Making Innovation Happen

By Ms. Margaret C. RothAugust 15, 2016

GUT REACTION
1 / 13 Show Caption + Hide Caption – Jason Soares, a chemical engineer at the U.S. Army Natick Soldier Research, Development and Engineering Center (NSRDEC), is investigating biofermentation in gut bacteria. Early research is an important part of the mission of NSRDEC, laying the ground... (Photo Credit: U.S. Army) VIEW ORIGINAL
ENERGETIC INNOVATION
2 / 13 Show Caption + Hide Caption – Julie Douglas, an engineer at the U.S. Army Communications-Electronics Research, Development and Engineering Center's Command, Power and Integration Directorate (CERDEC CP&ID), demonstrates the Integrated Soldier Power and Data System, which ultimate... (Photo Credit: U.S. Army) VIEW ORIGINAL
QUICK FIX
3 / 13 Show Caption + Hide Caption – The U.S. Army Tank Automotive Research, Development and Engineering Center (TARDEC) provides first-of-its-kind training to Army welders to repair Stryker brigade combat team vehicles in the field, returning the Stryker to the commander much more rapi... (Photo Credit: U.S. Army) VIEW ORIGINAL
FIGURE 3: DEFENSE R&D, BY THE NUMBERS
4 / 13 Show Caption + Hide Caption – (Photo Credit: U.S. Army) VIEW ORIGINAL
NEW ARMORED TACTICS
5 / 13 Show Caption + Hide Caption – Soldiers of the 55th Armored Infantry Battalion and a tank of the 22nd Tank Battalion move through a smoke-filled street on April 22, 1945, in Wernberg, Germany. Between World War I and World War II, tank warfare evolved from merely supporting infant... (Photo Credit: U.S. Army) VIEW ORIGINAL
FOREIGN TECH
6 / 13 Show Caption + Hide Caption – The Tianhe-2 at the National Supercomputer Center in Guangzhou, China, is ranked as the world's fastest supercomputer. Developed at the military-operated National University of Defense Technology, the system represents one of several areas in which U... (Photo Credit: U.S. Army) VIEW ORIGINAL
FIGURE 4: PUTTING BBP TO WORK
7 / 13 Show Caption + Hide Caption – Welby believes reasserting technical dominance will require fundamental changes in DOD thinking. The many specific principles of smart acquisition that make up the BBP initiative help free resources for innovation, he said--but they don't substitute ... (Photo Credit: U.S. Army) VIEW ORIGINAL
ENHANCING THE NETWORK
8 / 13 Show Caption + Hide Caption – To improve operations in the field, CERDEC looks at the interoperability and efficiency of communication capabilities for expeditionary forces and troops on the move, including hardware convergence, network simplicity and cellular and intra-Solider w... (Photo Credit: U.S. Army) VIEW ORIGINAL
FIGURE 2: FORGING NEW PATHS FROM SMALL STARTS
9 / 13 Show Caption + Hide Caption – Fortune 500 companies, once the drivers of key innocvations, are now taking a back seat to small business. (SOURCE: "Where Do Innovations Come From? Transformations in the U.S. National Innovation Syste, 1970-2006, "by Fred Block and Matthew R. Kelle... (Photo Credit: U.S. Army) VIEW ORIGINAL
FIGURE 1: SEIZING OPPORTUNITY
10 / 13 Show Caption + Hide Caption – The Hon. Stephen P. Welby, ASD(R&E), outlined opportunities for innovation withing DOD at the second Army Innovation Summit at Aberdeen Proveing Ground in April. Welby believes DOD needs to "regorw some of the muscle tome that we had" during the Cold... (Photo Credit: U.S. Army) VIEW ORIGINAL
INNOVATING SAFETY
11 / 13 Show Caption + Hide Caption – The PackBot 510 robot—capable of assessing chemical, biological, radiological, nuclear and explosive threats—undergoes final testing late last year at the Army's Robot Logistics Support Center at Selfridge Air National Guard Base in Michi... (Photo Credit: U.S. Army) VIEW ORIGINAL
WIRED INTO TECHNOLOGY
12 / 13 Show Caption + Hide Caption – On April 13, the U.S. Army Research Laboratory (ARL) and the University of Southern California Institute for Creative Technologies formally opened ARL-West, a new facility that brings S&T knowledge not readily available on the East Coast into the ARL... (Photo Credit: U.S. Army) VIEW ORIGINAL
ENVISIONING THE FUTURE
13 / 13 Show Caption + Hide Caption – ARL researchers envision a future where Soldiers identify mission requirements and receive, for example, a customized unmanned aerial vehicle (UAV) fabricated through 3-D printing with local assembly. Innovators face obstacles that DOD and Army leade... (Photo Credit: U.S. Army) VIEW ORIGINAL

After 40 years of unquestionable U.S. military dominance over its adversaries, Pentagon officials say that our decisive advantage is gone.

