US defense innovation has traditionally been driven by a defined network of large defense contractors. However, over the past 20+ years, technology startups financed by venture capitalists have produced advanced technology at a rate far outpacing that of the US Government and defense industrial base. Considering this shift in the distribution of technology production, the Department of Defense’s (DoD) priorities have shifted. It now places a premium on cooperating with groups of people in applied academic settings and the venture/start-up community.
In this Capstone Workshop, the team probed the state of DoD’s engagement with these unconventional sources of human capital, detailing its findings from a landscape assessment of DoD engagement with startups and venture capitalists and offering potential solutions to overcome barriers impeding deeper engagement between these groups. The team conducted interviews with stakeholder groups - DoD innovation officials, entrepreneurs/startups, and venture capitalists - and distributed a survey questionnaire to supplement anecdotal evidence with quantitative data.
The team found that cumbersome bureaucracy, acquisition rigidity, and defense industrial base market dominance disincentivize startup engagement with DoD. Furthermore, DoD and private sector motivations are often misaligned. DoD is focused on developing solutions for warfighters, while startups and venture capitalists are concerned with commercial viability. Despite these obstacles, DoD can deepen its collaboration with startups and venture capitalists. The team recommended that DoD scale the use of unorthodox acquisition mechanisms, cutting- edge software platforms that optimize startup research and outreach, and bold programs to bring together DoD and industry on local and national levels.