The defense industry might be too cautious to fully take advantage of the improving budget environment, according to Pierre Chao. Speaking at an Oct. 30 Professional Services Council conference, Chao, founding partner at Renaissance Strategic Advisors, said the industry may be too skeptical about the budget boost to prepare for it. "If you're having your foot on the brake all the way up because you're afraid about when it's going to turn... and you're not positioned for that upturn, you're going to leave a percentage of that growth on the table," he said. "This industry knows how to handle downturns," Chao continued. "Everybody knows how to cut costs ... and you could do that in your sleep. Ironically enough, I think we have harder issues on up-ramps in terms of capacity." He also said the Pentagon, which has been touting innovation, will have to clarify what it will give up for lower-cost products.
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