Defense research and development (R&D), an indisputably powerful engine of innovation, has taken a sizable hit in the past decade. That is also true of industry's own, invaluable independent R&D (IR&D), but for different reasons. Deficit-driven budget cuts have reduced DOD spending on R&D by 18 percent from FY06 to FY16, according to the American Association for the Advancement of Science. The Army itself has seen a 49.8 percent reduction in R&D spending during that time.

U.S. industry's IR&D expenditures now greatly exceed the government's, and foreign IR&D expenditures greatly exceed the sum of both U.S. government and industry R&D. But within the U.S. defense industry, IR&D spending has declined. While the decade following 9/11 saw a significant rise in sales of defense and security systems, industry's investments in IR&D were not so dramatic. As a percentage of sales, IR&D investments by top defense contractors declined by nearly one-third between 1999 and 2012, according to a 2014 report by the Information Technology & Innovation Foundation.

ENHANCEMENT OVER ADVANCEMENT

For the past 15 years, the focus for both DOD and the defense industry has been on delivering near-term

to warfighters in theater, primarily in Southwest Asia, and DOD has spent trillions of dollars on the conflicts in Iraq and Afghanistan. On the conservative end of the spectrum of estimates, the Congressional Budget Office puts the total cost of both wars at $1.6 trillion to $1.65 trillion from FY01 to FY15, based on spending from DOD's overseas contingency operations account.

At the same time, Congress has focused its attention on the ongoing conflicts, not on the long-term viability of the defense acquisition system. Most of the effort to rein in acquisition inefficiencies has resided in DOD's Better Buying Power initiative, leading to measurable dollars saved and costs avoided but nowhere near the scale envisioned by proponents of systemic acquisition reform in the Pentagon and on Capitol Hill. They are looking for ways to control acquisition practices that, over the past several decades, have led to development and procurement costs averaging 20 to 30 percent more than DOD's initial figures, by congressional estimates.

Meanwhile, the current global picture is a far cry from that of the Cold War era, when the United States competed head to head with known adversaries for the next, best military capability. Indeed, Pentagon officials see multiple potential threats: the military modernization and expanding capabilities of several nations, including China and Russia and, to a lesser extent, North Korea and Iran; instability in the Middle East and Africa; and terrorists worldwide.

The slowdown in defense-related R&D of all stripes and the continued lack of funding mean that the services increasingly must seek to enhance capabilities with innovative, commercial off-the-shelf technologies. Those solutions meet warfighters' needs at an economical cost but, as DOD leaders point out, provide little advantage, since they are available to anyone, friend or foe. The defense industrial base has responded to the changes in military missions and strategies by focusing primarily on meeting DOD's near-term needs. For the prime contractors with established major weapon systems and the small companies that do not have commercial sales to leverage and must diversify quickly or perish, there has been little incentive to venture into dramatically new solutions.

A CONCEPT THAT'S EASIER TO DEFINE THAN TO DO

Now that the U.S. military is at this historic crossroads, how will it continue to provide warfighters with capabilities that give them a decisive advantage over current and as-yet undefined enemies?

Innovation, among other things. As a concept, "innovation" has become a buzzword, and it is also becoming a major policy thrust, gaining momentum daily throughout DOD. But what does it really mean? According to Merriam-Webster, innovation is: 1) the introduction of something new; or 2) a new idea, method or device.

But defining something is vastly easier than actually doing it. Innovation has many different shades of meaning for the various defense communities--in acquisition, logistics, science and technology (S&T), industry and academia--not the least of them industry, tasked with actually converting requirements into concepts and concepts into products.

The word "innovation" carries enough nuance to confuse rather than clarify. The words "enterprise," "collaboration," "culture," "agility" and "responsiveness" pop up frequently. So do the terms "knowledge sharing," "intellectual property," "return on investment," "life cycle management," "constrained resources" and "better buying power."

The Army Operating Concept, "Win in a Complex World," defines innovation as "the result of critical and creative thinking and the conversion of new ideas into valued outcomes. Innovation drives the development of new tools or methods that permit Army forces to anticipate future demands, stay ahead of determined enemies, and accomplish the mission." In other words, it is more than technology; it is new ways of thinking about technology.

