>> REAL REFORM THIS TIME?
Keeping the Information Edge
By Kevin O'Connell and Robert R. Tomes
Kevin O'Connell is director of RAND's Intelligence Policy Center and adjunct professor of national security studies at Georgetown University. Robert R. Tomes is the deputy chief of the New Concepts Office, National Imagery and Mapping Agency, and a member of the Council on Emerging National Security Affairs. The opinions and arguments are the authors' alone.
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Where is the knowledge we have lost in information?
-- T. S. Eliot
Multifaceted discussions about "America's information edge" transpired throughout the 1990s. In a significant article by that name in Foreign Affairs (March-April 1996), Joseph S. Nye and William A. Owens captured the essence and underlying importance of the idea:
The one country that can best lead the information revolution will be more powerful than any other. For the foreseeable future, that country is the United States. America has apparent strength in military power and economic production. Yet its more subtle comparative advantage is its ability to collect, process, act upon, and disseminate information, an edge that will almost certainly grow over the next decade.
In defense policy, the 1990s information-edge thesis appeared in different guises. Concepts such as information superiority, dominant battlespace knowledge, and decision superiority emerged as key elements of joint doctrine. National security strategy discussions focused on national information highways and critical infrastructure protection -- key components of sustaining information-edge capabilities. In the most significant intelligence organizational reform of the decade, the National Imagery and Mapping Agency (nima) was founded with the mission of "guaranteeing the information edge." By the end of the decade, the Department of Defense, the Central Intelligence Agency, and other national security agencies presented strategic plans aiming to sustain and expand America's information edge while planning for increased volumes of information gathered from an increasingly diverse range of sources.
Our adversaries, meanwhile, moved to create and exploit their own information advantages. Al Qaeda, for example, developed a global intelligence capability, adapted the latest commercial information technology for their purposes, and exploited seams in our security defenses (witness the group's sophisticated use of stenography within the World Wide Web to communicate with operatives). Discussion of these seams now dominates national security reform debates. For us, the post-September 11 talk about intelligence transformation begged the question, Quo vadis, America's information edge?
Despite advances in information technology and knowledge management within the most visible area of national security -- the military -- America's overall commitment to preserving its information edge across the larger security bureaucracy, pace Nye and Owens, foundered during the 1990s. To be sure, the situation is improving. Great strides in information sharing are being made. Pockets of innovation do exist. Additional funds are now available to correct nearly a decade of resource shortfalls. Yet we contend that despite significant initiatives to transform, government-wide information-sharing innovations and intelligence-integration initiatives are evolving too slowly.
Framing the coming intelligence debate
We believe that the coming year will witness an unparalleled national debate over the future of American intelligence. Attention at the official level will be necessary to effect change, but by itself it is insufficient. What will also be needed is a reasoned public debate about the purposes and dynamics of U.S. intelligence.
The debate will address a number of issues, though intelligence sharing and cross-agency integration will remain at the forefront. The intelligence-sharing issue has been a favorite topic within American security planning since the summer of 2002. So too have subsequent efforts to discover who had information and intelligence about the September 11 terrorist attacks and what, if anything, would have been different had all information been shared among U.S. intelligence and law enforcement agencies. The joint congressional inquiry into the intelligence context of 9-11 provides a number of points for consideration. The inquiry's report decried a failure to capitalize on the "individual and collective significance" of information relevant to the attacks. Other findings faulted details across the intelligence spectrum of collection, analysis, use of technology, and information-sharing policies.
The coming intelligence debate will address more recent issues as well. The flap over the state of Iraqi weapons of mass destruction, charges that the intelligence cycle is being politicized, and a perceived lack of innovation in the integration of diverse intelligence sources are likely to amplify arguments over intelligence modernization -- the backbone of our information edge. Intelligence will also figure prominently in the assessment of coalition responses to the escalating Iraqi insurgency.
All of these are appropriate considerations for an intelligence transformation debate, but they are not necessarily useful for organizing action. We believe that the appropriate research question for the policy community is not who in the U.S. government -- intelligence agency, law enforcement entity, or other -- failed to react to specific information about the individuals associated with the September 11 attacks. (Similar questions about the quality of intelligence preceding Operation Iraqi Freedom will not focus our attention on the right issues, either.) Rather, policymakers should be asking what levels of political, financial, and intellectual resources leaders and the public at large are willing to commit -- and whether that commitment will last.
Staying power is critical. So too is putting in place a transformation program that is rooted in a culture of innovation -- guided by an architect with clear strategic objectives -- and that addresses organizational and operational improvement, not just technology. Setting a course for fundamental change also means taking what management theorists call "a long view." The reforms that focused defense policy on information and knowledge occurred over decades; only now are they being reflected in strategy, doctrine, and acquisition.
In fact, antecedents for the much-ballyhooed Revolution in Military Affairs (rma) first emerged in the mid-1970s -- making it at least a three-decades-long journey to today's proclamation of a "new American way of war." Current defense transformation initiatives look beyond the 2020 time frame.
Without an intense focus by the leadership -- and perhaps by the public at large -- it will take at least that long to realize the full potential of any radical or significant overhaul of analytical methods, information sharing, and knowledge-management capabilities. But, just as some defense transformation must occur in the near term to sustain our military advantage in light of new threats and operational realities, intelligence transformation must pursue a mix of near-, mid-, and long-term initiatives.
Allegations that intelligence community and domestic law enforcement officials failed to share crucial information created the political impetus for bold action, which the Bush administration took by creating a cabinet-level Department of Homeland Security (dhs). More recently, the president instructed the director of central intelligence (dci), the director of the fbi, the attorney general, and the secretaries of homeland security and defense to form a Terrorist Threat Integration Center (ttic) under the leadership of the dci. An undersecretary of defense for intelligence was appointed to coordinate the wide and varied activities of Defense Department intelligence.
