The Future of Weapons and War

Last week, something groundbreaking happened.

You may have missed it in the wake of various media frenzies, but I promise you — the effects of this event are far more profound than Kim Kardashian’s rear end, Matt Taylor’s shirt, and perhaps even the Rosetta comet landing all combined into one.

The event I’m describing has to do with lasers — laser guns, to be exact.

And while I know that might sound a bit outlandish at first, please consider the fact that we did just land a spacecraft on a moving comet last week. That’s to say, we’re living in an age where many technologies reserved for the “future” are already here with us in the present.

As of November 14, the U.S. military revealed it will be using lasers as potential weapons in real-life combat scenarios.

To be clear, we’re not talking about laser sights or laser guidance — the U.S. Navy has outfitted the USS Ponce command ship in the Persian Gulf with a 33-kilowatt laser weapon system capable of destroying small aircraft and boats.

The Laser Weapon System (LaWS) has been in development for the last seven years and costs a total of $40 million (that’s relatively cheap) to produce.

As with any new piece of military technology, it’s being rolled out as a prototype, but barring any major operational flaws, we can expect to see an increasing number of these and similar systems over the next several decades.

The LaWS works by focusing up to six commercial-grade welding lasers on a single point to create various levels of heat. This allows its power to range from disruptive warning shots to destructive blasts of energy.

According to Vice Admiral John Miller, firing the system costs only about a dollar a shot, which is incredibly impressive considering that RIM-67 Standards (the primary air defense missile for the U.S. Navy) cost $509,000 apiece.

Pew Pew!

Providing engineering support and components for the LaWS were Pennsylvania State University’s Electro Optics Center and L-3 Communications Holdings Inc. (NYSE: LLL). L-3 was up about 2.4% on the announcement.

You may want to hold off before investing at this point, though, as BAE Systems (OTC: BAESY), Northrop Grumman (NYSE: NOC), and Raytheon (NYSE: RTN) are all leading teams to field an even more powerful laser weapon by 2021.

Interestingly enough, some of the firms developing these laser weapon systems are the ones that stand to lose the most from its cost efficiency. Raytheon, for instance, derives a significant portion of its sales from missile systems like its $600,000 Tomahawks and missile defense systems such as its $3 million MIM-104 Patriots.

Of course, the current LaWS by L-3 is only effective against small boats and aircraft, so you can expect missiles to retain their relevance for the immediate future.

Nonetheless, it’s worth considering the long-term bear case for physical ammunition over the next several decades.

Living in the Future, We Are

Aerospace and defense firms are all in a perpetual and literal arms race. If a company doesn’t innovate, it doesn’t survive.

The gun killed the sword, the bullet killed the arrow, and the laser will kill the missile — that’s the nature of this business.

Historically, this commercial arms race has most benefited the companies producing things that kill. The deadlier the weapon, the better — that’s been the guiding principle for weapon development for thousands of years.

But over the last few decades, this trend has begun to slow — or even reverse. No longer is our primary focus on being as destructive as possible… it’s now on being as efficient as possible. Modern military weapons, while certainly nowhere close to perfect, are built to minimize civilian and sometimes even enemy casualties.

The prospect of a casualty-free war might seem farfetched, but that’s certainly the direction in which we’re moving. Yes, predator missiles have killed close to 200 children over the last decade, but that’s a far cry from the lethality of unguided bombing methods commonly deployed in the past.

I’m not going to weigh in too much on the ethics of war here, but limiting causalities (especially civilian casualties) is definitely an ideal we should be striving for. Laser systems, among other non-lethal and precision weapon systems, will no doubt be a part of that equation.

The term “safe-weapon” may certainly come off as an oxymoron, but between the widespread deployment of non-lethal tasers within law enforcement and the innovative use of “sound cannons,” it seems that potentially lethal conflict is, at the very least, becoming less deadly.

The fact is, we live in a time when the entire world is always watching. Thanks to cameras on mobile phones and constant interconnectedness, governments cannot get away with the same atrocities or abuses they used to, which means the demand for non-lethal and precision weaponry is growing. 

And while it’s easy to equate war with death, some of the greatest military investment opportunities over the next few decades will be in companies developing non-lethal solutions, not missiles and bombs.

Until next time,

Jason Stutman

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