Compared to the big numbers Washington and Palo Alto are used to, the first contracts from the Defense Department’s Silicon Valley outreach are likely to be underwhelming. Facebook paid $19 billion for WhatsApp in 2014; last year, the Pentagon spent $9.1 billion on the F-35 Joint Strike Fighter. By contrast, expect initial spending on DoD-tech sector partnerships to be in the tens of millions.
Yet defining success for the Defense Innovation Unit – Experimental (DIUx) by simple dollar amounts is a mistake. This mindset shortchanges the disruptive potential of small-but-critical connections and undercuts the highest-yield Pentagon outreach to America’s tech leaders since the Cold War. The imperative is to develop or harness game-changing commercial technologies and processes to give Russia or China second thoughts about picking fights with the U.S. In doing so, innovative companies and entrepreneurial individuals will be woven into the national security tapestry, giving a new look to America’s 21st-century defense industrial base (DIB) — a DIB 2.0.
The clock is ticking as DIUx approaches its one-year anniversary in August. The presidential election will certainly result in rigorous reviews of defense programs. Defining success for the Pentagon’s outreach to Silicon Valley is crucial if the effort is to survive into a new administration and evolve from an “X” experiment to a fixture of DIB 2.0.
DIUx should be judged a success based on how well it performs three broad tasks: formulate, facilitate, and champion.
First, formulate best practices (with industry input) for licensing commercial technologies to be used for national security purposes. Tech companies fear that International Traffic in Arms Regulations (ITAR) rules will restrict sales of their most promising products if they turn some or all of it over to the Pentagon for use by the American military and intelligence community. DIUx can champion Defense Department use of commercial off-the-shelf and dual-use technologies in a manner consistent with their market potential and design, such as spiral development and “fast fail” approaches. Trickier might be advocating for policies around encryption and privacy, for example that support a vibrant and resilient technology marketplace while remaining true to DoD’s larger mission.
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Next, facilitate relationships with big firms as well as start-ups, particularly for internal innovation partnerships. Small businesses and startups hold a portion of the tech sector’s intellectual capital. DoD must not ignore large commercial technology companies, many of whom are already on federal government contract vehicles that may facilitate procurement in novel ways. The Pentagon also needs a mechanism for engaging with the internal technologies of big tech firms, such as artificial intelligence at Facebook. Becoming a trusted partner for big companies with myriad constituents is a major cultural if not legal challenge but, if accomplished, will be a real sign of success. One sensible approach is to offer top Defense Department performers to such companies as temporary staff who bring their own distinct approaches, rather than making the talent draw a one-way street.
And lastly, champion the use of commercial off-the-shelf hardware and the adoption of innovative commercial processes within DoD. This places great importance on outreach – and showing results quickly. According to a six-month update, DIUx officials have met with more than 500 “Silicon Valley entrepreneurs, venture capitalists, corporate leaders and leading edge academic researchers, as well as organizing a number of DIUx signature outreach, engagement and educational events.” Five pilot projects are underway, according to DIUx, with another 17 in the works. The balance between solving defense problems might threaten companies’ core businesses because of exportability and privacy concerns. DIUx offer invaluable counsel helping DoD understand key issues that Silicon Valley faces when working with U.S. military and intelligence customers. As well, DIUx can identify commercial approaches with real operational benefits, such as design-thinking driven product engineering and more efficient software development.
These first DIUx-driven contracts will connect the Pentagon’s cutting-edge needs to an entirely different commercial, cultural and intellectual ecosystem that is shaping future technology in a way the defense sector once did. Success must be measured in many ways, just not in dollars alone.