Fresh Options to Reinvigorate Defense Innovation for the World as It Is Now

Speakers: Mike Brown (Director, Defense Innovation Unit, Former CEO of Symantec Corporation); Dr. Carl Hunt (US Army, Retired); Dr. Jim Lewis (Senior Vice President and Director, Strategic Technologies Program, CSIS); and Sir Geoff Mulgan (University College, London, [UCL]; Former Chief Executive of Nesta, the UK’s innovation foundation)

Date: 3 February 2021

Speaker Session Summary

SMA hosted a panel discussion as a part of its new SMA NDU/PRISM event series, entitled “Innovation Now—New Paths Forwards.” The panelists included Mr. Mike Brown (Director, Defense Innovation Unit, Former CEO of Symantec Corporation), Dr. Jim Lewis (Senior Vice President and Director, Strategic Technologies Program, CSIS), Sir Geoff Mulgan (University College, London, [UCL]; Former Chief Executive of Nesta, the UK’s innovation foundation), and Dr. Carl Hunt (US Army, Retired). The moderator was Dr. Nicholas Wright (Intelligent Biology, Georgetown University, UCL, and New America).

Dr. Wright began the discussion by stating, “Strategy is the art of creating power.” He went on to explain that technological innovation has been central to creating political, economic, and military power for at least the last two centuries; however, the way innovation creates power has changed over time. In the 1960s, US innovation was driven by its competition with a peer competitor: the Soviet Union. The Cold War was also responsible for the creation of the Defense Advanced Research Projects Agency (DARPA), whose purpose is to federally fund and conduct innovative research. Dr. Wright then emphasized that unlike the Soviet Union, China is not currently a peer competitor to the US; however, he argued that China is competing with the US in the field of research and development (R&D). He concluded his introduction by presenting the primary question of this discussion: “How does the US and its allies continue to innovate in today’s environment?”

Mr. Brown began his presentation by also referencing the Cold War. He stated that in the 1960s, the environment for innovation in the US’s DoD was vastly different than it is today. He pointed out that in the 1960s, the DoD accounted for most of R&D in the US, which in turn made up most of the R&D globally. However, today, the US is responsible for less than a third of the world’s total R&D. Unlike during the 1960s, the US’s private sector now accounts for more innovation and spends more on R&D than the government sector, Mr. Brown added.

Mr. Brown continued by stating that not only has the amount of R&D produced in the US changed, but there has also been a shift in the focus of the research being done. During the 1960s, thirty-six percent of global R&D was produced by the US’s DoD and focused on technology, including microelectronics, touch screen, global positioning systems (GPS), space launch, and satellite imagery. Today, US defense-related R&D makes up only four percent of the world’s R&D and mostly focuses on technology related to 5G networks, artificial intelligence (AI), biotechnology, mobile payments, quantum computing, batteries, and power systems. Mr. Brown argued that part of the reason why the US’s share of global R&D has shrunk is because other countries have grown their own economies immensely.

Mr. Brown then added that because the US private sector innovates more quickly, the DoD has gone from a first adopter of technologies to an investor in technology research, which leads many of the technologies being adopted to carry dual-use capabilities. He further explainned that because the DoD is relying on the commercial sector for innovation in technology, it needs to find and adopt these technologies quickly. This is partly why the Defense Innovation Unit (DIU) was founded. 

Mr. Brown continued to emphasize the importance of the government’s investment in R&D by stating that federally funded R&D traditionally leads to large societal breakthroughs in technology. However, this trend has changed due to the percentage of US GDP that federally funded R&D makes up has shrunk from two percent in the 1960s to less than one percent today. To further emphasize this point, Mr. Brown highlighted that the top five technology companies in the US have spent 70.5 billion dollars, while the top five US federal defense companies spent 6.2 billion dollars on R&D. He explained that one reason why innovation occurs more quickly in the private sector is because commercial entities have fast moving product cycles, which has caused the DIU to try and match technological breakthroughs in the commercial sector with urgent DoD needs. Moreover, Mr. Brown stated that the DIU is hoping to increase this practice by helping private sector vendors, which provide dual use capabilities, flourish. An example of this public-private partnership is Capella Space, which is partnered with the DIU and produces high resolution satellite imagery.

According to Mr. Brown, budget reform in Congress is the largest roadblock to the DoD possessing the latest defense technology. He also stated that bureaucracy in the US State Department and DoD make securing funds from Congress for R&D difficult. He added that new advancements in technology occur much more quickly than the two-year budget cycle in Congress. However, because this issue has increased in prevalence, more attention has been given to acquisition reform in the last five years than in the previous thirty. Due to this added security, the DIU benefits from Other Transaction Authority (OTA), which was given to NASA 60 years ago in a reaction to the Soviet Union’s successful launch of Sputnik and allowed NASA to carry out its own research more quickly. Mr. Brown concluded his presentation by stating the DoD wants to implement technologies that are better, faster, and cheaper in a timeframe that the Congressional budget cycle does not allow. 

