Updated February 3, 2021
Defense Primer: The National Technology and Industrial Base
What Is the NTIB?
advantages of potential adversaries, recent trends have
The National Technology and Industrial Base (NTIB)
exacerbated concerns regarding the ability of the
consists of the people and organizations engaged in national
Department of Defense (DOD) to maintain this dominance
security and dual-use research and development (R&D),
in the future. The sharp decline in U.S. defense R&D
production, maintenance, and related activities within the
spending as a share of global R&D spending, together with
United States, Canada, the United Kingdom, and Australia.
the rise of the private sector in driving innovation, signify
The NTIB, as established by 10 U.S.C. §2500, is intended
continuing challenges to DOD’s reliance on technology for
to support national security objectives of the United States,
battlefield advantage.
including supplying military operations; conducting
Analysts and DOD officials increasingly assess that allies
advanced R&D and systems development to ensure
and potential adversaries alike are achieving technological
technological superiority of the U.S. Armed Forces;
parity with—and in some instances have already surpassed
securing reliable sources of critical materials ; and
certain capabilities of—the U.S. military. In the FY2017
developing industrial preparedness to support operations in
wartime or during a national emergency.
NDAA (P.L. 114-328), responding in part to this concern,
Congress expanded the NTIB to include the United
Establishing the NTIB
Kingdom and Australia. S.Rept. 114-255 describes global
R&D as shifting abroad, in part to avoid U.S. technology
During World War II, shipments of critical wartime
transfer and export control rules, raising concerns that
materials to the United States were disrupted. To ensure a
supply of defense articles in future conflicts, Congress and
innovation may be increasingly conducted overseas with
the executive branch sought to establish a more robust
technology more readily available to potential adversaries
domestic defense industrial base. Over the next half-
than to the U.S. military because of the lack of civil-
century, evolving U.S. national security objectives led to
military integration of the [NTIB].
new legislation and regulations addressing the defense
Congress also directed DOD to create a plan that would
industrial base, dual-use critical technologies, and
promote closer integration of the technology and industrial
manufacturing technology. Defense spending, particularly
bases of all NTIB member countries.
significant R&D investment, was critical to the
advancement of U.S. military and industrial technology.
How Does the NTIB Operate?
Following the end of the Cold War, Congress grappled with
The National Defense Technology and Industrial Base
the economic implications of predicted significant cuts in
Council (10 U.S.C. §2502) is responsible for ensuring
U.S. defense spending. Responding to the perceived
interagency cooperation in promoting the NTIB and
“failure of the Department of Defense to undertake serious
providing advice to the President. The council consists of
technology and industrial base planning”—and the need to
the Secretaries of Defense, Energy, Commerce, and Labor,
maintain a national technology and industrial base capable
and other officials appointed by the President. While the
of meeting future national security and economic
U.S. government has a governing body to coordinate
challenges—Congress mandated a more active federal
activities across agencies, no such structure with
government role in shaping the U.S. technology and
representation of all NTIB member countries exists.
industrial base through provisions in the FY1993 National
Defense Authorization Act (NDAA). These provisions
The Secretary of Defense is also required to take certain
consolidated existing defense industrial base policies into a
steps, such as establishing a national security strategy for
single chapter of the U.S. Code and enacted additional new
the NTIB based on a prioritized assessment of risks and
policies and requirements, including establishing the NTIB,
challenges to the defense supply chain (10 U.S.C. §2501)
formalizing in statute what had been a traditionally close
and submitting an annual report to Congress addressing
United States-Canada defense cooperation relationship.
NTIB capabilities, performance, and vulnerabilities (10

