AI Strengthens Strategic Innovation and Modern Defense System Effectiveness

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FORMOSA NEWS

Artificial intelligence, or AI, is becoming an important part of modern defense systems. A 2026 study by Ferdinand Hasudungan Siagian, Nefra Firdaus, and Harri Dolli Hutabarat from the Republic of Indonesia Defense University and the Army Polytechnic found that AI can strengthen strategic innovation and improve the effectiveness of defense organizations. The findings are important because they show that the value of AI does not come only from advanced technology, but also from how well an organization uses that technology to improve strategy, planning, and decision-making.

The rapid development of AI has changed how defense organizations respond to complex security challenges. AI is now used to support intelligence analysis, situational awareness, decision-making, cybersecurity, autonomous systems, and defense resource management. In a changing global security environment, the ability to use digital technology effectively has become an important factor in improving adaptability and operational performance.

Previous studies have discussed AI in defense from technical, ethical, institutional, and policy perspectives. However, fewer studies have clearly explained how AI can lead to strategic innovation and then improve defense system effectiveness. This study focused on the relationship between AI utilization, strategic innovation, and the effectiveness of contemporary defense systems.

The researchers used a quantitative approach involving 186 professionals working in defense and strategic management. The respondents were selected because they had relevant knowledge and experience in defense organizations, strategic planning, technology, and management. Data were collected through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling, or PLS-SEM. This method helped the researchers examine both direct and indirect relationships between AI, innovation, and defense effectiveness.

Most respondents had strong professional and educational backgrounds. They worked in defense operations, strategic planning and policy, defense technology, AI and data, as well as defense research and education. This made the sample relevant to the study because the respondents were familiar with both organizational strategy and the use of technology in defense.

The study found that AI utilization had a strong positive effect on strategic innovation. The relationship had a coefficient of β = 0.680, making it the strongest direct relationship in the research model. In simple terms, the more effectively defense organizations use AI in strategic activities, the more likely they are to improve their planning, information analysis, decision-making processes, and organizational capabilities.

AI also had a positive and significant direct effect on defense system effectiveness, with a coefficient of β = 0.281. This means AI can help defense organizations process information faster, improve situational awareness, use resources more efficiently, and respond more effectively to changing conditions. However, this direct effect was smaller than AI’s effect on strategic innovation.

Strategic innovation also played an important role. It had a positive effect on defense system effectiveness, with a coefficient of β = 0.522. This finding suggests that advanced technology alone is not enough. Defense organizations also need to update their strategies, improve coordination, adjust resource allocation, and develop better ways of responding to new challenges.

One of the most important findings was the role of strategic innovation as a bridge between AI and defense effectiveness. The indirect effect of AI through strategic innovation reached β = 0.355, while the total effect of AI on defense system effectiveness was β = 0.636. This shows that AI creates greater value when it first encourages strategic and organizational change. In other words, buying or adopting AI technology is not enough. Organizations need to turn that technology into better strategies and working processes.

The research model explained 46.2 percent of the variation in strategic innovation and 55.1 percent of the variation in defense system effectiveness. All four hypotheses in the study were supported by the data. The results consistently showed that AI supports innovation, innovation supports effectiveness, and AI can also improve effectiveness through strategic innovation.
The researchers also stressed that successful AI transformation depends on more than software, algorithms, or digital infrastructure. Human skills, data quality, organizational readiness, trust in AI systems, and technology governance also matter. These factors influence whether AI becomes a useful strategic capability or remains only a technical tool.

For defense leaders and policymakers, the findings suggest that investment in AI should be combined with investment in people and organizations. Defense institutions need stronger human resource skills, better data integration, improved analytical capabilities, flexible planning systems, organizational learning, and effective human–AI decision-making mechanisms. Good governance is also necessary to ensure that AI is used with accountability, transparency, security, and proper oversight.
Overall, the study shows that AI can support more adaptive and effective defense systems, especially when it is integrated into strategic planning and organizational innovation. The main message is clear: the success of AI in defense depends not only on having advanced technology, but also on the ability of organizations to use it wisely, strategically, and responsibly.

Author Profiles

Ferdinand Hasudungan Siagian is affiliated with the Republic of Indonesia Defense University. The article lists him as the corresponding author.

Nefra Firdaus is affiliated with the Army Polytechnic.

Harri Dolli Hutabarat is affiliated with the Republic of Indonesia Defense University.

Research Source

Siagian, F. H., Firdaus, N., & Hutabarat, H. D. (2026). “Artificial Intelligence and Strategic Innovation in Contemporary Defense Systems.” International Journal of Integrative Research (IJIR), Vol. 4, No. 9, pp. 775–794.

DOI: https://doi.org/10.59890/ijir.v4i9.5