Dr. Lewis began his presentation by concurring with Mr. Brown’s previous statement that the way the US generates innovation has changed. He claimed the US government (USG) is more focused on innovations coming from the private sector, both domestic and foreign, than creating innovation itself. This is partly because although private corporations in the US innovate quickly, they have weak economic incentives to work directly with the USG due to concerns over export control, which can negatively affect companies’ financial profits. According to Dr. Lewis, the fact that the largest private US corporations do not establish their headquarters in DC is evidence of their lack of interest to be involved directly with the USG. 

Dr. Lewis also acknowledged that the USG has a risk averse culture, which is counter intuitive to creating innovation. This raises the question, “How does the DoD work to change its culture to be more risk acceptant while still creating innovation despite its current risk averse culture?” Dr. Lewis believes the answer to this question is for the DoD to continue partnerships with entrepreneurs, who are risk averse by nature. He also asserted that being both serendipitous and opportunistic will play a large role in whether the DoD will successfully innovate because it is impossible to be certain where the evolution of technology will end. This makes it important for the DoD to be able to take advantage of unexpected opportunities for further innovation. 

Dr. Lewis asserted that adequate funding for R&D programs and science, technology, engineering, and mathematics (STEM) courses in the US educational system are fundamental requirements. He then emphasized that there is not a cheap way for the US to win its competition with China over technological advancement. Concurring with Mr. Brown’s evaluation of the current R&D environment, Dr. Lewis stated that the US’s bureaucratic system slows down R&D programs. He argued that the system should become less bureaucratic and that there should be more job security risk for those running the R&D programs if they do not deliver.

Dr. Lewis then transitioned his focus to how the DoD can translate investing in R&D programs to acquiring a usable product. He mentioned incremental innovations in a technology, which are especially prevalent in the automotive industry, as being important to the overall success of a technology’s evolution. He also made the point that technological innovation and risk adversity are usually positively correlated because technological advancements are mostly designed to lessen risk. Dr. Lewis further claimed that the USG can create internal innovation by funding the National Science Foundation (NSF) and DARPA to similar levels as the National Institute of Health (NIH). This would be an easily quantifiable goal but also a politically challenging one. Dr. Lewis concluded by stating that the translation from investing in R&D to acquiring a usable product is the area that requires the most revision and that one way the USG can improve is by providing a regulatory safe harbor for commercial innovators and entrepreneurs.

Dr. Hunt’s first comment was that innovation in language—mankind’s first global singularity which eventually led to the printing press—was the first indication that there could be an international pool of shared ideas. Dr. Hunt likened the printing press to the creation of the first internet. He claimed that the current environment is a mixture of software, hardware, and tactics, which all must be blended effectively for the USG to innovate in a systemic fashion. Dr. Hunt believes that the need to innovate in a targeted and systematic way largely varies between the commercial and government industry, as commercial companies innovate and build products purely for financial gain. 

Dr. Hunt then referenced Stuart Kauffman (the founder of the idea of the adjacent possible (TAP)) and Steven Johnson’s later representation of Kauffman’s theory, which shows that individuals tend to work on innovations surrounding the materials and technology they already possess. Dr. Hunt pointed out that as innovation accelerates, it frequently places stress on resources new technology utilizes, which could potentially lead to further innovation to address new challenges. Several examples of stress on resources caused by innovation are water scarcity and climate change.

Dr. Hunt concluded by emphasizing that issues such as water scarcity and global warming are global issues and can be better solved by the US sharing scientific information with its allies. A possible way to increase the sharing of scientific information between the US and its allies would be the development of an International Academy of Defense, Science, and Innovation, which would also potentially help the US harness and take advantage of new technologies in AI, evolutionary computation, discovery-based modeling, and emergent engineering.

Sir Geoff began his presentation by referencing Bell Labs, which was the US company most responsible for innovation during the 1960s. He stated that Bell Labs’ key to success was aggregating as many researchers as it could to create the largest pool of knowledge possible. Sir Geoff believes that this is still a research model that is applicable in the current R&D environment, which is much broader than it was in the 1960s. He stated that types of innovation that could occur through this model include user, social, public, design-led, frugal, services, and data.

