Tech and talent are the keys to defense modernization

The world we know today would not exist without the close ties that bound the Defense Department, academia, and industry throughout the Cold War. The Internet and GPS grew out of those public-private partnerships and became part of the foundation for U.S. leadership in the global economy.

Now the same kinds of partnerships can again help make the Defense Department more innovative and effective — and Americans safer. Military leaders recognize the imperative of forming these partnerships, but clearing away the bureaucratic roadblocks is far easier said than done.

The Pentagon established the Defense Innovation Board, which I have the honor of chairing, to help the department build its relationships outside of government and beyond the existing defense industry. Our role is to conduct independent research and interviews, and then offer recommendations for change to Secretary of Defense Lloyd Austin and other senior leaders. In many cases, the capabilities that the department needs already exist. The difficulty lies in adopting and scaling them.

One area the board has been focusing on is changing the way the department treats data. In the private sector, data is an asset — a resource that can help an organization improve over time. In the military, however, good data is too often out of reach. Sometimes it’s not collected. Other times, it’s not digitized, just a pile of paper locked away in a cabinet. Sometimes the fastest way to retrieve and share it is to move it onto a disc and send it by snail mail. And even when that happens, data is only as good as the analytical tools that can unlock its promise, which the department often lacks.

In addition to those obsolete systems, contracts with companies too often limit the department’s access to the data they produce together. Outdated contracting practices resulted in the department losing control of intellectual property it should have retained. Ensuring more efficient, cost-effective operations can start with retaining more of that intellectual property in the first place. The challenge is to do it while also changing the way the department does business more broadly — and speeding up a traditionally show, clunky acquisition process.

The Pentagon, for example, is committed to buying the available commercial technology from the small firms or startups that make it, when it’s the right fit. The department’s Replicator initiative aims to deploy thousands of drones in 18 to 24 months instead of the typical five years. That’s a promising development, but a one-off project, no matter how successful, will not be enough to reform acquisitions department-wide. It also won’t be enough if the military continues to pour money into antiquated legacy systems.

The Pentagon will need to do more of what the Army did with its decades-old Raven and Shadow drone programs: cancel them. Changing tack and supporting more effective models takes on an even greater urgency now, as evidence piles up in Ukraine about the deficiencies of some drones made by U.S. startups.

There are many areas where acquisitions of high-tech weapons and other systems can be made both faster and less costly, including the purchasing of parts for large machinery. But, right now, the department lacks the ability to bypass the big prime contractors and turn to other vendors for support or competing bids. That drives up costs for taxpayers. The cost of the F-35, for example, has skyrocketed to over $2 trillion, even as it fails to meet the department’s goals for its capabilities.

Businesses should be fairly compensated for their products and services, but as it stands, the shareholders of the big prime contractors are getting rich while national security and taxpayers suffer. The public should not stand for this. If the prime contractors won’t at least work with the department to open the door to greater competition — which is both the ethical and patriotic thing to do — then Congress should pass a law forcing them to do it.

New tech is just one side of the defense innovation coin, though. Together, industry and the department must also develop the single most important asset either of them can have. The key to innovation isn’t hardware or software — it’s talented people. Whether in business or the military, smart thinkers need to be empowered to take risks when they see good opportunities. They also need to interact as closely and as often as possible, so that the sparks can fly.

The Marine Innovation Unit underscores the power of that kind of collaboration. It’s a reserve force staffed by people with experience in fields ranging from artificial intelligence and data analytics to business management and venture capital. They’re problem-solvers with private-sector experience and connections based not far from New York City.

In ordering the creation of the Marine Innovation Unit, Navy Secretary Carlos Del Toro sought to help the Marine Corps acquire new tech more quickly. In one instance, the unit helped the force study the available commercial options and buy new boats in under 12 months, a process that can typically take up to five years. In light of the unit’s early success, the military can look to replicate it near more tech hotbeds across the country, from Silicon Valley to the North Carolina research triangle, and from Austin to Boston.

The Defense Department is signaling its demand for a new era of innovation. There is a wealth of private-sector talent and capital eager to meet that demand. Both sides should seek opportunities to bridge the two — and foster the tech and talent that, as the Cold War showed, can defeat adversaries while also delivering enormous economic benefits to the American people.

Michael R. Bloomberg is the founder of Bloomberg LP and Bloomberg Philanthropies and the chair of the Pentagon’s Defense Innovation Board. He served as mayor of New York City from 2002 to 2013. The views in this column are his own.