Despite our view that we are moving too slowly toward meaningful intelligence integration and information sharing, these changes suggest that the intelligence transformation debate will in some ways be about what to do next. Because of these developments, the fear of change and reluctance to create new relationships may be less significant problems.
Clearly, considerable changes have occurred. Our concern is ensuring that form follows function at the level of policy, in the development of new analytic capabilities, and in the development of community incentives to adopt new ways of doing business. An argument similar to the 1990s information-edge discussion in defense policy recurs among "change" recommendations: The pursuit of information and decision superiority underscores military innovation. Concerning the technological enablers of sharing, many argue for situational awareness and visualization tools similar to those used by military intelligence analysts to integrate diverse sources. Form and function should reflect the current integration imperative, which means that behavior must match the current rhetoric of horizontal integration.
An opportunity exists to use the creation of dhs as a first step toward better alignment of the funding, management, and coordination of intelligence. Advertised as the largest reorganization in American government since the 1947 National Security Act (which created the Department of Defense and the Central Intelligence Agency), the Department of Homeland Security will take efficient information sharing, effective knowledge management, and leadership of interagency coordination as the benchmarks of its success. The department cannot function without substantial analytical resources to correlate intelligence from national intelligence agencies, field reports from law enforcement, and internal information about people and material entering the United States. The Terrorist Threat Integration Center performs some of this function, but its explicit relationship to dhs is not yet fully elaborated or understood.
In any case, the sine qua non of creating real homeland security measures is expanding and sustaining the information edge. Updating the lexicon, this means a sustained knowledge edge through integrated source management: processing, disseminating, and exploiting information in time to preempt adversaries and prevent crises. This requires embracing a new attitude within the U.S. government -- and, at some level, in society as a whole -- about more active information sharing across federal and domestic agencies along with a willingness to pursue intelligence-related changes and innovations in the executive and legislative branches. Beyond dhs and ttic, it is difficult to imagine doing this without meaningful intelligence reform, which in turn involves policy, security, and organizational innovation at many levels.
The anticipated intelligence reform debate cannot be limited to getting domestic and national intelligence agencies merely to share information or post data others can access. Anyone who regards this as the core issue has mistaken the tree for the forest. An overhaul of how intelligence and information are created, gathered, and shared throughout the national security enterprise is needed. Although recent discussions have focused on domestic information sharing, this issue also concerns relationships with allies and security partners that are historically dependent on American intelligence to supplement their more austere intelligence activities. When American information and knowledge entities fail internally to correlate and act upon collected or reported data, the negative effects cascade through information networks both inside and outside the Untied States. This has the potential to negatively influence those who share with us, jeopardizing a relatively small but nonetheless critical source of information our human sources are often unable to ferret out.
Organizational politics and parochial quibbling aside, innovations in intelligence analysis and sharing must be central to rethinking how we sustain our comparative advantage.
Rethinking the information component
Since the mass of information available tends to exceed the capacity to evaluate it," Henry Kissinger writes in his Does America Need a Foreign Policy? (Simon & Schuster, 2001), "a gap has opened up between information and knowledge and, even beyond that, between knowledge and wisdom." Fortunately, there are signs of improvement. The Bush administration's national security strategy and defense planning documents have restored intelligence to the core of national security policymaking. Some officials suggest the need for intelligence readiness assessments similar to those used in defense planning. Intelligence, traditionally viewed as a supporting function, is now considered a co-equal element of national power. Many are pushing for intelligence capabilities that enable proactive policy decisions to shape the threat environment. This is a dramatic shift for those who considered intelligence a mere tool (rather than a source of power) for understanding what our adversaries did in the recent past (rather than what they will do in the near future).
Advancing the rethinking of national intelligence requires adapting security controls and policies that have governed the protection of intelligence sources and methods for decades. In essence, a rigid "need to know" regime -- by definition a restrictive concept more suited to the Cold War -- loses its utility in a world where police officers, coast guard captains, and emergency rooms must all remain in the loop. Put another way, the underlying logic of information compartments loses its appeal in an era where much is uncertain, where we grapple with mysteries rather than collect the pieces of a known puzzle, and where we want human abstraction and cognitive capabilities to intuit otherwise hidden relationships. The new imperative is a need to share. This requires unprecedented revisions of policies and procedures. It requires a cultural change for those intelligence professionals who cut their teeth in the current system.
This is not to say that sources and methods are no longer important. Indeed, they must be protected to preserve our information edge. Achieving the requisite levels of sharing while continuing to protect sources and methods may require complex technological solutions. Nonetheless, ease of access must prevail.
Rethinking intelligence requires some understanding of how we got here. During the 1990s, the intelligence community warned of an increasingly diverse and complex range of new security threats at home and abroad. Despite widespread agreement that global security challenges were overwhelming intelligence agencies, the security arms of the U.S. government were not given the proper direction or incentives to fully adapt from Cold War organizational cultures, processes, and business models.
The 1990s witnessed movements to reinvent and reengineer government; initiatives to enhance accountability through performance results; and, in the defense sector, plans to modernize, revolutionize, and finally transform the military. Sadly, the post-Cold War peace dividend in intelligence never came, and the context for a reform of intelligence activities was never ripe in the 1990s politically, financially, or intellectually. Many tried and failed. Intelligence agencies suffered through budget cuts and personnel reductions. The cia was forced to close a significant number of its overseas missions -- many in areas critical to the war on terrorism today. Agencies delayed modernization to satisfy immediate intelligence requirements as the global security environment became more complex and, by some accounts, more dangerous in terms of unpredictable or "wildcard" threats.
