The US must harness the power of Silicon Valley to spur military innovation

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Joe Felter is center director and a founding faculty at the Gordian Knot Center for National Security Innovation and holds teaching and research appointments at Stanford’s Center for International Security and Cooperation, the Hoover Institution, and Stanford Technology Ventures Program.

Raj Shah is a founding faculty at the Gordian Knot Center for National Security Innovation, a technology entrepreneur and investor, adjunct professor at Stanford, and former managing partner of the Pentagon’s Defense Innovation Unit Experimental.

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The Department of Defense, other U.S. government agencies and a bipartisan consensus in Congress realize that China is strategically leveraging diplomacy, information and intelligence, its military might and economic strength, and all other instruments of its national power to redefine the future world order.

Given China’s stated goals and objectives, we should expect continuity in this assessment in the coming decades.

To any dispassionate observer, U.S. responses to China’s aggressive whole-of-government efforts to dominate – especially in the military domain – have been piecemeal and ineffective. The systems (and people) we have in place to respond (requirements, acquisition, budgeting) were designed to optimize lifecycle cost and manage 30-year DOTMLPF processes.

Yet, we need the opposite to compete with our strategic rival – speed, urgency, scale, short life cycle, and attributable systems. Existing DoD systems are not designed to effectively tap into a commercial technology ecosystem that’s now driving most of the DoD-relevant advanced tech (AI/ML, autonomy, biotech, quantum, access to space, semiconductors, etc.)

We must more aggressively and deliberately harness the vast untapped potential of our world-renowned institutions of higher learning, namely the brilliant, innovative and creative students and faculty that flock to America’s flagship universities.

Many among the DoD’s senior military and civilian leaders understand this and have established well-intended innovation initiatives. But the enduring funding and efficacy of such initiatives often hinge on support from visionary individual leaders and are at risk when these key leaders’ tenures end.

The result is that our systems, organizations, headcount, and budget can’t scale to meet the challenge of China and other potential rivals. Our adversaries are innovating faster than our traditional systems can respond.

Many have written about reform of existing DoD systems (fix the planning, programming, budgeting and execution (PPBE) process; scale DoD accelerators and the Defense Innovation Unit; better utilizing existing acquisition authorities, etc.).

All are fine ideas, but they miss a core problem – the DoD has not engaged with commercial industry at scale. Harnessing the extraordinary potential of the U.S. private sector and bringing its vastly superior resources to bear more effectively is the key to prevailing in this strategic competition.

Silicon Valley is ready to get back in the game

For the first two decades after World War II, Silicon Valley was really “defense valley.” It built chips and systems for the DoD and intelligence community. Innovation in Silicon Valley started post-World War II with funding to Stanford University from the Office of Naval Research and then follow-on contracts from all the services to build advanced microwave and electronic systems.

The first major contract for the fledging semiconductor companies was for the guidance systems for the Minuteman II intercontinental ballistic missile and then the Apollo spacecraft. During the Cold War, Lockheed was Silicon Valley’s largest employer, building three generations of submarine launch ballistic missiles, satellites and other weapons systems. Arguably, our ability to mobilize the resources of Silicon Valley was critical to the U.S. ultimately prevailing in the Cold War competition with the Soviet Union.

Prevailing in this century’s strategic competition will require us to bring similar resources and talent to bear. Today, Silicon Valley sits at ground zero of a technology ecosystem that dwarfs the DoD, its prime contractors and federal labs. This ecosystem thrives on the toughest problems, moves with speed and urgency and, when incentivized, can bring capital and people at an enormous scale to solve these problems.

But the DoD is reluctant to acknowledge that this is a resource to tap at scale and speed. And because it hasn’t fully acknowledged it, it hasn’t considered what would be possible if you could marshal those resources.

And because it hasn’t imagined it, it hasn’t thought about what types of incentives could move the more than $300 billion per year in VC investments (versus $112 billion for DoD’s Research, Development, Test and Evaluation (RDT&E) Program or $132 billion in procurement) into areas that support dual-use activities with the potential to bolster our national security. (Think massive tax incentives, etc.)

The adage “to a hammer everything looks like a nail” aptly describes the answer to problem sets like threats to sovereignty and international law. Most thinking has been restricted to having more/better versions of existing weapon systems (ships, carriers, boomers, etc.) rather than alternate operational concepts and weapons that can be rapidly deployed to deter or win a war in the South China Sea or in the Baltics or Kaliningrad corridor.

It almost seems that conversations about new systems and concepts built around small, cheap, attributable, autonomous, lethal, mass, distributed, short-lifecycle projects from new vendors are prohibited. Yet, these are exactly the solutions an innovation ecosystem would rally around. Imagine, for example, 50 SpaceX equivalents helping to build a 21st-century DoD.

Bringing America’s best and brightest to strategic competition

Focusing and unleashing the power of the United States’ private sector and of Silicon Valley, in particular, with its unmatched innovation and extraordinary capital investment potential, can reverse the U.S. slide in capabilities relative to China and maintain our edge across a range of critical technologies.

Beyond that, we must more aggressively and deliberately harness the vast untapped potential of our world-renowned institutions of higher learning, namely the brilliant, innovative, and creative students and faculty that flock to America’s flagship universities.

We’ve succeeded at this before. Stanford and nearly every other major U.S. research university were integral to the military innovation ecosystem during the Cold War. What was unique in Silicon Valley, however, was that Stanford’s engineering department actively encouraged professors and graduate students to start military electronics companies, taking the best people and commercializing the technology to help win the race against the Soviet Union.

Inspired by this historic precedent, we recently established the Stanford Gordian Knot Center for National Security Innovation to harness Silicon Valley’s technology, talent, capital, speed, and passion for tough problems and help the United States prevail in this new era of strategic competition.

We must further advance efforts that coordinate resources across Silicon Valley and other innovation ecosystems. At our top universities, we must scale national security innovation education; train national security innovators; offer insight, integration, and policy outreach; and provide a continual output of minimal viable products that can act as catalysts for solutions to the toughest problems.

The stakes are too high not to bring all our resources and our very best human capital to the table.

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Steve Blank Joe Felter and Raj Shah