In this swirl of words, all fraught with a growing sense of urgency, each of the stakeholder communities is grappling with how to interpret innovation within its own world and how to join forces with the other communities to actually make it happen, all within the constraints of congressional oversight.

Industry, in particular, is seeing its role evolve from one of meeting established (though not always clearly defined) requirements for well-funded programs. It is being asked to meet a much broader array of nascent needs with its IR&D funding, as DOD and the Army seek to get ahead of the technological curve and provide Soldiers with the capabilities needed for overmatch. The opportunities for industry to innovate are increasingly diverse--but where's the payoff? The question is central to building the "culture of innovation" that DOD wants, a culture of ideas, agility and open doors between government and the private sector that is as nimble as a mouse compared with the mammoth that is DOD now.

Army AL&T looked for answers to this and many other questions, from leaders in government, industry and academia. All had ideas on what still needs to happen.

THE ROOTS OF INNOVATION

That question, "Where's the payoff?" is not an insignificant one. Historically, American ingenuity has often been characterized by a garage, a great deal of passion, countless hours or years of un- or underpaid work, a prototype and hopes--sometimes realized, often not--of a massive payoff down the road. So, while founders of startups that now stand as Fortune 500 or 100 companies could only have dreamed of the riches they might make, they still dreamed. But dreams without passion, work and investment are just dreams.

Innovation is hardly a new concept to DOD, of course, but DOD is not a startup with grand dreams and an open horizon. The obstacles that innovators face within DOD are as real as the urge to make innovation happen: resistance to change, lack of leadership interest and limits on funding. (See Figure 3.)

A prime example from Army history is the tank prototyping and experimentation from World War I to the beginning of World War II, which led to the integration of tanks into the Army's mechanized combat arms formation. "Tank prototyping was driven by the imperative to find an alternative to embedded trench warfare tactics used in World War I," wrote Dr. Edie Williams, a consultant to the assistant secretary of defense for research and engineering (ASD(R&E)), and Alan R. Shaffer, then principal deputy to the ASD(R&E), in their article "The Defense Innovation Initiative: The Importance of Capability Prototyping" (Joint Force Quarterly, 2nd Quarter 2015).

"These efforts emerged from midgrade military officers driven by ideas for new tactics and employment techniques who challenged industry to develop technology that would facilitate their ideas," the authors wrote. The midgrade officers who led the effort were George S. Patton and Dwight D. Eisenhower, who had no way of knowing that their work ultimately would enable allied tank warfare to dominate World War II.

"Early on, though, Patton and Eisenhower argued against conventional TTP [tactics, techniques and procedures] wisdom and for using tanks as a separate arm of the fighting force not merely in support of the infantry." The officers received scant support for their views, Williams and Shaffer wrote. "After World War I, Army leadership, supported by Congress, disbanded the small tank units being used for experimentation and subordinated the few tanks that were left to the infantry."

Eisenhower and Patton continued experimenting and developing doctrine and TTPs, but the R&D funding all but evaporated. "Both officers were reassigned and the development of tanks stagnated." Congress subordinated tanks to the infantry in 1920, and the Army built a grand total of one tank prototype between 1925 and 1931.

That was not the end of tank development, however. A couple of senior leaders in particular--Brig. Gen. Samuel D. Rockenbach, formerly the first chief of the U.S. Army Tank Corps, and Secretary of War Dwight F. Davis--kept the momentum from dwindling to zero. The groundbreaking ideas Patton and Eisenhower had developed about a new armored force received more top-level support from Gen. Douglas MacArthur. In 1930, as the new Army chief of staff, MacArthur launched an effort to mechanize the force with a particular emphasis on tanks. With a battle plan that Eisenhower authored, the newly established Louisiana Maneuvers, designed to prepare the Army in anticipation of World War II, successfully field-tested the mechanized force in 1941.

"They force-fed change to an institution that otherwise was only beginning to shake off its prewar somnolence," Williams and Shaffer wrote.

The authors drew strong parallels between the introduction of tank technology and the experimentation efforts that followed, and the current military era: "declining defense budgets, shrinking force levels, limited research and development funding, and doctrinal and political debates about the character of warfare in the future."

