Defense Innovation Is Falling Short
After six years of dedicated effort, the Pentagon’s innovation initiatives are still far from meeting their goal. Despite some notable successes, the Defense Department is missing a key opportunity to deliver on its promise of putting transformational technologies into the hands of U.S. servicemembers. Over the past several years, there has been a significant increase in Defense Department offices and initiatives focused on engaging the commercial high-tech marketplace: the Defense Innovation Unit, MD5 (now the National Security Innovation Network), SOFWERX, AFWERX, NavalX — the list goes on. Meanwhile, the defense research enterprise has continued its practice of close collaboration with the academic community. While there are many similarities between the research and commercial high-tech communities, they tend to operate in parallel stovepipes, each with its own set of challenges and limitations. If we break down these stovepipes, we will find that each contains the means to address the shortcomings of the other. Researchers can help venture capitalists and startups access the most cutting-edge science. Commercial innovators, along with the Pentagon’s various organizations designed to make it easier for startups to sell to the government, can expedite the transition of early-stage research into products. The result should be a rapid acceleration in developing relevant military capabilities, putting science to use for the good of the warfighter and consumer alike.
The day before this year’s planned opening of South by Southwest, Austin’s annual international art and music festival, the Air Force remotely hosted a pitch competition in conjunction with the event, showcasing the potentially relevant commercial solutions the Air Force has identified in partnership with the venture capital community. While the details of the pitches aren’t public, we assume the companies were largely focused on the commercial market, as in past examples of AFWERX projects. Five years ago, this would have been big news, but today, it is what we have come to expect, as the Department of Defense continues and expands its efforts to reach out to the commercial marketplace for the next generation of advanced technologies.
Earlier this year, the Army hosted its own pitch competition, led by the Army Applications Lab in partnership with the Army Rapid Capabilities and Critical Technologies Office. Both organizations are part of the Army Futures Command, which selected Austin as its headquarters in an effort to embed itself in the high-tech entrepreneurial and research culture of the city. And then there’s the Army’s xTechSearch Program, which over the past two years has managed several prize competitions in search of state-of-the-art technology solutions to Army challenges. One example is a high-power, lightweight electric motor made by Merciless Motors, which won the company a position as an xTechSearch finalist.
The Pentagon’s ‘Shark Tank’ Moment
While there are mixed opinions about the value of pitch competitions, universities and the private investment community have long used them to identify and support potential new business ventures quickly, and then to scale them up to larger capacity businesses. With shows like Shark Tank on TV, these competitions are now well known to the general population. And they’re becoming commonplace within the national security marketplace as well. Today, the Pentagon’s budget accounts for less and less of global research and development, while venture capital investment in United States-based companies has increased to over 10,000 times what it was a few decades ago. Because other sources of R&D are increasing faster than the Pentagon’s R&D budget, the Defense Department is increasingly looking to the private sector to develop and supply defense-relevant technologies.
This is not new. In 1999, the Central Intelligence Agency established In-Q-Tel, a not-for-profit that invests in commercial technology relevant to national security, to ensure access to innovative technologies from the startup community. The original plan was for each of the military services to follow suit, beginning with the Army, which established the Army Venture Capital Initiative in 2002. Both of these initiatives are unique in not only engaging the investment community but also leveraging government funding to obtain equity in these companies.
Following a different model, the Defense Venture Catalyst Initiative tapped into the private investment community to find potential field-ready technologies. Private investors would provide commercial market insights to the Pentagon, which could rapidly identify potential emerging technologies to put into the hands of soldiers. Similarly, the Defense Innovation Unit Experimental initially focused on scouting technologies from Silicon Valley, before shifting to simplifying the acquisition process, incorporating pitch competitions with rapid, alternative contracting methods.
From Awareness to Access
The inclusion of contracting methods is an important change from many of the Pentagon’s earlier approaches to pitch competitions, which attracted interest but stopped short of providing a means for prospective government customers to access the technologies being pitched. In defense acquisition, this requires both a contract, or alternative acquisition vehicle (such as “Other Transaction Agreements”), and funding. The Pentagon seems to be learning that “tech tourism” (i.e., simply parading innovators in front of government officials) does not give operators access to the most advanced capabilities, and distracts startups from where their focus should be – developing their product.