Paradoxically, in moving to be more responsive to decision makers' daily needs, intelligence was in danger of being perceived as a news or current affairs center -- one that could not compete with cnn. This was never an honest comparison or a worthy analogy. Intelligence agencies were not treated as a set of professional networks able synergistically to understand adversaries and provide relevant insight. And what is intelligence, to paraphrase Allen Dulles, if not the craft of outthinking our adversaries?
Thankfully, the craft of intelligence has once again become highly valued. Recruitment is up, intelligence is treated more favorably in the media and the entertainment industries, and bipartisan support once again is voiced for analysts. Some reports indicate that the cia is back at the top of the list for college graduates asked where they would like to begin their careers.
Gone from current discussions is the tired argument about the value of open-source as opposed to secret intelligence. An explosion in open-source information in the 1990s led some to question the comparative efficacy of existing intelligence sources and to champion alternatives, restating anew the old question about whether the business of post-Cold War intelligence is primarily about collecting secrets or the better use of available open-source information. Of course, as most intelligence professionals will argue, it involves both.
Pushing for open-source solutions created another debate that was politicized by those with an agenda to shrink the intelligence agencies. Unfortunately, new requirements for open networks and additional open-source analytic expertise were not matched with additional funding. New requirements were funded from modernization and community integration accounts. Exacerbating discussions of intelligence reform were a series of intelligence miscues in places like India and Iraq. They reinforced leadership concerns about giving the U.S. intelligence community more money. Would additional funds be spent to reinforce deficiencies or to correct them? In this environment, arguments that open sources could serve policy more efficiently gained credence beyond their merits.
A related problem concerned resource alignment. Unlike the current division of labor between the Joint Chiefs of Staff, the Office of the Secretary of Defense, the military services, and the combatant commands, U.S. intelligence agencies have both operational and acquisition missions. Even within the same agencies, this often leads to unhealthy competition for leadership attention between current operations and modernization, and potentially to inefficient resource allocations in the face of successive crises. In the fray of day-to-day intelligence support, it is often longer-term analysis and research and development on new sources of intelligence that suffers. During the 1990s, as intelligence consumers multiplied, human intelligence, signals intelligence, and imagery intelligence organizations experienced further deficits in their accounts for recapitalization and investment in new information-sharing networks. The diffusion of innovative analytic tools and the proliferation of collaborative environments suffered.
Moreover, instead of realigning agencies to meet tough challenges, too often the preferred solution was to create extra-organizational centers of excellence (e.g., the Counter Terrorism Center). This further complicated resource allocation and distracted leaders from modernizing the core structures of their agencies. At the same time, it proved our argument: Information-sharing challenges required the creation of new organizations that were free of the impediments to sharing in the existing agencies. We recognized seams in our own national security information apparatus but addressed only the symptoms -- patching some seams without fixing the underlying problem.
For over a decade, some 300 recommendations were made on the direction and management of U.S. intelligence, yet significant reform proposals lacked leadership focus and bipartisan support, especially in light of the pace of current operations. Subsequently, the solution to the intelligence community's information analysis and sharing problems was often to increase oversight and micromanagement from Congress or the executive branch. While understandable in hindsight, this paucity of actual intelligence reform was -- and remains -- at odds with the continuing need for timely, accurate, complete, and relevant information and knowledge throughout every aspect of national security.
Adaptations in thinking
Accounts of post-September 11 intelligence successes point to an ability to adapt in times of crisis. Operations against adversaries like al Qaeda and proven capabilities to locate, target, and capture or kill fleeing al Qaeda members reflect a traditional, highly technical, and sophisticated American approach to communications, wartime intelligence gathering, and the application of information technology to solve military challenges. Significant innovations in analytic methods and important integration activities surely prevented further attacks on the United States. Our intelligence analysts are taking care of business.
How they are doing their business is another issue. We tend not to adapt our processes and techniques to new challenges as much as surge ahead with them. That is, we move analysts and technical capabilities to the new crises to do more of what we did in the last crisis. We add more analysts and collect more data on the problem at hand. But step-level increases in collection and adding more analysts to the same processes are not viable long-term answers.
Rethinking U.S. intelligence is not an argument for simply increasing the pace, scope, and breadth of information collection. Volume is not the problem. Some 50 years on, U.S. intelligence remains overwhelmingly collection-centric. Some additional collection is needed -- but in focused areas and shared in ways that promote synergy among agencies. For example, domestic agencies should identify intelligence gaps and coordinate global collection plans to fill them. Collection that remains unexploited -- lacking analysis and contextual consideration -- may be as useless as no collection at all.
We believe that many within the intelligence community now recognize this point and are considering solutions. Many are discovering that information management, including optimal management of technical sources, has failed to keep pace with growing requirements for information processing, analysis, correlation, and dissemination across intelligence disciplines. We need to transform our mission management (optimize tasking) and management of analysts (work flows).
Some of this is already happening in homeland security. An underlying criticism of current internal U.S. government information networks involves the traditional American bifurcation of security affairs into national and international, a lingering proclivity to view national security as something that begins and ends at the border. This is largely due to political concerns and legal restrictions now under review for revision. The 9-11 attacks and the ensuing war on terrorism only reinforced arguments for the organizational and procedural blurring of "foreign" and "domestic" categories, which no longer provide a useful framework for organizing defense and security policies. In essence, al Qaeda exploited artificial organizational boundaries that served American citizens well for over 50 years -- boundaries designed to protect Americans at home from intrusions on their constitutional rights.