Sir Geoff then commented that a current challenge to the research community is that the productivity in innovation has slowed down immensely despite increased spending on R&D. This issue has led to innovations in how companies and governments innovate. In his opinion, Parliament and Congress have not yet recognized this situation; however, they will if the current downward trajectory of productivity in R&D programs continues. Sir Geoff added that AI and machine learning (ML) can increase productivity of R&D programs. A success story of AI learning is DeepMind, located in London, which was able to increase the discovery of proteins found in DNA strands by aggregating thousands of AI researchers, much like the R&D strategy Bell Labs used. Like previous speakers, Sir Geoff emphasized the importance of scientific collaboration and used the incredibly fast-paced development of the COVID-19 vaccine as an example. He also asserted that R&D programs in the Netherlands, which allow researchers to help allocate funds for further research, helped decrease bureaucratic roadblocks to funding timely research programs. Sir Geoff emphasized that those in the research community should focus on research examining research practices, which could help researchers identify which tools work in each of their unique innovation ecosystems.\

Sir Geoff then argued that the way in which the US is conducting whole system innovation is not as effective as China. To make this point, he referenced City Brain Lab, an offshoot of Alibaba that is now experimenting with intelligence systems at a city-wide level. Communication between governing bodies and entrepreneurs can lead to anticipatory regulations, which can allow a country’s business regulations to change and allow innovation to occur and have maximum impact. Anticipatory regulation is a practice that is mostly used in finance but has also been used in mechanical technology such as drones and automobiles. Sir Geoff also suggested that having “challenge prizes” for finding innovative solutions to issues can help increase individual researcher’s productivity.

Sir Geoff finished his presentation by stating that by combining the research elements discussed in the presentation (AI, individual’s own intelligence, and data) is the best way to innovate and problem solve through collective intelligence. 

Speaker Session Recording

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Briefing Materials

Biographies:

Michael Brown is the Director of the Defense Innovation Unit (DIU) at the U.S. Department of Defense. DIU, established in 2015, fields leading-edge commercial capabilities to the military faster and more cost-effectively than traditional defense acquisition methods. With offices in Silicon Valley, Boston, Austin, and at the Pentagon, DIU is embedded in key innovation ecosystems across the country and builds direct relationships with organizations that strengthen our national security innovation base.

Previously, Michael served two years (2016-2018) as a White House Presidential Innovation Fellow at DoD. He is the co-author of a Pentagon study on China’s participation in the U.S. venture ecosystem, a catalyst for the Foreign Investment Risk Review Modernization Act (FIRRMA). FIRRMA was signed into law in August 2018 and provided expanded jurisdiction to the Committee on Foreign Investment in the United States (CFIUS).

Additionally, he led the initiative for a new Defense Department-sponsored investment vehicle, National Security Innovation Capital (NSIC) to fund dual-use hardware technology companies.

Through August of 2016, Michael was the CEO of Symantec Corporation, the global leader in cybersecurity and the world’s 10th largest software company with revenues of $4 billion and more than 10,000 employees worldwide. Michael served as a member of Symantec’s Board since its merger with Veritas in 2005. During his tenure as CEO (2014-2016), Michael led a turnaround developing a strategy focusing on its security business, sold its Veritas storage software business, hired a new executive leadership team and improved operating margins 300 basis points. Additionally, he led the articulation of a new company culture fostering innovation.

Michael is the former Chairman & CEO of Quantum Corporation (1995-2003), a leader in the computer storage industry. As CEO of Quantum, the company achieved record revenues of $6 billion as the world’s leader in disk drives for personal computers and the world’s largest tape drive business. He joined Quantum in 1984 and served on its Board from 1995 until 2014.

After leaving Quantum, Michael served as Chairman of EqualLogic, a storage array company. Dell acquired EqualLogic in 2008 for $1.4 billion, the largest all-cash deal for a venture-backed company up to that time.

He has been a member of the Board of Trustees of the Berklee College of Music in Boston since 2013 and previously served on the President’s Advisory Council.

Michael received his BA degree in economics from Harvard University in 1980 and his MBA degree from Stanford University in 1984.

James Lewis is a senior vice president and director of the Technology Policy Program at the Center for Strategic and International Studies (CSIS). He has authored numerous publications on the relationship between technology, innovation, and national power. His current research examines international security and governance in cyberspace, the geopolitics of innovation, the future of warfare, and the effect of the internet on politics. Lewis is an internationally recognized expert on cybersecurity and technology and was one of the first to approach cybersecurity as a policy and strategic problem. His writings include the best-selling Cybersecurity for the 44th Presidency, the national cybersecurity strategy cited by President Obama in the first speech by a U.S. president on cybersecurity and that became a template for cyber strategy in other countries. Lewis was the rapporteur for the United Nations’ successful 2010, 2013, and 2015 Group of Government Experts on Information Security, whose reports set out the global agenda for cybersecurity by emphasizing norms for responsible state behavior, confidence building, and capacity-building measures.

