Defense Innovation Is Falling Short

 In Industry, Acquisition, & Innovation, Defense

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

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