“Software is eating the world,” according to venture capitalist Marc Andreessen. It also is fueling a new genre of weapon systems, systems that have evolved to include untraceable crypto currencies, computer network malware, offensive social media information operations (i.e., Russian social media hacks), and the democratization of technologies that are now available to anyone who has the money. For example, ISIS reportedly is buying drones from Alibaba, a platform launched in 1999 to facilitate global wholesale trade.
At the same time, constraints imposed by the defense acquisition process and the entrenched military-industrial complex prevent the U.S. government from accessing Silicon Valley and the best technology engine the world has ever known. A great example of this is the Department of Defense’s (DOD’s) inability to foresee the need to counter small unmanned aerial systems (UASs) being used by ISIS in Iraq and Syria. Offensively, DOD realized the tactical advantage of having a small UAS strike capability in 2006. Unfortunately, DOD failed to plan for the eventual use of these systems by its adversaries. It took until 2015 for DOD to field its first system to counter small UASs.
The U.S. government can overcome these obstacles and create a culture of innovation by adopting the following principles:
First, DOD technology advancement should rely partly on hand-selected personnel strategically placed in industry to scout and introduce emergent technologies to the government. This “deal flow” requires DOD to have access to and placement within top-tier private venture capital (VC) firms and tech companies. VC firms search out new technologies and then invest in the best in class. If not shown a quick path to potential profit, VC firms will recommend that their portfolio companies remain clear of government opportunities.
Second, the government must address its excessive sales cycle times and bureaucracy, which remain impediments to a worthwhile return on investment for VC-backed startups. DOD’s focus needs to align with those VC firms willing to develop strategic partnerships with the government. The same is true with respect to new companies advocating technology with potential military applications. The government should focus its efforts on new companies that are post-early-stage “seed” investments and begin with companies at a “Series A” funding stage. This is because most companies at the Series A stage have determined that their concept and model are sound in the broader market.
Third, the government needs to adapt and look more like the market from a customer or investor standpoint. If done correctly, pivots by new companies would not be violent or severe. Finally, the congressionally funded success story (i.e., In-Q-Tel, a nonprofit private/public venture capital fund) should provide a model for future government-backed venture capital funds.
Fourth, the government and DOD should develop a flatter point-to-point relationship with industry to spot and assess new technology. Commanders need the freedom to maneuver their acquisition professionals and contracting officers to be seen as legitimate partners in the technology ecosystem. Echelon two commanders could be given the freedom to buy early technology as “pilot customers” and leverage strategic partnerships with technology-focused law firms, academia, and financial institutions helping to spot and assess new-technology companies with innovative solutions as they enter the market.
Fifth, to accomplish the fourth goal, intellectual property policies for new-technology companies working with the government/DOD need to be fixed. The challenge is that in most instances one company’s intellectual property (IP) will be combined with others to develop a product for the warfighter. Generally, a traditional defense contractor would be tasked with doing this integration work. DOD requests prospective partner tech companies to slow their iterative processes and give proprietary tech (or at least make it available) to defense contractors acting as prime vendors. Unfortunately, these companies generally are viewed as the least trustworthy within industry, and IP protections are parts of any company’s value.
Given the secrecy involved in most weapons and defense programs it would be difficult to assert IP claims because many programs remain hidden for long periods of time, thus destroying the very protections intellectual property law was created to provide. The government can overcome some of these obstacles and streamline innovation efforts by putting IP policies in place, sooner rather than later, that will ensure tech companies’ IP will be protected.
Sixth, in addition to new IP protection policies, it is important for the government to build stronger relationships with other power nodes in the technology ecosystem (e.g., VC, angel, academic, legal). These newly established relationships within the innovation engine could allow the government to spot and assess new technologies early, filter substandard technology, and invest in new technology for use in military applications. The commercial world has no use for large military platforms like aircraft carriers and tanks, but the software that runs the next generation of military platforms is the same software tech companies will be using to run their drone fleets and driverless cars. This next-technology offset will happen outside the entrenched military-industrial complex.
Finally, imagine a future in which our military force will possess the ability to pacify ISIS-held Raqqa in a day. U.S technology can enable the creation of an elongated physical battlefield presence using swarms of miniature unmanned armed and nonlethal aerial systems. In that future, the software built to protect industrial infrastructure is able to detect, deter, and defeat hacking attacks that near-peer adversarial aggressors such as Russia and China throw at us.
To accomplish this exponential (10X) change, DOD recently executed a new strategy to improve its emergent technology acquisition process. The speed, capital, and assumption of risk required can be realized only through a paradigm shift in the mind-set of leadership at the civilian SES and flag officer levels within DOD. Individuals must be retrained on rapid acquisitions processes and given the capital to buy new tech early, allowing the warfighter to test and evaluate its potential uses.
This paradigm shift will allow specialized contracting officers to seek out and incentivize commercial marketplace technologists to look at DOD and the government as a large untapped revenue stream. With the re-creation of contracting officers who are well versed in “deal flow” and dedicated to expediting the acquisitions process, technologists will see a pathway for success in the government marketplace. Government innovation teams must develop “buy-in” to create a product-driven culture that defeats the risk averse culture currently at play. Changing the federal acquisitions rules and regulations is not enough. The Pentagon must create a strategic and well-planned cultural shift.
Commander Supko is a two-time technology startup founder. His most recent venture, Patriot List, is a safe and secure hyperlocal peer-to-peer market for members of the military, veterans, and their families. He has served as a Navy SEAL officer for 18 years, to include three combat tours in the Middle East, and currently is the commanding officer for West Coast Navy Reserve SEALS at SEAL Team 17.
Editor's Note: Part I: Industry vs Government Tech Innovation — Winter Is Coming! was published 20 January 2018, on Proceedings Today.