For cultural and historical reasons, it is revolutionary to place domestic intelligence on par with the support that decision makers receive from national foreign intelligence agencies like the cia. But as the current nima director, Lieutenant General (Ret.) James Clapper, notes about nima's capabilities to leverage satellite imagery and geospatial intelligence, "enormous advances in homeland security are possible by simply overlaying nima's current analytic and planning capabilities onto homeland security missions." It is time to bring our technological and analytic superiority home, where prudence suggests it should always have been. The technical capability for this change has long existed. It is time to remove the barriers preventing it, including the creation of new and more efficient oversight methods that are consistent with America's democratic values. While this may seem radical, we believe that it is one of the easier steps that can and should be undertaken.
Clearly, the legal and political boundaries for U.S. intelligence have to be reconsidered not only by our political leaders, but also by the public at large. Note that this is not an argument for giving free rein to criminal investigators whenever they encounter cases, crimes, or actors with alleged ties to suspected terrorists or terrorist groups. Implicit in our elaboration of the information-edge thesis is a steadfast fidelity to American core values regarding the rights of citizens and an unwavering commitment to civil liberties, including the fair treatment of noncitizens legally in the United States. One of the most important benefits of a domestic information-edge focus is the potential to dampen the negative effects of revamped policies and processes on noncitizens, the overwhelming majority of whom are attempting to follow in the footsteps of previous generations of immigrants toward the American dream.
Another reason to encourage further changes in intelligence support to homeland security is the possibility that doing so will engender a debate and political context conducive to overcoming traditional impediments to reform.
On U.S. intelligence reform
Sustaining america's information edge requires fewer hierarchical approaches to information and knowledge services. Ultimately, reform is not about intelligence in the classic sense of intelligence cycles and consumer-producer relationships. It is about information and knowledge, wisdom and foresight, agility and flexibility, leadership and vision. Unlike most corporate knowledge management approaches, and contrary to digital-age business models, until the late 1990s most end-to-end intelligence processes remained wedded to an artificial, Newtonian machine-parts perspective more appropriate for the nineteenth century than the current one.
Consider the prevailing views of the intelligence cycle. Experts have long recognized that the classic depiction of the cycle -- requirements or tasking, collection, processing, analysis, dissemination -- promotes too linear an approach to getting information to decision makers. And this cycle continues to exist for each discipline. At present, government "stovepipes" continue to define how information agencies (e.g., intelligence agencies) manage their respective domains, including day-to-day operations and acquisition processes. The recent transition from a central imagery tasking office, an activity managed by nima, to a broadened source management activity -- as well as the new analytic fusion initiatives between nima and the National Security Agency (nsa) -- represent an important move away from stovepipes.
Yet for situations like Afghanistan, Indonesia, Iraq, and Yemen -- and ongoing problems like countering nuclear proliferation -- the most compelling intelligence comes from small collaborative efforts between analysts from across the intelligence disciplines that engage in all-source analysis and have multi-int capabilities, which are not necessarily the same thing. Whereas all-source analysts have the ability and expertise to leverage information from any intelligence discipline or source (something that is done in practice by analysts in numerous agencies), multi-int analysis involves leveraging the frequently untapped characteristics of raw data from technical collectors within the all-source environment. Examples of this would be the synergistic overlay of imagery and signals intelligence atop detailed terrain and feature maps, the ability to combine tradecrafts for new types of interpretation and exploitation, a multidisciplinary analysis capability based on geographic referencing of disparate data sources, and new ways of structuring decision making that use hypothesis-driven methods to predict future courses of action.
American defense and intelligence planning evolved during the 1990s under the assumptions that faster is better, that existing processes and structures were capable of meeting new challenges, and that America's comparative intelligence advantage was unsurpassed. For the most part, this thinking led to mere incremental improvements in intelligence.
The contextual threads for intelligence described above -- a more complex security environment, an increased number of intelligence consumers with temporally demanding needs, and a political context of relative inattention -- meant that every time a U.S. national security crisis sprung forth, numerous reform proposals were tabled but few were implemented. Yet even when they were implemented, the reforms generally yielded minor qualitative improvements in capabilities. While patience is often a virtue when arrived at deliberately for strategic reasons, delay and indecision about reforming American intelligence were based on bureaucratic inertia and a reluctance to accept risk (political, technical, or another sort).
Since September 11, the most prominent public discussions about intelligence have centered on stale intelligence issues like the need for spies over technical intelligence and how to reorganize the boxes above and around the dci and the secretary of defense. Why is this happening? In part, organizational self-interest continues to restrict the realm of possibility concerning reorganization. But rather than focusing on rearranging the boxes -- overly risky in a time of war and uncertain in light of our complex security landscape -- we should focus on helping agencies work and share information better.
Defense and intelligence community efforts to quicken the pace and expand the scope of so-called horizontal integration efforts are a positive development. These efforts must overcome a variety of long-standing impediments to integration.
First, development of new methods for collaboration and expanding insight across government remain limited by our rigid divisions of intelligence disciplines (e.g., human intelligence, imagery intelligence, signals intelligence) and by legal and security impediments to information exchange. Differences between human intelligence and technical intelligence sources are often confused with different analytic and cognitive approaches to intelligence production and estimate writing. The sheer volume of information collected means that, in the filtering and sorting of information required just to begin analysis, we may be losing vital information. Filtering and sorting is not intelligence. Neither is the current penchant to talk of a new "process, post, and use" information cycle that further obscures the heart of intelligence: analysis.
Intelligence must be a more holistic enterprise. Efficiency should not be held up as the overarching goal at the expense of better understanding. Supporters of human intelligence, for example, often falsely associate human intelligence with some mythical or spiritual capability to understand cultures or adversary intent. In doing so, they frame their own reform ideas in terms of cost-benefit tradeoffs between human and other sources. This is wrongheaded. It also reflects the defensive posture of human intelligence enthusiasts lamenting past cuts in human intelligence programs. Of course we need better human sources, with all of the infrastructure and support this entails. But America also needs clandestine services that have overwhelming technological capabilities for covert surveillance, data transmission, and agent protection.
