Fostering Innovation in Military Technology: Strengthening DoD’s Commercial Technology Pipeline | RAND

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Technological superiority is a key part of the U.S. military’s advantage over its competitors. During the Cold War, the U.S. government played a key role in sponsoring science and technology research. In recent years, however, technological innovation has been driven by the commercial market, where other nations — particularly China — have narrowed the advantage held by the United States.

Recognizing the need to harness innovation from the private sector, the U.S. Department of Defense (DoD) and the military services have created a number of defense innovation organizations (DIOs) to help foster communities of innovators and accelerate the military’s identification, development, and adoption of commercial, private sector–developed technology. But have these organizations been able to achieve their stated aims? A RAND National Security Research Division study examined how well DoD is identifying, developing, and transitioning innovative commercial technologies from the private sector to the military and how the defense ecosystem can more effectively support this process.

A Model of DoD’s Commercial Technology Pipeline

The study used a mixed-methods approach combining

To understand the process through which DoD currently accesses commercial technologies, researchers developed a model of the commercial technology pipeline (CTP) — that is, all the activities, functions, and processes required to move a technology from idea to fielding under the current set of DoD organizations and requirements, acquisition, and budgeting processes (see figure). The model is divided into three phases — identification, development, and adoption — which roughly correspond to the maturity of a technology as it moves through the pipeline. Each phase contains a set of core functions (activities that normally occur within that phase of the CTP) and enabling functions (such as policies and guidance, funding, coordination, and oversight), which occur within and across each phase.

Representation of the Commercial Technology Pipeline

The commercial and entrepreneur market is represented as a flow chart, with connections between the flow chart items. The order for the main pipeline pathway is:

There are on- and off-ramps to the market between the steps in this paths. Additionally feedback is given on step 1 during step 2, and on step 2 during step 3.

Finally, there are enabling functions that affect all three steps, which are:

The researchers used the model to characterize the current functioning of DoD‘s CTP, including the role of DIOs, and found the following:

The pipeline is broken because of incentive structures, a lack of unified DoD strategy, and mission [for innovation].

DoD interviewee

Characteristics of a Well-Functioning CTP

Gaps in DoD‘s Commercial Technology Pipeline

During their review of CTP activities, functions, and processes, researchers identified several characteristics of a well-functioning CTP, as shown in the box labeled “Characteristics of a Well-Functioning CTP.” The researchers used these characteristics to assess the functioning of DoD‘s CTP as it exists today. The characteristics of a well-functioning CTP are largely lacking in DoD‘s pipeline. The assessment found that DoD CTP stakeholders are not aligned to a shared mission or common goals, objectives, and outcomes. There is no DoD-wide strategy or policy guidance for innovation, and, other than broad statements of modernization priorities, no specific goals and objectives have been articulated for the CTP.

Roles and responsibilities are also unclear. DoD includes a large number of DIOs — some put the number as high as 100 — but few prospective partners in the government and new entrant businesses know that they exist or understand what they do. DIOs have disparate missions, and, while many view themselves as playing a role in the identification, development, and adoption of commercial technologies, they do not view themselves as part of an integrated system. Other key stakeholders in the traditional acquisition, requirements, budget, and end-user communities do not see themselves as part of the CTP at all, and DIOs lack consistent buy-in from these traditional communities.

Given that no single organization performs all the key functions required to effectively accelerate the identification, development, and adoption of technology for military use, links between DIOs are essential. However, there are no formal mechanisms or requirements for information-sharing, coordination, or collaboration across CTP stakeholders, and when such activities do occur, they are typically ad hoc and often based on personal relationships.

Incentive structures for CTP stakeholders are not aligned to CTP goals, objectives, and outcomes, and there are no DoD-wide metrics or accountability mechanisms. Where metrics and mechanisms do exist, they are focused mostly on outputs for a DIO — such as the number of solicitations posted, proposals received, and prototype projects initiated.

There are also significant gaps in core and enabling functions. For example, DIOs do not have a systematic means to identify commercial business partners, and most of those with whom we spoke lack an institutionalized approach to storing and sharing data. In addition, there is little communication with DoD end-users about capability needs and problems. Stakeholders from industry are often unable to identify and access DoD opportunities or understand how their technology might apply to DoD missions. Moreover, there are no warm handoffs, clear routing, or obvious next steps for businesses once they have come through a particular DIO‘s programs.

There is no senior leader in the executive branch who cares about what innovation organizations are doing, which leaves innovation organizations with only one customer left to impress: Congress. So you try, three to four times a year, to show Congress you’re doing something interesting. There is no incentive structure for innovation organizations to show how many of their claimed 12 “transformative” projects have transitioned to programs of record, how many are in the FYDP [Future Years Defense Program]. If the answer is none, what are we doing? Congress doesn’t have the time to do that deep dive, so no one is asking those hard questions.

DoD interviewee

Although DoD has funding available to support technology development, much of that funding is concentrated in the early stages of development, and there is limited support for testing and the proof-of-concept demonstrations that can help sustain a company. As a result, much technology languishes in the “valley of death” — that is, the technology has been demonstrated and is technically ready to be transitioned to production and fielding but does not make it to the adoption stage. This occurs for the following reasons:

[Most innovation organizations] have no real sense of what the actual capability requirements are because almost every innovation organization does not talk to PMs or PEOs. The upshot of this disconnect is that innovation organizations have lost the bubble on where decisions are being made.

DoD interviewee

Recommendations to Strengthen the CTP

CTP throughput and effectiveness can be enhanced by policy levers that cultivate desired CTP characteristics, encourage and incentivize coordination and collaboration, and strike balance among organizational independence, free-market style competition, and more-centralized direction of the CTP.

Researchers made the following recommendations to DoD to support these ends. These recommendations are designed to be interdependent, mutually supportive, and implemented as a package.

We built [the technology] . . . and when they went back into the Navy laboratory system and it became pretty clear [the technology wasn’t going] to come out of the laboratory system and . . . became “Hangar Queens,” not because of technical reasons but just because there was no transition mechanism.

Commercial sector interviewee

Cultivate Desired CTP Characteristics

Strengthen CTP Identification, Development, and Adoption Functions

DoD should carefully assess the costs, benefits, and unintended consequences of any potential change to the system. In addition, adopting innovative commercial technology for military use is not just a technical problem but also a cultural one. Innovative technology often requires adaptation — behavioral changes in how a problem is addressed. DoD should explore this aspect of technology adoption further to improve CTP outcomes.

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