ASPEN Security: Does Defense Need More Funding For Innovation?

The Aspen Institute holds a roundtable on defense innovation suggests that the relationship between Silicon Valley and the Defense Department is not as successful as it once was.

The Aspen Institute, at the end of three days of talks with leaders from around the world, held a roundtable discussion on the relationship between Silicon Valley and the Department of Defense. The speakers included Mike Brown, Director of the Defense Innovation Unit; Kathy Hicks, the Kissinger Chair of the Director of the International Security Studies program; Eric Chewning, previously the Chief of Staff’s Secretary of Defense and currently a partner at Mckinsey and Co; and Ryan Tseng, CEO and Co-founder of Shield Al. Anja Manuel of the Aspen Institute moderated the panel.

The panelists all agreed; the relationship between Silicon Valley and the Defense Department is not as successful as it once was.  “[All of the first semiconductor companies] were built with lots of support from the Pentagon,” Manuel said, to the nods of the panelists, “much less of that is happening now.”

“One of our biggest challenges is that many Americans have become comfortable assuming that the hundreds of thousands of millions of dollars that they’re spending on defense is being spent well and productively and I think [you’re] hearing a resounding chorus, that’s unfortunately, probably not the case,” said Kathy Hicks. “And on the innovation side, I think that’s where we see a lot of these challenges.”

Discretionary funding and an incentive to innovate

Tech companies need an incentive to invest time and funding into defense projects, argued the panelists. The main factor which disincentives defense innovation is the slowness of the Congressional Budgetary Office. “We’re not moving in government at an agile pace that reflects the nature of the competition, it’s about speed. So when we think about when we have successful prototypes that we’ve done, it’s difficult for the budgeting process to catch up and the services to catch up,” Brown explained. Brown continued, explaining that budgeting for government projects is often a two year process: “one year to work in the Pentagon, one year to work it with Congress.” This slows innovation, without the promise of a payoff, tech companies will not invest in defense projects.

“Why does innovation happen in the private sector?” asked Eric Chewning. “At the end of the day, the following needs to be true: companies, and investors need to believe that if they take risks, they work hard to get ahead, there will be a return.” To incentivize innovation, the panelists agreed there should be more discretionary funding earmarked for this purpose; the promise of a payoff. The Trump Administration has pushed for this funding, including a major investment in research and development in the fiscal year 2021 budget.

Hicks, described a ‘valley of death,’ which kills potential defense tech projects. The ‘valley of death’ is “the risk that [tech companies] are taking [when] they’re doing this early work, but the big payoff for them and the reason that they’re investing in the innovation is that they’re going to get a contract for curing actual capabilities, buying capabilities.”

Chewning, however, observed a “bipartisan consensus on the need to modernize the military in line with the national defense strategy,” now, he believes all that is needed to begin to address this lapse in innovation is “political will.”

Tech CEOs and Congress

The panelists, from tech and Defense alike, agreed there is an adversarial relationship between industry and government. “I think all too often you get into this adversarial relationship where it’s industry versus the government,” Brown described, “and this is not helpful… I think you need to look at it as a partnership, you need to look at it as everyone’s got their ‘Team America’ hat on, what can we do on behalf of the warfighter and for the country, and that type of freer exchange allows for the type of [risk taking].”

To achieve a non-adversarial relationship between tech and Defense, and to create the political will for reform, the panelists believe government should encourage more fluidity between leadership of the two groups. If government rewarded people with experience in technology and other industries in the hiring process, cooperation would be more successful, they agreed.

“We got to get back to the era that created the internet and the sense of government,” said Brown, “business, academia working together and making investments that are in these game changing technologies that have the spillover effects, because that’s what happened with the internet.”

 


 

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Silicon Valley innovation Mike Brown Kathy Hicks Eric Chewning Ryan Tseng Anja Manuel Aspen Security 2020 DoD

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