This is an intriguing addition to the literature on military innovation. Dombrowski and Gholz test the hypothesis that the transformation of U.S. military capabilities will require a transformation of the defense industrial base, as stolid old corporations are displaced by more agile and entrepreneurial firms steeped in the culture of the information economy. They describe in detail the collection of political and industrial processes at work in four recent areas of innovation: small ships, unmanned aerial vehicles, communications, and systems integration. As they do so, the extent of the advantages of the traditional defense contractors becomes apparent -- their close links with military customers, connections to Congress, and grasp of the extraordinary bureaucracy and regulatory framework of the Pentagon. The authors claim to have provided a new theory of military innovation, although the context is very American. It all makes sense but is vaguely depressing.