Before joining CSIS, Lewis worked at the Departments of State and Commerce as a foreign service officer and as a member of the Senior Executive Service. His government experience included a range of politico-military and negotiating assignments, including the development of groundbreaking policies on commercial remote sensing, encryption, and advanced conventional weapons. He was assigned as a political advisor to the U.S. Southern Command for Operation Just Cause, the U.S. Central Command for Operation Desert Shield, and the Central American Task Force. Lewis served on the U.S. delegations to the Cambodian peace process and the Permanent Five talks on arms transfers and nonproliferation, and he negotiated bilateral agreements on transfers of military technology to Asia and the Middle East. He led the U.S. delegation to the Wassenaar Arrangement Experts Group on advanced civilian and military technologies. Lewis led a long-running Track 2 dialogue on cybersecurity with the China Institutes of Contemporary International Relations. He has served as a member of the Commerce Spectrum Management Advisory Committee, the Advisory Committee on International Communications and Information Policy, and the Advisory Committee on Commercial Remote Sensing and as an advisor to government agencies on the security and intelligence implications of foreign investment in the United States. Lewis is frequently quoted in the media and has testified numerous times before Congress. He received his Ph.D. from the University of Chicago. 

Dr. Carl Hunt attended the University of Houston and received his BA in Journalism. He earned his MA in Public Administration from the University of Houston-Clear Lake. Dr. Hunt served in the US Army, working in law enforcement, including as Commander of the Computer Crime Investigation Unit. In 2001, Dr. Hunt earned his Ph.D. in Information Technology from George Mason University. He also has an MS in National Security Studies from the National War College. Dr. Hunt served as an Information Technology researcher and consultant to the DoD. He also consulted with the DoD Joint Staff, OSD, and IC sponsors. He also worked as Senior Research Director for Directed Technologies, Inc., providing consulting to the DoD. Dr. Hunt served as Lead Scientist on The SENDS Project, which seeks to explain and predict the nature of emergence and connectivity that cyberspace enables. In 2011, Dr. Hunt founded Pioneer Cyberspace Strategies, a consulting service that provides analysis on the socio-technological convergences that make cyberspace a rich web of possibility. Dr. Hunt, along with Joshua Hunt, recently published “Paradoxes of Power: A Collection of Essays on Failed Leadership – and How to Fix It.”

Sir Geoff Mulgan CBE is Professor of Collective Intelligence, Public Policy and Social Innovation at University College London (UCL). Prior to that he was Chief Executive of Nesta, the UK’s innovation foundation, between 2011 and the end of 2019. From 1997 to 2004 Geoff had roles in the UK government including director of the Government’s Strategy Unit and head of policy in the Prime Minister’s office. From 2004 to 2011 he was the first Chief Executive of The Young Foundation. He was the first director of the think-tank Demos; and has been a reporter on BBC TV and radio.

At UCL he teaches undergraduates (in the Science and Engineering for Social Change BSc), graduate students in MPA programmes, and PhD students.

He has a PhD in telecommunications and has been a visiting professor at London School of Economics (LSE) and Melbourne University, a senior visiting scholar at Harvard University and President of the Innovation Design Department at the Italian University for Design (IAAD) in Turin. He has also been a regular lecturer at the China Executive Leadership Academy.

Geoff helped found many organisations including Demos, the Young Foundation, the Social Innovation Exchange (SIX), Uprising, Studio Schools Trust, Action for Happiness, the Alliance for Useful Evidence, the Australia Centre for Social Innovation and Nesta Italia. He has co-chaired a World Economic Forum group looking at innovation and entrepreneurship in the fourth industrial revolution.

He has advised many governments. He is on the advisory panel for STOA which advises the European Parliament on science and technology. He was a World Economic Forum Schwab Fellow from 2019-22, and a fellow of Demos Helsinki and the New Institute in Hamburg. In 2023-24 he chairs a European Commission programme on ‘Whole of Government Innovation’.

He is an editor in chief of the Collective Intelligence journal published by ACM and Sage (launched 2022).

He has pioneered many ideas used by governments and others – including creative economy strategies, joined-up government, anticipatory regulation, experimentalism, open innovation and problem-solving methods. Geoff has given TED talks on the future economy, happiness and education. He was knighted in the Queen’s Birthday Honours in 2020 (https://profiles.ucl.ac.uk/76510-geoff-mulgan).

Dr. Nicholas Wright is affiliated with Georgetown University, University College London (UCL), Intelligent Biology and the Center for Strategic and International Studies. He combines neuroscientific, behavioral and technological insights to understand decision-making in politics and international conflict, in ways practically useful for policy. He works with Governments. He has academic (e.g. Neuron) and general publications (e.g. Foreign Affairs). He edited a book on Artificial Intelligence, China, Russia and Global Order (2019, Air University Press). He has a medical degree from UCL, a BSc in Health Policy from Imperial College London, Membership of the Royal College of Physicians (UK), and an MSc and PhD in Neuroscience from UCL.

The SMA INSS/PRISM Speaker Series description and list of the other sessions in this series can be downloaded here.