nuclear weapons are necessary as a deterrent, research is (and has been) better invested elsewhere. The marginal change in battlefield entropy per dollar of research in nuclear weapons is nearly zero (one can destroy the earth and humanity only once).

Submarines were disruptive when first widely deployed in WWI. Though slow and lacking significant firepower, they were difficult to detect and defend against.

Submarines were maturing as a technology until the disruptive use of nuclear power.

Nuclear reactors, expensive yet long-enduring, catapulted submarines along the

sus-taining innovation curve. It was a keystone innovation. Subsequent research enabled

by use of nuclear power (such as the use of cruise missiles) appreciated a significant

marginal change in battlefield entropy, with further improvements in destructiveness,

indefensibility, and difficulty of detection, as well as range and flexibility. A disruptive

innovation provided for a cascade of sustaining and disruptive innovations within the

submarine space, providing for significant changes in battlefield entropy.

Battlefield Entropy and Disruptive Innovation Any disruptive military

inno-vation will represent an improvement in a metric on one of these axes while (at least

temporarily) seeing decreased performance in a different metric in which an

exist-ing platform excels. For example, UAVs, a disruptive military technology, improved

along the metrics of distance, cost, rate, and detection. However, they have been

less superior than the manned aircraft they have displaced in terms of flexibility and

destructiveness.

Disruptive products improve through sustaining innovation until they displace the

existing products that once dominated the market. From the standpoint of battlefield

entropy, sustaining innovation can improve performance along the metrics in which

the product already excels. For example, UAVs will become more difficult to detect

and have longer loiter times. Sustaining innovation can also improve performance

along the metrics in which the product is lacking in comparison to existing solutions.

For example, UAVs will continue to be equipped with more powerful munitions, increasing their destructiveness. In either case, sustaining innovation increases the

battlefield entropy experienced by an opponent.

Evaluating a potentially disruptive innovation in terms of battlefield entropy can

identify new performance metrics that will demonstrate the value of the innovation

in combat. As mentioned, disruptive innovations often represent changes in market

application rather than technological improvement. New applications of innovations

appli-cations could be identified that would otherwise be missed.

The theory of battlefield entropy lends urgency to the adoption and skilled man-agement of disruptive innovation. In the realm of disruptive innovation, even small research and application wins can represent significant changes in the battlefield en-tropy that the entity will experience. Being a first mover in disruptive innovations provides significant advantages on the battlefield in increasing combat effectiveness and changing entropy. A larger power that only sees a smaller immediate change in its battlefield entropy is still motivated to prevent smaller powers from using a disrup-tive innovation to see a significant change in the smaller power's battlefield entropy. Such a large change in relation to current battlefield entropy levels can upset tactical balance and dynamics.

2.3.3

Battlefield Entropy and UUVs

The theory of battlefield entropy demonstrates the disruptive nature of UUVs, and also highlights their potential as an effective weapon. Unmanned underwater vehicles are an opportunity for the U.S. Navy to decrease the entropy it experiences while simultaneously increasing the entropy it projects on to its opponents.

Unmanned underwater vehicles represent improvements in a metric along all three characteristic axes. They increase standoff distances and the area over which forces are spread; they are low cost, they are easy to produce, and it is easy to design vary-ing types of UUVs for different mission types; and UUVs are more difficult to detect and protect against. The vehicles also assist in detecting threats (reconnaissance mis-sions), provide means to deactivate other weapons (mine hunting), increase precision (higher quality oceanographic data). Unmanned underwater vehicles both increase entropy for the opposing party and decrease entropy for the launching party. Subse-quent sustaining innovations promise to enhance the performance of UUVs along the characteristic axes of battlefield entropy.

While they excel along some metrics (offering superiority over existing solutions), UUVs are not as capable along other metrics. They are slow, offer almost no destruc-tive power, and are not multi-mission vehicles (taking a different approach to offering

flexibility, which is their modular architecture). Unmanned underwater vehicles are a disruptive innovation, and sustaining innovations will improve the performance of

UUVs along the aforementioned metrics.

Unmanned underwater vehicles are a new technology, but their original features

and effect on battlefield entropy promise high returns on research investment. For

a marginal unit of research investment, the marginal change in battlefield entropy

will be high. There are few opportunities available where a little can go so far in

increasing combat effectiveness.

Long-term power sources for UUVs, are a keystone innovation. The advent of

nu-clear power in submarines launched a cascade of innovation that accelerated the

bat-tlefield entropy capability of submarines. Developing long-endurance power sources

for UUVs, such as the aluminum power source being researched and built at MIT, will precede a similar flood of sustaining innovation that will see the effectiveness of

UUVs multiplied. The relatively small investment in long-term energy source research

will be rewarded with a significant change in battlefield entropy due to not only the

use of the long-term power source, but the subsequent applications for which it

pro-vides. Longer UUV missions offering more power for vehicle subsystems will further

increase the distance and area a UUV can cover, improve its flexibility, and make

them more difficult to defend against. Other technologies and missions that cannot

be currently envisioned will also be developed to take advantage of UUVs powered

by long-term power sources. Such innovations will produce significant changes in

battlefield entropy.

The U.S. Military is not the only group that will realize and invest in the potential

of UUVs to change battlefield entropy. While early changes in battlefield entropy

provided by UUVs may seem small, they will represent an investment in the significant

changes that will follow. The changes in battlefield entropy will also represent a

greater change than that which is available from investing in sustaining innovations

for other, more mature technologies. Furthermore, early investment in UUV research

and effective management of this innovation prevents the first mover advantage from

from small research investments and successes.

2.4

Managing Disruptive Innovation

The disruption of manned naval operations by UUVs presents an opportunity inside of a problem. While they will undoubtedly prove a threat to the U.S. Navy in fu-ture conflicts, UUVs will also provide solutions to new threats and adapting enemies, including the use of UUVs against the United States. Adept management of this dis-ruptive innovation will ensure the U.S. Navy's dominance of the seas. War tends to accelerate the process of pursuing and adopting disruptive innovations, as the desper-ation and values (solutions trump proceedure) that come with war are conducive to disruptive innovation. Effective management of disruptive innovation during peace seems to be more difficult. However, it can pay off drastically when major armed conflict arises. Limited involvement in smaller conflicts (such as police actions) often provides opportunity to test and refine disruptive military technologies. For example, the German army tested Panzer tanks and fighter aircraft in the Spanish Civil War in the 1930s before their devastating deployment in WWII [37, 38]. The United States

utilized UAVs in Kosovo before their use in Iraq and Afghanistan [39].

In addition to describing the problems established firms encounter in confronting

disruptive innovations, Christensen and others have used the theory to develop meth-ods of harnessing disruptive innovation successfully (most notably in The Innovator's

Solution [8] and The Innovator's Guide to Growth [40]). There are four sets of

theo-ries and best-practices that guide organizations in managing disruptive innovation to their advantage.

1. Jobs-to-be-done Theory

Jobs-to-be-done theory is best summarized as, "People don't need quarter-inch

drills. They need quarter-inch holes." The theory suggests that when designing

product features, it is best to use a use-case scenario as a guide. Disruptive

innovations are particularly difficult to direct and manage since they are new