Officials also appear to be moving innovation from the edge of formal acquisition processes into the center. Each of the military service acquisition chiefs comes from a background leading one of these “edge” acquisition organizations. For example, Dr. Bruce Jette, the head of Army acquisition, served as the founding director of the Army Rapid Equipping Force, established in 2002 to rapidly deliver off-the-shelf technology to the battlefield. And while each service is taking a different approach to fulfilling its responsibilities, they are all taking steps towards making mainstream what used to only exist outside of formal processes.
Case in point: the Army’s Extended Range Cannon Artillery system, the latest version of the howitzer, a longstanding core Army platform. The cannon is scheduled to be fielded in 2024 with an autoloader system, which is expected to more than double the rate of fire by replacing the practice of hand-loading individual rounds into the cannon. The Army’s Acquisition office is pursuing a traditional path for the autoloader, requiring it be incorporated as a part of the overall cannon artillery system. This limits the Army to working with the prime contractor to agree on a path to field the autoloader, since the prime is the sole conduit for anything built into the artillery system. However, the Army Futures Command has also engaged the Army Applications Lab as an alternative pathway, seeking solutions external to the artillery system. This approach moves beyond the confines of the prime contract, giving the Army the freedom to work with a broad range of new companies with alternative ideas and approaches. The Lab starts with exploring the problem and framing it in a way that makes it the most open to new solutions. As such, the Lab established the Field Artillery Autonomous Resupply initiative, specifically targeting companies who have not done business with the Army before. In January 2020, they announced the selection of a cohort of six such companies, who over a 12-week period designed 14 new approaches to improve the Extended Range Cannon Artillery’s autoloader.
The Less Glamorous Side of Innovation
The Army is not alone in shifting its focus to accessing commercial technologies. For another example of how the Department of Defense is forging contracting pathways for startups, we return to the Air Force pitch competition. The pitch competition is led by prominent private sector entrepreneurial organizations such as the TechStars and Starburst accelerators, along with AFWERX, the Air Force’s office dedicated to accessing new sources for future capabilities. Through this process, the Air Force has awarded dozens of small contracts to companies in record times. The AFWERX process has three phases, the second phase being a pitch competition. For companies to walk away from the pitch with a signed contract, the Air Force takes an unconventional approach. As the AFWERX acquisition team explained at the 2019 AcquisitionX symposium on alternative acquisition approaches, the Air Force pulls together all of the people needed to write and award contracts and agreements —contracting and agreements officers, contract specialists, and lawyers. They spend several days sequestered from their normal workload to prepare draft contracts for all of the companies that will be pitching technologies. This unglamorous look behind the scenes is important to highlight what it takes to achieve the flashy headlines about becoming more rapid, agile, and innovative.
A Role for Scientific Research
In a 2015 report, the Defense Business Board found that the most innovative companies not only make extensive use of venture funds and startups, but also leverage cutting-edge research from universities. Indeed, the scientific and technological discoveries coming from academia are important raw materials for developing future capabilities, as most U.S. companies have nearly completely abandoned in-house basic research, focusing their efforts on the development side of the spectrum and leaving the research to others.
Just as the commercial technology sector uses pitch competitions to test and forge new business ventures, the university-based research community has a corollary for vetting new ideas with a highly focused audience of experts: the research symposium. The symposium is typically the culmination of a multi-phase process, including the announcement of research topics, technical reviews, and in-person presentation of these research results to an audience of subject-matter experts. Academic symposia also serve as a developmental stage for junior researchers, where doctoral candidates can propose nascent dissertation topics for further refinement.
In the Department of Defense, there are also several examples of research symposia. The Military Sensing Symposium conducts four in-person meetings per year, where researchers present discussion papers that have already undergone technical peer reviews by the critical eye of the nation’s top subject-matter experts. While these meetings are typically classified, the Joint Enhanced Munitions Technology Program conducts its semi-annual reviews at the unclassified level. Here the presenter is positioned in front of a panel of experienced experts, with an audience of equally astute and accomplished PhDs sitting behind them. The panel and the audience dissect, critique, and discuss the technical details of each presentation, rattling off complex formulas for explosives and citing obscure research papers in a dizzying demonstration of the human intellect’s power. This process provides guidance on where to focus future research. To someone looking from outside this technical community, this could appear much like a “Shark Tank” pitch.
