Unrestricted Innovation: The Supply Chain Battlefield

Oct 31, 2025

Join Dr. Fiona Murray, a leading expert on innovation at MIT, and retired Marine Corps Lt. Col. Dr. John Griffin from the Defense Innovation Unit as they explore the strategic competition over supply chains. They discuss how China dominates critical drone components by leveraging consumer electronics. The conversation covers the capital gap in manufacturing, initiatives like Blue Manufacturing, and the importance of trust in supplier networks. They also highlight the intersection of economic security and modern warfare, emphasizing the need for rapid innovation to deter adversaries.

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INSIGHT

Supply Chain Geography Is Not Inevitable

Many drone components were invented in the U.S. and allies but are manufactured in China, so the geography of the supply chain is not inevitable.
Mapping an "anatomy of a drone" reveals control points where China leveraged consumer electronics scale to dominate production.

INSIGHT

The Missing Middle Is Capital, Not Talent

The "missing middle" is a capital gap between early venture funding and large-scale manufacturing finance that blocks hardware scaling.
Closing it requires later-stage growth capital, supply-chain financing, and debt for factories to couple innovation to industrialization.

ADVICE

Locate Where Talent And Capital Cluster

Place DIU offices inside innovation ecosystems to connect startups, investors, and warfighter needs and to reduce barriers to contracting.
Presence signals long-term buying intent and helps companies navigate Pentagon procurement pathways.

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Episode 139 examines how supply chains have become instruments of strategic competition and the implications for U.S. defense capabilities. Our guests discuss how China gained control over critical drone components originally invented in the United States and what this means for economic security and irregular warfare.

Our guests begin by analyzing the "anatomy of a drone" to reveal how China leveraged consumer electronics manufacturing to dominate military supply chains. They then examine the "missing middle" in capital formation between venture funding and manufacturing scale, and how this gap undermines America's ability to compete in protracted economic campaigns. Finally, our guests discuss DIU's initiatives like Blue Manufacturing and Forge to rebuild domestic production capacity, the challenge of creating trusted supplier networks with allies, and how economic infrastructure has become both an offensive and defensive tool in modern warfare.

Dr. Fiona Murray is the William Porter Professor of Entrepreneurship and Associate Dean of Innovation at MIT Sloan School of Management. She chairs the NATO Innovation Fund, a €1 billion venture capital fund investing across 24 NATO allies. Her recent research examines drone supply chain vulnerabilities and the geography of innovation. She previously served on the UK Prime Minister's Council of Science and Technology and holds a PhD from Harvard.

Dr. John Griffin leads the Autonomy Portfolio and Boston office at the Defense Innovation Unit (DIU). A retired Marine Corps Lieutenant Colonel with 28 years of service. He previously taught at the U.S. Naval War College and led regional engagement for the National Security Innovation Network. He holds a doctorate from Northeastern University and a master's from Harvard.

All views expressed in this episode are the personal views of the participants and do not represent those of any government agency or of the Empirical Studies of Conflict Project.

Intro music: “Unsilenced” by Ketsa

Outro music: “Launch” by Ketsa