Secretary of Defense Ashton Carter made headlines last month when he rebooted the Defense Innovation Unit Experimental (DIUx) office in Sunnyvale, CA. The new “DIUx 2.0,” as it is being called, features new leadership, a second office near Boston, and direct access to Secretary Carter himself. But will the upgraded office provide the innovation the Department of Defense seeks?

The conceit behind DIUx, and the Pentagon’s new Defense Innovation Advisory Board, headed by Google’s Eric Schmidt, is that exposure to the ideas and practices of Silicon Valley entrepreneurs will expose the U.S. military to new commercial technologies and provide the impetus to create new pathways to procure them. With a variety of military technologies having proliferated in recent years, defense officials and military leaders fear the U.S. military’s qualitative technological edge is eroding, and engaging with high-tech firms in the private sector is the only way to maintain its lead. DIUx, officials believe, will work to encourage better relations between the military and non-traditional defense supplies that will enable the type of symbiotic relationship the former has with the established defense industry.

In an essay  at War on the Rocks, Patrick Ryan, a vice Dataminr and co-founder of at least two startups that sold new technologies to the U.S. government, made a case for DIUx 2.0. Ryan writes,

The DIUx’s top priority should be defining clear pathways for innovative commercial technology firms to access the defense market. Creating these pathways won’t be easy and will require a careful combination of leveraging the portions of the acquisition system that do work, as well as leading the charge to fix the parts that are broken. Fortunately, there are groups both inside and outside the Pentagon, such as the Senate Armed Services Committee (SASC), who are already taking steps in the right direction. The DIUx should serve as a catalyst and champion for these ongoing reform efforts and also work to stitch together the various new and existing ‘innovation’ programs to form clearly defined pathways. These pathways will serve to better align incentives between buyer (the DOD) and seller (the thriving ecosystem of innovative U.S. firms). They will also outline how a startup that provides a valuable product or service to the Department of Defense can both capture meaningful revenue quickly and grow that revenue over time.

He identifies four obstacles to successful relations between Silicon Valley startups and the Department of Defense: 1) Pentagon risk-aversion regarding new technologies; 2) regulatory barriers for new firms trying to enter the defense market; 3) a “painfully slow” defense acquisition process; and 4) military preferences for customized designs which the government owns, rather than commercial products.

While these obstacles are real, it is unclear how DIUx or greater exposure to Silicon Valley entrepreneurs like Schmidt or Elon Musk solves them. Regulatory barriers to entry and “painfully slow” acquisition processes are products of politics. Political concerns about waste, fraud, and abuse are among the few issues that gain consensus among defense reformers in both parties, even if the efforts to control them often backfire and exacerbate dysfunction.

Military risk aversion to new technology, however, is largely overrated. Military organizations, even more than other large organizations given the nature of the military enterprise, look for ways to reduce uncertainty. One way they do so, as political scientist Barry Posen recently argued, is through the development of doctrine. When new technologies facilitate doctrine, they will be accepted readily. Risk-aversion occurs when it threatens doctrine.

Organizational culture is also an impediment to military innovation, but the ability to overcome it usually emerges from within. Three decades ago, Posen argued that intervention by civilian officials was necessary for military innovation due to organizational efforts to reduce uncertainty. Harvard political scientist Stephen Rosen, however, found that civilian intervention did not produce innovation because the military is a “closed system;”  therefore, innovation must come from entrepreneurial specialists within the military itself.

In a fascinating essay for Joint Forces Quarterly, James D. Hasik describes a number of the entrepreneurs emerging from the middle ranks of America’s armed forces.

Perhaps most prominent is the Defense Entrepreneurs Forum. Now in its third year, the forum benefits from combining external sponsorship (primarily by the U.S. Naval Institute and University of Chicago) with a selected membership of substantially junior- and middle-ranking officers. Their work so far features some compelling ideas. David Blair, an Air Force gunship and unmanned aerial vehicle (UAV) pilot fresh from a Ph.D. at Georgetown, wants to harness the big data of black boxes to continuously train better pilots. He calls the idea Moneyjet, but he also wants to keep the data from the micromanagement of higher headquarters. Mark Jacobsen, an Air Force transport pilot now at Stanford University, is building cargo UAVs for humanitarian relief inside air defense umbrellas. Matthew Hipple, a Navy helicopter pilot, is conceiving a force of networked decoy UAVs to “confuse, distract, and seduce” enemies. Think of it as a combination of the Ghost Army of World War II and the helicopter decoy tactics of the Falklands War—or maybe even “smart chaff.”

However, Hasik notes, these entrepreneurial ideas will go nowhere without institutional support. He concludes:

Command structures must become honest brokers for innovation. Senior leaders must choose the right pace of change and know when to kill off bad ideas. Thinking inside the box sometimes leads to more usable ideas. This must not be allowed to justify the protection of vested interests, but discipline is needed to foster what Scott D. Anthony, David Duncan, and Pontus Siren of the growth strategy firm Innosight call a minimum viable innovation system, defined as the “important intermediate option between ad hoc innovation and building an elaborate, large-scale innovation factory.” This can be aimed to produce what serial entrepreneurs sometimes call the minimum viable product, that combination of proverbial “pipe-cleaners and cardboard” for working out the concept that forms the starting point for functional prototyping and early fielding. Honestly vetting these ideas up the chain of command is not a natural process for most of the Armed Forces.


To make that happen, innovation needs incentives. Fostering entrepreneurship is not just about finding the smartest and most motivated entrepreneurs; it requires crafting the right rules of the game for those entrepreneurs to succeed. Leaders of the Armed Forces and the defense agencies, as well as those within the Office of the Secretary of Defense, ought to be asking themselves whether their organizations are rewarding, protecting, and promoting the 21st-century Williams Sims, Pete Quesadas, Hyman Rickovers, Brute Krulaks, Frank Aults, and John Boyds. Review boards need to care more about pushing envelopes than peccadillos. As long as leadership is not actively pushing out the innovators, the cause is not lost, for not every potential public entrepreneur “is going to want to make a fortune by age 30 in a social media startup.” If personnel systems can offer opportunities for those with the creative itch to exit, make that fortune, and then serve again, the cause is not lost. The Department of Defense and the defense industry that supports it must compete with the better opportunities to build personal wealth that are offered in the public entrepreneurial space, but they often do provide more compelling technical and operational challenges than those found in writing messaging apps.

Rosen similarly argued that, because military organizations are disciplined and hierarchical in nature, “power is won through influence over who is promoted to positions of senior command. Control over promotion of officers is the source of power in the military.” The question those at the Pentagon need to be asking themselves then is not what the Elon Musks of the world can inspire the U.S. military to do, but what instead inspires military leaders to accept the risk of promoting those from the middle ranks who might introduce some uncertainty into the military organization. Because what inspires a military organization to accept that type of uncertainty is what will ultimately allow it to innovate.