U.S.C. §2504).
DOD and the Global R&D Landscape
Statutory Benefits of NTIB Membership
See CRS Report R45403, The Global Research and Development
NTIB countries benefit from certain limited statutory
Landscape and Implications for the Department of Defense.
preferences. Procurement of conventional ammunition can
be restricted to NTIB sources and must be from the NTIB
in a national emergency or when necessary for industrial
Expanding the NTIB
mobilization (10 U.S.C. §2304). Fire-resistant rayon fiber
While the U.S. military has historically conceptually used
in uniforms may only be procured from a non-NTIB
advanced technological capabilities as a strategic
member if NTIB sources are not available (10 U.S.C.
counterbalance to superior force size and geographic
§2533a note). NTIB manufacturers are generally exempt
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Defense Primer: The National Technology and Industrial Base
from domestic sourcing restrictions on buses, chemical
economies. Together with the current NTIB members, these
weapons antidotes, ball and roller bearings, and certain
countries represent nearly 40% of the world’s GDP. The
components for naval vessels (10 U.S.C. §2534). As of
World Intellectual Property Organization 2020 Global
August 2019, DOD must develop a process for deciding if
Innovation Index also lists several of these countries, as
certain items must be procured from NTIB sources (P.L.
well as the Netherlands and Denmark, as among the most
115-232, §844). Some NTIB entities may also be exempted
innovative. Methodology and accuracy of these rankings
from the foreign ownership, control, or influence
notwithstanding, some have argued that working closely
requirements of the National Industrial Security Program
with some of these countries—whether by expanding NTIB
and, as of October 1, 2020, are to be exempt from the
membership, strengthening bilateral agreements, or
requirement to obtain a national interest determination to be
leveraging multilateral arrangements—could increase U.S.
awarded a contract under a national security program (10
access to technology and other critical innovations.
U.S.C. §2536).
Considerations for Congress
How Effective Is the NTIB?
Officials from the United States and other NTIB member
countries have stated that, while coordination is moving in
Some analysts argue that domestic sourcing requirements,
the right direction, the industrial bases are not meaningfully
such as the Buy American Act (41 U.S.C. Ch. 83) and the
integrated. Furthermore, some contend that the NTIB
Byrnes-Tollefson Amendment (10 U.S.C. §8679), hinder
currently falls short of the aspiration of a seamless
effective integration. Small business set-asides that apply
integration of the “transfer of knowledge, goods, and
only to American small businesses can also be a barrier to
services” called for in the FY2017 NDAA. Potential related
integration. Cross-border partnerships with U.S. small
considerations for Congress include the following options.
businesses could help foreign firms circumvent these
restrictions, but inconsistencies among NTIB countries,
Establish a governing body of NTIB members: A 2019
such as different thresholds to qualify as a small business in
Atlantic Council report called for establishing a high-level
the United States, can make integration more difficult.
group of senior officials from member countries to facilitate
Others argue that these measures reflect higher public
better coordination and cooperation. While the FY2019
policy priorities and should be enhanced, not weakened.
Annual Industrial Capabilities report noted that members
Some analysts and officials also point to the U.S. export
had committed to regular meetings and had reached a new
control system for certain categories of defense articles and
information sharing agreement, it is unclear whether these
services as a barrier to closer integration.
activities are steps toward establishing a governing body.
Opponents could argue that a more formal structure would
For example, the International Traffic in Arms Regulations
add unnecessary layers of bureaucracy and hamper
(ITAR), administered by the State Department, restricts the
coordination.
export of defense-related articles and services that are
Amend laws affecting integration of the NTIB: Some
inherently military in character and, if exported, could
analysts and government officials have called for
jeopardize U.S. national security or foreign policy interests.
overhauling technology transfer, socioeconomic, export,
Compliance with the ITAR requires individuals or business
and related laws and regulations to promote more effective
entities to obtain a license from the State Department in
integration. Others have argued for tightening these policies
order to export covered materials. While the ITAR provides
to emphasize the promotion of domestic industry.
licensing requirement exemptions for some U.S. exports to
Increase international cooperation: Congress could also
Canada and temporary imports from Canada to the United
expand the NTIB to include other allies with shared
States, not all ITAR-controlled items fall under the
interests and robust industrial bases. A successful expansion
Canadian exemptions. Similar ITAR exemptions are not
of the NTIB would likely rely on current members trusting
currently available to the other members of the NTIB.
new members; without the buy-in of current members,
Additionally, while the United States has bilateral defense
expansion could decrease integration. An increase in
trade cooperation treaties with the United Kingdom and
membership could also make it more difficult to coordinate
Australia, some analysts and officials do not consider them
joint activities and policies. Some officials suggest focusing
to be effective.
instead on improving current NTIB integration.
Alternatively, Congress could strengthen international
DOD Cooperation with Other Allies
agreements to increase access to, and collaboration in
DOD is actively strengthening defense cooperation
developing, technologies and critical items.
partnerships with non-NTIB countries. The FY2020

Industrial Capabilities report notes that DOD has promoted
Other Resources
cooperation with other allies through mechanisms such as
the U.S.-India Defense Technology & Trade Initiative
Department of Defense, FY2020 Industrial Capabilities.
(DTTI), as well as security of supply arrangements and
Atlantic Council, Leveraging the National Technology Industrial
reciprocal defense procurement memoranda. Seven allied
Base to Address Great-Power Competition, 2019.
countries (including all NTIB members) are also
CSIS, National Technology and Industrial Base Integration, 2018.
participating in the F-35 Joint Strike Fighter Program.
However, while some of the world’s most innovative
Heidi M. Peters, Analyst in U.S. Defense Acquisition
countries are generally considered U.S. allies, they are not
Policy
part of the NTIB. For example, the 2020 Bloomberg
Innovation Index describes Germany, South Korea,
IF11311
Singapore, Switzerland, and Sweden as the most innovative
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Defense Primer: The National Technology and Industrial Base


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https://crsreports.congress.gov | IF11311 · VERSION 10 · UPDATED

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