Pentagon’s bridge to tech’s private sector

In the four years that he led the Defense Innovation Unit, tasked with bringing the fruits of commercial tech world to the U.S. military, Michael Brown says he added more than 100 new vendors to the Pentagon roster.

Yes, but: Brown tells Axios that the Pentagon needs to make more structural changes in how it buys equipment if it really wants to take advantage of commercial technology.

Why it matters: Brown is exiting the Pentagon when his term ends in September, and the agency is actively seeking a replacement, marking a key crossroads for the unit and its efforts.

Catch up quick: The Defense Innovation Unit (DIU) was created in 2015 by then Defense Secretary Ash Carter with the goal of opening up the Pentagon technology acquisition process — particularly to smaller firms discouraged by the cordon of rules and red tape selling to the military has traditionally required.

The big picture: The Defense Department was once at the leading edge of developing key new technologies, including the internet itself, but today most innovation is happening outside its direct sphere of influence. That’s why the Pentagon aims to forge new bridges to the private sector.

• By the end of the decade, Brown says there will be 1000 commercial satellites for every one owned by the government. And today, he notes, the U.S. military accounts for less than one percent of semiconductor consumption.
• Private companies have also led the development of other new technologies that the military has their eye on, including drones and AI
• “If we’re not taking advantage of that in the military, my goodness, our adversaries are going to be taking advantage of that commercial technology, because unfortunately that’s available to everyone,” Brown said.

Between the lines: Brown says he kept running into the same challenge: the military’s process for buying equipment. “We’re still in a large sense buying things the same way we did 50 or 60 years ago,” he said.

• It takes three years of planning to spend $1, he found. Money that is going to be spent in 2024 has to be planned for this year. “That might work well for an F-35,” Brown said, noting it doesn’t change from year to year. “But for the technologies we’re talking about — the commercial world — that’s nonsensical.”
• The Pentagon typically crafts a specific set of requirements, rather than asking for the best drone or AI algorithm available at the time it’s buying, Brown says.

The budget for the military is also too rigid, he said. Money can’t be moved around as needed, the way it could when he was running tech companies in Silicon Valley, most recently Symantec.

• “In the private sector, it’s all green,” Brown said. “In the DoD, money isn’t always money. There are restrictions referred to as ‘colors ‘of money — you are limited to how things are moved around.”

Brown heaps praise on the Pentagon’s “fantastic” people, both military and civilian, but he adds, “The constraints we put them under are unforgivable.”

Be smart: Tech companies’ willingness to do business with the military is not always a given, though Brown says that has become less of an issue.

Today’s startups, he says, are often happy to diversify their businesses, while large companies have become less reluctant to take on Pentagon work.

• There’s also growing awareness in the U.S. about the need for a supply chain focused on domestic production and allied nations, rather than sourcing from all over the globe, particularly China.
• “The military does a lot more than blow things up,” he said. “There’s a wide variety of missions the military does. We owe it to the folks in the military to give them the best tools.”

What’s next: Brown said he’d like to see the Pentagon take the approaches and thinking pioneered inside the DIU and extend them throughout the military — or as he puts it, taking the two-lane road his team built and turning it into a superhighway.

• In such a world, you might not even need the Defense Innovation Unit. Don’t expect that any time soon, though. Brown says: “I don’t think I’d be worried about the next director’s job security. We’re not close to that right now.”