Despite the parallels between the pitch competition and the research symposium, it is important to also note that each has its own challenges and shortcomings. Pitch competitions are typically attended by financial, business, and market experts who understand what it takes to successfully run a business in a particular market segment. Absent from the room are scientific and technical experts. To be sure, there is some level of technical validation, generally covered by the fact that investors are typically not looking for unproven technology but for new applications to technology that has already been validated elsewhere — that is, they tend to invest in market risk, not technical risk. But even where a technical review is warranted, this is typically rudimentary analysis of the feasibility of what is being proposed during the pitch, not an assessment of whether the most suitable, up-to-date science has been applied to the problem set. With technology advancing so quickly in today’s global marketplace, this creates a blind spot.
On the other hand, research symposia typically focus on the science without considering potential applications. While this is an important and intentional characteristic of basic research, even the National Science Foundation has acknowledged the need to improve transition of basic research to applications — its Innovation Corps initiative focuses specifically on achieving this. Though we do not want to constrain science by what we know, there can be some value in accelerating the pathway from discovery to application. Scientists should take into account market conditions while developing proposals for new research. They can accomplish this by engaging with users and stakeholders, conducting patent searches, and meeting with potential investors or even users, in addition to the academic literature search that traditionally occurs at the initiation of new work. The result would be a “most valuable research question,” which aims to focus research on informing the eventual development of a “minimum viable product” — an early version of a product with just enough features to obtain customer feedback. The minimum viable product is a central feature of the lean startup methodology used by the startup community.
Work Together, Not in Sequence
Herein lies an opportunity that could benefit both the research community and the high-tech market. Rather than working in sequence, as they have in the past, researchers, inventors, technologists, and entrepreneurs should work together. The speed and interconnectedness of the global technology ecosystem require increased collaboration across a diverse, interdisciplinary team. The democratization of science has created common ground, such that even the most technical research can be made comprehensible if not fully accessible to those who stand ready to benefit from its results.
In summary, the work of the Department of Defense over the past few years has taught us several lessons. First, the awareness of advanced technology alone is insufficient, and must be combined with access in order to be effective. This means government officials need to obtain funding and access to contract or alternative acquisition mechanisms (such as Other Transaction Agreements) before scouting new technologies. Second, the Defense Department should shift its focus from innovating at the edge to bringing recent changes into the mainstream, for example by applying them to major defense acquisition programs (its primary mechanism of acquiring core systems). Third, innovation in government requires the unglamorous work of changing or navigating bureaucratic processes. Commercial market participants simply will not accept the tedium of typical government bureaucracies. And lastly, in addition to tapping into venture capitalists and startups, government initiatives need to do more to engage the research community. Researchers can help venture capitalists and startups identify and apply the most suitable cutting-edge science, rather than merely assessing whether the proposed approach is technically feasible. Especially in defense labs, the research is initiated with an operational problem in mind, so it is already primed to make an impact. The venture capitalist and startup entrepreneurial communities, with a focus on product-market fit, can help turn early-stage research into usable products, shortening the overall timeline from scientific discovery to product development.
The Defense Department should work to apply these lessons, bringing together the research community and high-tech ecosystem to operationalize science. This approach will accelerate the development of scalable capabilities for the dual-use military and commercial market.
Christopher Zember is a Senior Fellow at the U.S. Army Research Laboratory, focused on designing innovation and outreach models to ensure access to advanced technologies. He has served as a government senior executive and spent the past three years as a corporate executive at a 4,000-person science and technology company.
Peter Khooshabeh, PhD, is the regional lead for the West Coast U.S. Army Combat Capabilities Development Command’s Army Research Laboratory. The focus of the lab’s regional campuses across the country is to cultivate a collaborative science and technology network, including both non-traditional startups and universities, to provide fundamental knowledge for the future warfighter.
Image: Master Sgt. Barry Loo