November 2024
The US national security community struggles to adopt emerging commercial technologies at the speed and breadth at which they are offered by industry. This potentially places national security missions at risk. Mitigating such risks to the volume, velocity, and value by which technologies transition from the commercial sector to fielded capabilities can translate to a real advantage in the global competitive environment.
Stemming from its mission at the intersection of science, technology, business, and government, the Potomac Institute conducted an independent study (September 2023 to April 2024) to assess enterprise innovation entities across the national security community. The study aimed to determine whether such organizations have made a difference in their mission to accelerate the adoption of emerging technologies and capabilities for mission-relevant applications. If so, how? If not, why not?
The study focused on a comparative analysis of four national security innovation entities: Defense Innovation Unit (DIU), AFWERX, SOFWERX, and In-Q-Tel (IQT). Potomac Institute researchers examined each entity’s mission, organizational structure, authorities, funding models, and measures of effectiveness. The findings in this report are based on dozens of non-attributed interviews with senior subject matter experts throughout the national security and intelligence communities, the Department of Defense, industry, academia, and venture capital firms. Additionally, an extensive literature review identified best practices across the specified innovation entities.
Overall, the study concluded that effective enterprise innovation entities require clarity of mission, robust communication lines, leadership top cover, and organic resources to improve chances of success. More broadly, the study concluded that:
- Innovation entities should have a clear mission articulating their unique contribution (e.g., cross-cutting priorities) to enable the rapid adoption of innovative commercial technologies, differentiating them from other similarly focused organizations.
- The entity should be government-run, report to senior leadership of its parent organization, coordinate collaboration across multiple communities, and complement ongoing enterprise efforts.
- Innovation organizations should grow incrementally over several years while developing budget authorities substantial enough to attract companies that can provide mission-relevant technologies and capabilities.
- Measures of success will evolve over the years, with the speed of engagement (the time from first contact with an industry provider to a contract or agreement) emerging as a critical enabler.
