Illustration: Sarah Grillo/Axios

There are few words as beloved in the defense-tech zeitgeist as "scale" and "mass." And it makes sense: War is a numbers game.

Why it matters: It's go big or go home for production lines, as a potential Chinese invasion of Taiwan haunts Beltway thinkers and a protracted war in Ukraine proves just how quickly stockpiles evaporate.

Driving the news: The Ronald Reagan Institute's third annual National Security Innovation Base report card, published Tuesday, paints an uncomfortable picture.

Here are some of the study's findings:

  1. The U.S. blazes the innovation trail, earning an A- for leadership, a B+ for available cash and another B+ for the growing sense of competition. There were four consecutive quarters of defense-tech venture capital growth last year, from $4.4 billion to $14.7 billion.
  2. But the country struggles with modernization and capacity, with caches of "critical weapons" remaining "dangerously low." Both scored a D. Customer clarity — the coherence of conversation between buyer and seller — was slightly better at D+.
  3. International cooperation is middling at a C. The labyrinthine foreign military sales process is "interfering with core national security and foreign policy objectives."

What they're saying: "I feel like there's this bias or mindset that hardware is not valuable, hardware is not sexy. 'Why can't we just outsource this stuff?' And that's kind of the problem we've been in," Paul Kwan, who leads General Catalyst's global resilience team, told Axios.

State of play: Defense contractors are erecting factories and expanding footprints. Others are inking their blueprints.