Government action on tech innovation is good news for startups – TechCrunch

The TechCrunch Global Affairs Project examines the increasingly intertwined relationship between the tech sector and global politics.

Much has been written in this space about the Department of Defense’s efforts to harness innovation from Silicon Valley, and the steep hills that tech companies have to climb to finally win Department of Defense contracts and cross the “Valley of Death.” “. The good news is that the US government has heard Silicon Valley’s pleas to cut red tape and encourage new ways of doing business, and is taking action.

The critical 4Cs

Over the past year, a strong bipartisan alignment has emerged between the executive and legislative branches around a set of actions aimed at closing gaps and removing barriers to success, better known as the “critical 4Cs”: Culture, Recruitment, Congress budget cycles and champions.

Let’s start with Champions. The American people are fortunate to have two of Silicon Valley’s greatest champions: Deputy Secretary Kathleen Hicks and Deputy Secretary for Research and Engineering (R&E) and (CTO) Heidi Shyu. They, along with other champions at the Pentagon, fully understand the challenge and have taken concrete steps from the top down to prepare the DOD system for innovation.

For example, Hicks and his former software czar led a major effort in 2021 to implement the DOD’s Software Modernization Strategy, which aims to better organize internal Pentagon processes to adopt new software technologies company-wide. The strategy also produces, in effect, the “demand signal” for the formal policy to expand Silicon Valley technology throughout the Department of Defense.

Hicks has also visibly empowered the CTO, his management group, and the Innovation Steering Group to map the Pentagon’s innovation efforts, examine its alignment and acquisition practices, and engage honestly with the industry’s smaller technology stakeholders, and incorporate your views, as you go. The DOD has also established new programs to recruit and grow tech talent and thereby attract and retain a larger pool of defense tech champions. This gets to another key “4C”: building a technology-savvy and technology-driven culture within DOD.

Under Shyu, a seasoned senior procurement and acquisitions executive who has degrees in mathematics and engineering, the Pentagon has been launching a series of efforts to help it “go faster.” As Chief of Research and Engineering, Shyu helps coordinate the hundreds of offices and innovation efforts throughout the Department of Defense. He has been taking concrete steps to strengthen the position of small technology innovators and lower the barriers to working with the DOD.

Among them is a Technology Vision released in February, which prioritizes key Pentagon focus areas such as trusted AI, space, advanced computing and software. Deputy Secretary Shyu also asked Congress for authority to help small innovators through an expanded Small Business Innovation and Research (SBIR) grant process to mature experimental programs and increase the odds that they will become record-breaking programs. This is one of many ongoing efforts aimed at alleviating systemic “C hiring” barriers for promising programs.

In the last “C” Congressional budget, the Biden administration proposed in its FY2023 budget a 9.5% increase over the FY22 funding level for Department of Defense Research, Development, Technology, and Engineering . If adopted by Congress, it would represent a significant effort to advance modernization and technology adoption, building on measures passed by Congress in the FY22 National Defense Authorization Act (NDAA) and the FY22 budget. 22.

The FY22 legislation specifically authorized and funded DOD plans to reduce barriers to technology adoption and provided additional funding for software programs and SBIR. For example, FY22 NDAA Section 833 directed the DOD to develop a pilot program to implement unique procurement mechanisms for emerging technologies. Meanwhile, Section 834 mandated accelerated acquisition and deployment of advanced technology, both intended to address the speed and reduce the pain of Procurement “C” as funding levels were anticipated to increase in FY23.

Members of Congress and staff continue to hear from Silicon Valley startups about planned underfunding at the end of SBIR funding cycles, but the challenge for Congress, they say, is to balance the rapid success of innovation with the oversight and accountability for such taxpayer funding. They don’t write blank checks. That is why Deputy Secretary Shyu’s request to Congress to expand the SBIR cycle is important.

unintended consequences

As Congress and the Pentagon continue to address “4C” challenges, they must avoid creating new ones. For example, when broader spending and authorizations for software and new technology were passed, Congress created new reporting requirements to account for how the money was used, in some cases discouraging innovation. As one DOD program executive put it: “I now need to provide quarterly quantitative and qualitative progress reports to include comparisons of similar programs. thanks but i’ll stay [traditional programs] and focus on delivering products instead of reports.” New reporting loads can overshadow intent and create cultural antibodies to doing new things among highly respected but overworked show executives. There has to be a balance between “supervision” and “free for all”. Look at this space.

gaps remain

A recent report by consulting firm Miter outlined why simply pouring more money and expanding freedom into the SBIR grant process is an incomplete solution to the problem of rapid technology adoption. In a nutshell, all defense procurement is based on the formal requirements process, the Pentagon’s long process that articulates what the military needs and why, and its related acquisition and budget processes that establish how much it can buy, how, and when. If a particular new technology is not in that requirements and budget process, it would be difficult for the Pentagon to fund and adopt it.

Current processes often pit program executives and hiring officers against innovation teams and end users who want advanced technology now, a dynamic that makes it easier to maintain the status quo. To make technology adoption a reality, these formal processes need review to keep progress moving in the right direction. It is one thing to develop or test new technology, it is quite another to consider it a strict requirement and include it in the formal purchase cycle to scale it up in the world’s largest and most complex fighting force and its networks.

Authorization to Operate (ATO) presents a significant hurdle for both start-ups and end users. If one company’s software or hardware is considered secure on one Army network, why isn’t it on another? Companies often must go through separate approval processes for each Pentagon office, branch, or agency. This could be simplified without making technology adoption itself a security vulnerability, even leveraging cloud resources more effectively. Clearly, more work is needed to address the ATO challenges if new technology is to scale at the speeds and levels desired by Pentagon leadership.

The US government clearly recognizes the significant national security and financial imperatives to rapidly adopt Silicon Valley’s most innovative and applicable commercial/dual-use solutions. But as the adage goes, “Rome wasn’t built in a day” and continued efforts will be needed to close the gaps and mitigate unintended consequences. New companies must continue to actively engage with the Pentagon and Congress to communicate specific examples of their “pain points” and offer constructive insights, while at the same time adjusting to a very different hiring, compliance, and business culture than the Valley. By working together toward success, the Pentagon and Silicon Valley are truly capable of anything, including defending the free world against the worst existential threats.

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