Technology and talent are key to defense modernization

The world as we know it today would not exist without the close ties between the Department of Defense, academia, and industry throughout the Cold War. The Internet and GPS were born from these public-private partnerships and became part of the foundation of American leadership in the global economy.

Now, those same kinds of partnerships could again help make the Defense Department more innovative and effective, and make Americans safer. Military leaders recognize the importance of forming these partnerships, but removing bureaucratic obstacles is easier said than done.

The Department of Defense established the Defense Innovation Board, which I chair, to help the Department of Defense build relationships outside of government and beyond the existing defense industry. Our role is to conduct independent studies and interviews and provide reform recommendations to Secretary of Defense Lloyd Austin and other senior leaders. In many cases, the capabilities the Department needs already exist; the challenge is to adopt and scale them.

One of the committee's areas of focus is changing how agencies handle data. In the private sector, data is an asset, a resource that can help improve an organization in the long term. But in the military, good data is too often out of reach. It's not collected. It's not digitized, it's just piles of paper tucked away in cabinets. The quickest way to capture and share data is to put it on a disk and send it through the mail. And even if you can do that, data is only as good as the analytical tools to unlock its potential, which agencies often lack.

In addition to these outdated systems, corporate contracts too often limit the division's access to the data the two companies create together. Outdated contracting practices have left the division without control over the intellectual property it should retain. Ensuring more efficient, cost-effective operations can start with retaining more of its intellectual property. The challenge is to make that happen while also making broader changes to how the division works and speeding up a traditionally shady and unwieldy acquisition process.

For example, the Pentagon is focusing on buying available commercial technology, where appropriate, from small businesses and startups that manufacture it. The Pentagon's Replicator program aims to deploy thousands of drones in 18 to 24 months, instead of the usual five years. It's a promising development, but a one-off project, no matter how successful, won't be enough to overhaul DoD procurement across the board, nor will it keep the military pouring money into outdated legacy systems.

The Defense Department will likely need to do more of the same by canceling the Army's decades-old Raven and Shadow drone programs. Changing course and supporting more effective models is now even more urgent as evidence mounts in Ukraine that some drones made by U.S. startups are flawed.

There are many areas where high-tech weapons and other systems can be procured faster and at lower cost, such as buying parts for large machines. But right now, the Defense Department doesn't have the ability to bypass the big prime contractors and turn to other vendors for help or competitive bidding. This puts a strain on taxpayers. For example, the cost of the F-35 has soared to over $2 trillion while still missing the Defense Department's capability goals.

Companies should be fairly compensated for their products and services, but the status quo is allowing shareholders of the large prime contractors to get rich while our national security and taxpayers suffer. The American people should not put up with this situation. If the prime contractors are not willing to at least work with the Department of Defense to open the way for greater competition, which is both the ethical and patriotic thing to do, Congress should pass legislation to force them to do so.

But new technology is only one side of defense innovation. Industry and the Department of Defense must collaborate to develop the most important assets they can each possess. The key to innovation is not hardware or software, but talented people. Smart thinkers in business and the military must be empowered to take risks when the opportunity arises. And they must interact as closely and as often as possible to keep the sparks flying.

The Maritime Innovation Unit highlights the power of such collaborations: a reserve force of people with experience in fields ranging from artificial intelligence and data analytics to business management and venture capital. Based not far from New York City, they are problem solvers with private sector experience and connections.

In ordering the creation of the Marine Corps Innovation Unit, Secretary of the Navy Carlos del Toro sought to help the Marines acquire new technology more quickly. In one example, the unit helped the service research commercially available options and purchase a new boat in less than 12 months, a process that typically takes up to five years. Given the unit's early success, the service could consider replicating it near more technology hubs across the country, from Silicon Valley to North Carolina's Research Triangle, from Austin to Boston.

The Department of Defense has expressed a desire for a new era of innovation. There is an abundance of talent and capital in the private sector willing to meet that demand. The two sides should explore opportunities to bridge the gap and develop the technologies and talent that, as the Cold War demonstrated, can both defeat our enemies and bring enormous economic benefits to the American people.

Michael R. Bloomberg is founder of Bloomberg LP and Bloomberg Philanthropies and chairman of the Department of Defense's Defense Innovation Board. He served as mayor of New York City from 2002 to 2013. Opinions expressed in this column are Bloomberg's own.

Author: Michael Bloomberg Michael R. Bloomberg is founder of Bloomberg LP and Bloomberg Philanthropies and chairman of the Department of Defense's Defense Innovation Board. He served as Mayor of New York City from 2002 to 2013.

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