The Most Important Experiment in Defense Innovation That No One is Talking About
Eric Snelgrove is a former professional staff member on the House Armed Services Committee and principal staff co-author of the Future of Defense Task Force report. He is a former active duty United States Air Force Intelligence Officer who currently serves as a the President and Founder of Revere Federal Strategies and a Sr. Advisor at Black Cape.
Eric Snelgrove
Founder and CEO of Revere Federal Strategies
Bio | LinkedIn
For the last two and a half years, a little known and extremely promising innovation experiment has been ongoing inside the Department of Defense. The experiment — and the results — shine a light on the promise of larger innovation reforms inside of the Pentagon, and the ongoing struggle for the military to overcome cultural resistance and rebrand itself as friendly to commercial innovation.
In 2018, the Air Force and its newly established AFWERX organization, launched a new “Open Topic” initiative under its federally mandated Small Business Innovation Research (SBIR) program. The SBIR program began in 1982 with the purpose of providing research funds to small businesses to stimulate technological innovation, meet federal research and development needs, and increase private-sector commercialization.
Over the last thirty years, the SBIR program has provided nearly $50 billion to small businesses across the country. However, there is growing concern that while still useful, the program has stagnated and is not attracting the type of high-growth emerging technology companies necessary to compete against upstart Chinese rivals.
To address these concerns, a small group of pioneering Airmen experimented with a new approach. Rather than relying solely on the research ideas generated from within the upper echelon of the Air Force, AFWERX would provide “Open Topic” opportunities that allow small firms and entrepreneurs to propose any idea or technology that may have an Air Force application.
They hypothesized that they might well discover new technologies and allow commercial industry and innovative startups to do what they do best — innovate new technology solutions and original applications. While recognizing the need for requirements that meet a specific defense need, these Open Topics provided a new approach to engage a broader cross-section of the innovation ecosystem. Over the last two years, the Air Force has awarded over 2,200 contracts under the Open Topic program. The results have been stunning.
The initiative attracted a new type of company into the program — one that is, on average, almost ten years younger, twice as small, and less likely to have previously worked with the Department of Defense than other applicants. Even more astounding, the data showed that small firms that were selected for an Open Topic award were more likely to receive follow-on private investment, more likely to receive non-SBIR defense contracts after award, and more likely to be granted future patents — indicating continued invention and commercialization potential.
In short, this new batch of companies was more successful at achieving the goals of the federally mandated SBIR program than ever before. These companies weren’t just more successful — they were different and more diverse. They were less likely to have previously received an SBIR award and more likely to hail from one of the country’s emerging innovation hubs.
Outside of the immediate defense application and economic benefit, the Open Topic initiative addresses some of the Pentagon’s major innovation deficits. The program was able to overcome the cultural resistance and innovation obstructionists inside of the Pentagon that prefer large incumbents, a rigid requirements process, and suffer from a severe case of not-invented-here syndrome. If the DoD is truly going to embrace commercial innovation, it needs to have a mechanism to accept their most innovative ideas.
It is time for Congress and the DoD to take notice — and to capitalize on the success of the Air Force’s Open Topic program and expand it to the Army, Navy, and other defense agencies. Scaling the program will by no means cure all the department’s innovation woes — including creating additional mechanisms to transition the most successful companies out of the SBIR program into recurring sources of funding and programs of record — but it is sending an important message to our next generation of great entrepreneurs that the Pentagon is open for business.
This piece was feature in Breaking Defense on June 24, 2021