Reliance on foreign suppliers in the defense industrial base rose — notably in packaged software and IT services — even as calls for reshoring increase, according to a new report.
Reshoring the defense supply chain may reduce national security risks, but a new report detailing a heavy dependency on goods and services from foreign countries like China shows reshoring may be easier said than done.
Researchers at Govini, a decision science company supporting the defense industry, analyzed data from over 1,000 Defense Department vendors across 100 industries to show how supply chain reliance on products from foreign countries has increased over the past decade. According to the survey, the number of Chinese suppliers in DOD’s base increased by a total of 420% since 2010.
For cyber and information technology, two statistics stick out. The share of companies based in foreign nations in the supply chain grew the most in the packaged software and IT services between 2010 and 2019. Companies based in foreign countries made up 3% of the packaged software supplier base in 2010. That number rose to 7% in 2019. The numbers are similar for IT services: Companies based in foreign countries made up 3% of the IT services supplier base in 2010 and 7% in 2019.