29 November 2014

Editorial: Can China Tap Private Sector Innovation in Defense?



By Robert Farley

The United States isn’t the only country looking to inject some civilian-sector innovation into defense technology.

Early last week, the Pentagon announced a new initiative designed to broaden the defense industrial pool by appealing to smaller, non-traditional firms.  This is hardly the first time that DoD has launched such an initiative; over the past decade and a half, the Pentagon has repeatedly made efforts to shift procurement dollars to firms not normally associated with defense technology. The DoD keeps trying to do this because it wants to capture some of the dynamism of the civilian tech economy, reduce costs for key technologies, and introduce additional competition to defense procurement. Rhetorically, proposing to “give the little guy a leg up” appeals to Congress and the media.
So why does the Pentagon keep having to launch these initiatives?  They often don’t work, for several reasons. Traditional defense firms have spent a lot of time and money mastering the byzantine procurement process. Such firms usually have long-standing connections with the Pentagon, often hiring retired DoD civilians and former military officers. Finally, the Pentagon’s system of intellectual property management tends to scare away firms that want to maintain a foothold in the civilian market.
What’s interesting about this latest appeal is that it appears to come alongside a similar appeal from the Chinese military. The PLA has announced an effort to open multiple procurement projects up to civilian technology firms. The PLA’s language sounds remarkable similar to DoD’s: “The public procurements of 108 defense-purpose products is unprecedented in the history of development of the PLA, which will definitely be conducive to raising the effectiveness of military expenditures, optimizing military resource allocation, and boosting national defense modernization.” 

Read the full story at The Diplomat