Second, where one sits with regard to intelligence continues to determine where one stands on reform issues. In information and intelligence, 10 years after the fall of the Soviet Union, we have not yet torn down our own walls. In spring 2002, some observers commented that the electronic communication from an fbi field office in Phoenix to fbi headquarters describing the activities of foreign nationals enrolled in flight schools did not constitute "intelligence." The case illustrates what has become an endemic problem and exposes its deep historical roots. This problem extends into the agencies as well.
A third reason for the lack of tangible intelligence reform stems from unwillingness among middle and senior managers to aggressively support innovation -- a syndrome perpetuated by scarce resources, dwindling tolerance of risk, and meager entrepreneurial activism at senior levels. We see these as negative externalities of the 1990s cutbacks in funding and work force reductions. Reform enthusiasts remain disappointed and aloof after 10 years of supporting what many see as a largely useless "reinventing government" fervor. For them, much political capital was depleted while little change was accomplished (and some careers were ruined).
A fourth impediment concerns the pathos of "studying without action." Most pressing intelligence issues have been studied and debated ad nauseam. By the end of the 1990s agencies found themselves beleaguered by a seemingly endless assault of commissions and studies on intelligence reform, all of which drained extensive resources but resulted in very limited change. Despite numerous reports and recommendations on the subject, for example, it remains painfully difficult to implement information system reforms because of complicated and divergent security regimes.
Another obstacle to intelligence community reform is the existing planning and budgeting system. Despite attempts to integrate processes in both the executive and legislative branches, intelligence-planning processes are essentially formalized systems to tend fiscal rice bowls. This is a far cry from the days in which a few senior leaders from both branches were involved in planning and budgeting, with the lion's share of the technical and programmatic integration done by the people actually responsible for conceiving, creating, and using intelligence systems. Some call this the era of "heroic leadership," where a handful of scientists and program managers could, for example, build and oversee the launch of entire satellite systems with minimal political interference.
Today, too many structural barriers and intellectual boundaries exist, including ingrained expectations about procedures and oversight mechanisms. Technical systems are no longer conceived and built in an environment structured to sustain an innovative spirit; rather, they emerge from a consensus-based process designed to satisfy as many standardized engineering requirements as possible. Planning occurs from the top down. One official lamented that Congress has become the systems integrator for the U.S. intelligence community. Systems integration, which should derive from technological best practices, has become a political and actuarial process that values integration within agencies at the expense of integration across agencies. As we argue here, this contradicts the direction in which American intelligence should be headed.
As stated above, form should follow function -- not vice versa. Compartmentalize the planning and funding of information and knowledge sharing and you will reinforce compartmentalization practices. Although difficult to implement, a more effective means of making oversight and other planning activities an enabler rather than an obstacle to knowledge creation and sharing would be to redesign the entire intelligence enterprise from the consumer's level. Doing so presumably would allow the pantheon of U.S. information and knowledge agencies to self-organize and adapt to the environment more freely, allowing our internal organizations and structures to reflect the complex and adaptive aspects of the world and its ever-changing reality. If form follows function, then perhaps the best place to begin thinking about reform is with a true national intelligence strategy that spans national, domestic, and military domains.
A final point concerns the tendency for intelligence "change" discussions to become stuck on marginal issues. Too much is riding on our ability to rethink sharing and collaboration for decisions to be delayed by debate on the margins of large issues, detracting from attention to core intelligence problems.
Outsmarting the adversary
Nye and owens were right. America's information edge is its ability to collect, process, act upon, and disseminate information: the ultimate comparative advantage in the digital information age. What they addressed only in passing is the extent to which others would benefit from the information age, making discontinuous advances in information collection and processing and developing asymmetric capabilities designed to thwart America's strengths.
An overwhelming source of advantage for American power -- information -- has value only when it creates knowledge, is used in specific decision-making situations to achieve a comparative advantage, and is provided early enough to influence outcomes (e.g., negotiation or war). What was known historically as "operating inside the enemy's decision loop" means that information needs must be serviced faster and better before an adversary has the information necessary to implement his asymmetric plans.
Historically, what the United States seeks to know before acting militarily or making a policy decision is comparatively much more complicated than what its adversaries require. America's global reach and the political context for our overseas involvement are among the first reasons for this; our relentless pursuit of precision in warfare is yet another. America's political processes, image abroad, and military doctrines are information-intensive. There are sound political and operational reasons why the United States tends to require more abundant, timely, accurate, and precise information than our adversaries do. Because information must be gleaned from databases and knowledge sets that are global in nature, and because American institutions increasingly reward precision, seeking accuracy over timeliness and initiative, adversaries enjoy a structural advantage in situations characterized by dueling information edges.
The evolution of American intelligence agencies during the Cold War proceeded apace with relations between Washington and Moscow and was organized in terms of the East-West polarization of international affairs. For most nations, intelligence-sharing activities at home and abroad unfolded within this framework, which scripted a narrow slate of intelligence requirements. This was true for the U.S. intelligence community as well as other national intelligence services. For example, the Israelis focused on Middle Eastern countries and their relationship with the Soviet Union and, perhaps of equal importance, on developments in Washington that affected the regional balance of power.
Today, global intelligence agencies operate within a much less structured framework, which effectively limits the ability of agencies to organize activities around a known set of security challenges with specific collection targets. Flexibility and adaptation are key. Concurrently, the diffusion of information technology and increased awareness of historical U.S. intelligence practices have increased the ability of adversaries to protect information or to deceive U.S. intelligence agencies outright.
