of the total delivered executable source lines of code) were commercial off-the-shelf (COTS) or open source.¹⁴

It is also significant because software capability has become a strategic source of market differentiation in many industries, from financial services and health care to telecommunications and entertainment. A 2002 report by the National Research Council’s (NRC’s) Board on Science, Technology, and Economic Policy¹⁵ noted that since 1995 the IT and networking industries had accounted for 20 percent of the nation’s economic growth, even though they accounted for only 3 percent of gross domestic product (GDP). Comparable figures exist in the European Community—the information and communications technology (ICT) sector represents just above 5 percent of the European GDP, but reports show that ICT drives 25 percent of overall growth and about 40 percent of the increase in productivity.

Finding 1-1: Software has become essential to a vast range of military system capabilities and operations, and its role is continuing to deepen and broaden, including interlinking diverse system elements. This creates both benefits and risks.

Military system capability is heavily dependent on software, which has become an enabler for much of the functionality and flexibility of our war-fighting systems. Software has proven to be a differentiator in system capability for a wide range of current systems such as the F-22, F-35 Lightning II, and the Aegis Combat System. Software to modify and integrate existing capabilities was a key enabler in the February 2008 successful shoot-down of an errant U.S. satellite as it tumbled back to Earth.

This critical role of software in defense is also noted in the more recent DSB Task Force report on foreign software, which states, “The DoD now relies upon networked, highly-interconnected systems for many mission-critical capabilities, and this reliance is projected to increase. The software in these systems is the key ingredient that provides much of the increased capability delivered to the warfighter, just as it represents the key factor in increased productivity and new capabilities for industry today. For the DoD, this advanced technology is a force multiplier.”^16,17 A high level of software capability is also important in producing defense systems. For example, very-large-scale, highly networked, and crypto-secured software systems were needed for the robotic design used to construct the production line for F-35 manufacturing.

Given the importance of software to the DoD, a vital question is how the department can ensure that it will be able to meet its software needs now and into the future. The subsequent chapters of this report explore significant facets of this issue.

Software provides the means to manifest the modeling and simulation capability now essential in the design and testing of advanced military platforms and weapons in all branches of the DoD. These design-focused software capabilities can save millions of dollars—all before the first piece of metal is bent. But perhaps even more importantly, in these early stages this software capability enables the customer to focus on driving out risks related to the definition of weapons and systems functionality and