Adversaries also draw on globally available information. Much of the electronic data that al Qaeda acquired prior to the September 11 attacks, for example, came from websites; individuals performing their own surveillance verified some of this information. Beyond internet-based sources of analysis about foreign military and security developments, new technical sources of information -- gps navigational data, commercial space imagery -- are also available to anyone who has an interest and a modest budget. Coupled with instantaneous communication through cell phones, instant messaging, email, and other sources, foreign governments and nongovernmental actors can be part of a "virtual" surveillance team, military action group, or terrorist cell.
In essence, the information age may have spawned a new intelligence age, an age characterized by a footrace to provide information to support U.S. national security decision making better than an adversary can obtain his own. Ostensibly, the United States is running a series of footraces against multiple adversaries, including nation-states as well as terrorists, all focused on defeating American intelligence activities in the context of their own strategies and security activities.
Often overlooked is the advantage afforded to others from commercially available information and information technology with relatively little security. Here, adversaries draw on two aspects of the footrace. First, the information age provides unprecedented access to data and analysis of relevance to security policy. Second, the comparative benefit such access brings is, for adversaries, multiplied by lower accuracy and precision thresholds for operations. While we might want to limit the impact of a strike to a particular location in a building, there is nothing that prevents an adversary from just wanting to destroy the neighborhood. In other words, where we require precision for political and operational reasons, they do not. This asymmetry is evident in Iraq, where insurgency tactics and the use of fear are being used strategically to undermine the coalition's stability initiatives.
This vulnerability does not justify censorship or control of these kinds of information, nor should it prompt a longing for the more information-limited period of the past. We are in a period of increased transparency in security affairs, one that should drive wholly new concepts of diplomacy, military operations, and intelligence, including the reforms discussed heretofore. Rather than thinking about control as the operating paradigm -- keeping digits buttoned up is a near-futile endeavor -- U.S. intelligence agencies must reach beyond simply moving faster and more efficiently; they must become qualitatively more effective in collecting, processing, disseminating, and acting upon information. In other words, in a rapidly changing information market, U.S. intelligence innovations must drive toward increasingly specific and specialized forms of information.
During the Cold War, there was an understanding of how war might occur and how each side would fight. Even if conflict occurred, a set of rules moderated behavior. A specter of nuclear war hung over us, and extraordinary measures evolved to prevent it. Consequently, even lower levels of conflict and regional crises remained within commonly understood rules. Wars involving suicide bombings, unconventional attacks on civilian populations, and economic terrorism were generally precluded by these rules or at least constrained from upsetting regional politics. Now, however, whatever advantages are currently enjoyed by the United States in terms of conventional forces (including manpower, weaponry, and mobility), American notions of limiting firepower and damage to the absolute minimum for political and moral purposes do not deter an adversary bent on blowing up an entire city, shopping mall, or neighborhood.
As doctrine for the war on terrorism evolves, American and allied information and intelligence support must change dramatically, requiring at the very least a new infostructure linking the spectrum of diplomatic, military, law enforcement, and other operations that sustains America's information edge in areas where asymmetrical information footraces are developing. If the United States is to win -- or even stay relevant -- in the intelligence footrace, it must approach information in a way that is radically different from its approach in the past. The intelligence community does seem to be moving in this direction.
Honing America's information edge
Intelligence reform and the importance of improving U.S. intelligence are again prominent in the minds of American decision makers, both inside and outside the intelligence community. The joint congressional inquiry on the intelligence surrounding September 11 found both factual and systematic deficiencies that created the conditions for successful attacks on the World Trade Center and the Pentagon. The creation of a dhs national warning system has provided some information related to possible terrorist attacks, but it also has created as much uncertainty as the system was designed to thwart. And threat-related hearings involving the dci and the fbi director have brought much-needed public attention to the fact that U.S. intelligence must be reformed as quickly and as smartly as possible. Intelligence sharing between federal, state, and local governments, as well as between government and private entities, seems to be the locus of public attention.
Rather than focusing solely on intelligence sharing as the goal of reform, and rather than merely increasing the number of terrorism analysts working within existing organizations, reform efforts should aim at transforming more than intelligence. The objective should be reforming the overall approach to end-to-end information processes, including the intelligence processes that underpin national security decision making. The procedure is straightforward and, initially, incremental. First, identify the information and knowledge needs of intelligence consumers. Then define the resources and processes required to meet them. Next, compare the needs and optimal structure with existing agencies and sharing processes. Finally, make required changes, including doing away with organizations, structures, or policies if need be. Overall, information sharing must be the focus of arguments for reforming national security and homeland security.
While many of the proposals for intelligence reform call for large-scale organizational changes, we believe that more practical solutions lie at a level beneath wholesale deconstruction of U.S. intelligence agencies or the intelligence community. Initiatives need to identify and adapt the tacit and explicit obstacles that prevent the sharing of intelligence and intelligence-relevant information across agencies at various levels. To cite a number of recent examples, among the problems associated with old approaches to knowledge management are artificial boundaries in analytic processes (e.g., the cia holding general warning data while the fbi held data about flight school training); inefficient databases (e.g., ins records on visas); impediments to interoperability (i.e., access to law enforcement data at the federal, state, and local levels); and a failure to sustain innovation across the intelligence community (few revolutionary collection or exploitation capabilities have been funded in the past decade).
While it is true that information technology has enhanced analyst communication and modernized some community interactions, the creation of information infrastructures within and between agencies has not created dynamic sharing relationships -- what we have called infostructures. In other words, while merely improving information pipes between people and agencies is easy -- this is the focus of many politically motivated initiatives -- it is a far cry from the cultural and procedural changes that will need to take place within and among organizations, especially if we are to deal with the analytic aspects of terrorism-related intelligence, such as dealing with fragmentary and deceptive information. It will also require true leadership. Information does not flow like water. Connecting the pipes merely creates the potential to share.
Organizationally, sustaining America's information edge also requires restructuring and realigning congressional committees to integrate defense and intelligence community funding and acquisition. Congressional streamlining to encourage innovation in information agencies will help create an environment more conducive to substantive change. It requires restructuring the budget and planning processes so that information and knowledge readiness ascend to the very top of the national security agenda. An information and knowledge readiness process is required, one that relates strategic information needs to agency programs intended to meet them. Decision makers in the executive and legislative branches must view the information edge as a readiness category that is coequal to traditional measures of defense preparedness.
People are the most important factor in honing the information edge. The mandated reduction in personnel that crippled intelligence capabilities in the 1990s created a long-term problem. Current policies requiring something similar to the joint service requirements in the military are not enforced, with many agencies seeking waivers. Central to future "joint intelligence" executive training must be information and knowledge management courses that address community information-sharing issues.
Realists understand that openness does not mean indiscriminate, undisciplined information sharing. Without some safeguards we undermine our advantage, perhaps leaving us more vulnerable than before. The answer lies somewhere along the spectrum between the current stovepipes, with their inherent knowledge seams, and the point where too much openness creates vulnerabilities.
We believe that the key to success in the global intelligence footrace is a renewed focus on innovation across the intelligence spectrum. In his classic Bureaucracy: What Government Agencies Do and Why They Do It (Basic Books, 1989), James Q. Wilson viewed innovations as new programs or technologies that "involve the performance of new tasks or a significant alteration in the way in which existing tasks are performed." We agree with Wilson that real innovations alter core tasks -- an extremely difficult undertaking for centralized, insular intelligence organizations that persist more as self-protective guilds than as the complex adaptive organizations required to anticipate and respond to rational, strategic adversaries engaging in asymmetric attacks. These adversaries are rational in that they learn, adapt, and organize based on our defenses; they are strategic because they have long-term objectives and engage in planning to meet them by adjusting to our actions, capabilities, and knowledge about the strategic environment. Managing knowledge to sustain America's information edge is less about infrastructure than leadership, engendering cultural change, encouraging entrepreneurial analysis, and learning to accept risk, whether in operational, informational, or acquisition processes. It requires focus and innovation at every level, with an active public debate about the strategic effectiveness and future direction of U.S. intelligence.
There is a need to nurture and reinvigorate the intelligence community's innovation ethos -- to reenergize and focus American ingenuity on emerging intelligence collection, analysis, and dissemination challenges. Doing so, in past eras, has underwritten both our leadership role in international security affairs and our ability to prevent conflicts or terrorist attacks at home and abroad. The global war on terrorism and the broader U.S. national security environment provide a context that is ripe for pursuing innovations across the Department of Defense, the Intelligence Community, and the Department of Homeland Security, a context that must be exploited to drive comparative information advantages against our adversaries. When the time comes, Congress and the administration must expend political capital to champion innovation without over-politicizing or otherwise biasing the process.
Feedback? Email polrev@hoover.stanford.edu.
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Malone move casts shadow over Murdoch succession
Chris Tryhorn
Thursday January 22, 2004
Malone: speculation he is planning takeover bid for News Corp
Questions were raised today about the future of News Corp after Rupert Murdoch's sometime-ally and sometime-foe John Malone became the second largest voting shareholder in the company through a shock overnight deal.
Mr Malone, a notoriously shrewd dealmaker who made his money in cable TV and owns QVC shopping channel and half of the Discovery network, increased his stake to 9%, a major change for News Corp as Mr Murdoch has never before had a shareholder with almost one third as many votes as him.
The deal immediately raised questions about Mr Malone's plans - some analysts have speculated as to whether he is planning a takeover bid and whether the move could scupper Mr Murdoch's succession plans involving his sons James and Lachlan.
Others believe it could be a sign of a new and formidable alliance between the two moguls.
Mr Malone's move cements his key position at News Corp, as the man who can confirm or deny Mr Murdoch's plan to pass control of the media group to his family.
"Privately the Murdochs will be meeting behind closed doors and asking 'what's going on here?'" one Australian analyst told the Australian Financial Review, which follows News Corp closely.
According to reports, Mr Murdoch only learned of Mr Malone's new holdings on Tuesday. "It is shocking that the transaction would take place without a phone call from Malone to Murdoch," a US media executive told the New York Times.
In terms of pure equity, Mr Malone's company, Liberty Media, now holds 17% of News Corp, exceeding the Murdoch family's 14%, and if it chose to swap more of its stock for voting shares it could get to a point where it could outvote the Murdochs.
Liberty's ?375m acquisition, announced in a US securities filing last night, took Wall Street by surprise.
Mr Malone has previously been seen as a passive investor who takes strategic stakes in media and technology companies, but there has been speculation he is moving towards a more proactive approach.
"There's a small chunk of ordinary shares that control a much bigger chunk of preference shares, that control a major chunk of English TV, and US TV," Macquarie analyst Alex Pollak told the AFR today. "That would be very attractive to a long-time cable player like Malone."
Mr Malone's decision to seek a bigger say in News Corp comes less than a month after Mr Murdoch sealed the acquisition of DirecTV.
The Colorado-based tycoon is notoriously secretive and at one point looked as if he was going to mount a rival bid for the US satellite TV company.
Ultimately, however, he stepped aside from the bidding, paving the way for Mr Murdoch to land a ?4bn deal that realised his dream of creating a worldwide satellite TV empire.
Mr Malone bought more than ?300m-worth of additional News Corp shares in March, which helped Mr Murdoch to finance the DirecTV transaction.
Mr Malone gained a substantial share in Mr Murdoch's company as part of News Corp's 2001 investment in US publishing and interactive TV company Gemstar but it was all non-voting stock.
The Murdoch family has remained unchallenged as by far the leading shareholder in News Corp, which has its origins in the Australian newspaper business founded by Mr Murdoch's father.
Mr Murdoch has made it clear he intends to keep the firm in the family, with sons Lachlan and James, the new chief executive of BSkyB, lined up to inherit his crown.
But if the family were seriously challenged or even outvoted, the path of succession might become less clear.
In a statement, the Liberty president and chief executive officer, Robert Bennett said: "We have capitalised on an opportunity to exchange non-voting shares for voting shares at attractive prices to become the second largest voting block on one of the world's premier media companies."
News Corp said it welcomed the investment. "In our view this is a another sign of confidence in our company's health and future strategy by Dr Malone," a News Corp spokesman told AFP.
Liberty has strategic investments in other media giants such as Time Warner, Viacom and Vivendi Universal.
Mr Malone is expected to play a pivotal role in the likely merger between UK cable companies Telewest and NTL, taking stakes in each company following their restructuring processes.
? To contact the MediaGuardian newsdesk email editor@mediaguardian.co.uk or phone 020 7239 9857
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>> STRUCTURAL DEFICIT OR NOT?
from the January 28, 2004 edition - http://www.csmonitor.com/2004/0128/p01s03-usec.html
Deficit forecast collides with Bush's plans
Projections of $477 billion budget gap sharpen debate over extending tax cuts.
By Peter Grier | Staff writer of The Christian Science Monitor
WASHINGTON - The nation's fiscal outlook has now come full circle in three years: from sunny surplus to deficit overcast as far as economists can see.
Things have become so bad that some analysts believe President Bush may be starting to scale back aspects of his domestic spending agenda. For instance, Bush's State of the Union speech included no mention of his proposal to send men to Mars, an expensive proposition that had received a cool reception in Congress.
But Bush has only redoubled calls to make his tax cuts permanent, and there's increasing evidence that such a move might make it extremely difficult to fulfill another of his pledges - halving the deficit by 2009.
"Extending the tax cuts is the largest single policy change they're talking about - that alone would expand the deficit by $2.2 trillion over 10 years," says Robert Bixby, executive director of the Concord Coalition, a fiscal watchdog group in Washington.
A new forecast issued by the Congressional Budget Office (CBO) on Monday emphasized the scale of the deficit problems ahead.
This year's deficit will be a record in dollar terms, at $477 billion, according to CBO. That's equal to about 4.5 percent of the nation's gross domestic product.
Economists consider the size of the deficit as percentage of GDP to be an important measure of what the nation can afford. By this standard the record US deficit was that of 1983, at around 6 percent of GDP. Without any changes in spending or tax policy, the deficit might gradually fade away, according to CBO's new numbers. By 2014, the budget might actually return to surplus.
But Washington abhors legislative stasis, and it's virtually certain that the White House will propose and Congress will pass major bills in coming years. Making permanent all of the Bush tax cuts now set to expire would result in deficits of around $300 billon a year for the foreseeable future, absent spending cuts.
Curbing a scheduled increase in the alternative minimum tax would add around $25 billion a year to the deficit. Expansion of the just-passed Medicare prescription drug benefit might add billions more - as might a manned mission to Mars.
Since the CBO last issued budget projections in August, its 10-year accumulated deficit estimate has increased by $1 trillion - mostly due to spending changes. "About 70 percent of that [increase] results from new legislation, such as the Medicare law," says CBO's report.
The Bush administration explains the huge deficits as primarily the result of the recent recession. Furthermore, they see the tax cuts as providing needed stimulus to a slow recovery and encouraging business investment that will produce new jobs. Many economists agree that the first installments of the tax cuts did provide a short-term boost. But they warn that extended deficits are risky and could do long-term damage to the US GDP.
"We think large, sustained deficits matter very much," said Alice Rivlin, a senior fellow at the Brookings Institution, at a recent seminar marking the release of a study on deficit issues.
That's because the government has to borrow to pay the deficits, and that means they compete with private borrowers, putting upward pressure on interest rates. Deficits in the range of 3.5 percent of GDP will eventually raise long-term interest rates by one or two percentage points, said Ms. Rivlin. "That translates into lower capital expenditures, lower productivity growth, lower GDP," she said. "We estimate that it means about $1,800 less income per household in 2014."
There's also a chance - although a relatively small one - that sustained deficits might cause other nations to lose confidence in US economic stewardship, and foreign investors to begin pulling money out of the US. That could cause US interest rates to spike even higher.
Administration officials retort that such talk is alarmist. The president has said he will halve the deficit within five years, "and that's what we intend to do," White House spokesman Scott McClellan said Monday.
The administration's $2.3 trillion budget proposal is due in Congress on Monday. It will hold nondefense, nonsecurity spending to a 0.5 percent increase, according to the White House.
But spending is not the part of the budget that is out of line with historical trends, according to some analysts.
CBO's new figures predict that US government revenues will fall to 15.8 percent of the economy in 2004, the lowest since 1950, according to an analysis by the Center on Budget and Policy Priorities.
Income tax revenues will be 8 percent of the economy, the lowest since 1942, according to the generally liberal-leaning group. "Spending has grown in recent years, particularly in the areas of defense, international affairs, and homeland security," notes an analysis by the group. "Spending has not attained especially high levels in historical terms, however, and the spending increases that have occurred have been considerably smaller than the revenue declines."
* David R. Francis contributed to this report
Posted by maximpost
at 3:08 PM EST
Updated: Wednesday, 28 January 2004 3:50 PM EST