"The first lesson to be learned is that, with limited resources, prototyping and experimentation are good investments. A second lesson is that doctrine based on past wars is not usually valuable when preparing for future conflicts. The final lesson is that there are always young men and women such as Eisenhower and Patton in our ranks who have creativity in their DNA. They should be allowed to share it within a system that supports agility and innovation."

FACING THE THREAT

Those lessons remain relevant, based on a presentation April 5 by the Hon. Stephen P. Welby, ASD(R&E), on the future of defense innovation. Welby addressed the second Army Innovation Summit, held at Aberdeen Proving Ground, Maryland. The summit is a series of quarterly forums organized by the U.S. Army Materiel Command (AMC) to bring together major players to discuss barriers to innovation and ways to surmount them.

Welby compared the present day with the early 1980s, when the U.S. military broke new ground in precision weapons, coupled with long-range intelligence, surveillance and reconnaissance; stealth; and complex global battle networks. The U.S. was the only country to have all those capabilities, he noted.

"We have had a remarkable advantage, from a historical perspective, over the last 40 years," Welby said, "but that asymmetry … is over." The pipeline of cutting-edge capabilities has slowed, he noted, which concerns defense and industry leaders alike.

"I feel uncomfortable when our senior leadership in the department, [in] the Army, on the Hill, [have] told us we're behind, told us we're challenged. And I think that should make you uncomfortable," said Welby, who is DOD's chief technology officer and the principal adviser to Defense Secretary Ash Carter on matters relating to science, technology, research and engineering.

As the ASD(R&E), he looks at global intelligence reports every morning. "I have looked up my counterparts around the world. I wonder what the technology leaders in those [countries] that do not wish us well are doing at their desks every morning, and quite frankly, I think they've got an easier job than we do. I see significant challenges that we face in terms of preparing for the future."

During the past 15 years of intense conflict in Southwest Asia, with a focus on counterinsurgency and anti-terrorism, "we have not spent as much time as we should have living in the future, thinking longer term and thinking about the threat, thinking about how the threat pictures us, thinking about how the threat thinks about our vulnerabilities," Welby told the audience.

Given the unrelenting pace of change over the last two decades--in technology, in business, in organizations, in the globalization of talent and technology, in shifting global supply chains, in the nature of the future threat--"it's critical … that we are thinking about our response to that kind of threat. And as I look across the department, quite frankly, the place where I see the greatest challenge is in the United States Army. It's an institution that I deeply love, but I'm very concerned that we need to be thinking much more about how we prepare for future threats and how we create the opportunities to ensure that we'll have the decisive advantage."

That will require fundamental changes in thinking, and not just in the Army, said Welby. It will require more than multiple initiatives called "innovation," which he acknowledged is "a big buzzword" in the federal government these days.

"Innovation is about change," he told the summit audience. The Better Buying Power (BBP) initiative is an important part of it, he added, as it frees up resources to make it possible to explore more capabilities. (See Figure 4.)

"I'm very encouraged that we're meeting here today. I encourage you not to be simply thinking about preparing material to support Innovation Summit 3 but that you're thinking about things that you can do to help change what you're doing today."

TARGETING CHANGE

The concept of change itself covers an even wider universe than innovation, and it poses a much bigger challenge for institutions as big and complex as DOD, the defense industry, Congress and segments of academia with long-standing ties to DOD. Leaders in DOD, industry and academia agree that a cultural change is necessary in the defense world to create the freedom to innovate. While BBP has made some inroads to changing the way people think about acquisition, culture change within DOD or any of its institutional stakeholders may be significantly more difficult than innovation.

From Welby's perspective, DOD needs to "regrow some of the muscle tone that we had" during the global competition of the Cold War era, shaping future efforts to best our potential military adversaries so as to create a long-term, disruptive, i.e., game-changing advantage for the United States.

In an interview with Army AL&T, the Hon. Jacques S. Gansler, former undersecretary of defense for acquisition, technology and logistics and now chairman and CEO of the ARGIS Group (Analytical Research for Government and Industry Solutions), pointed out a number of areas where the U.S. military is no longer ahead:

Night vision. The French have captured the world market in part because France does not restrict the export of night vision devices (as the U.S. does), and it has reinvested the earnings from international sales to advance the technology.

Supercomputing. The Chinese have the world's leading supercomputer; it was developed by the National University of Defense Technology, run by the People's Liberation Army. It is worth noting, Gansler said, that a large percentage of the parts come from U.S. manufacturers.

Vehicle armor. Israel leads in this area, as the U.S. military has found in seeking to armor the next generation of infantry fighting vehicles. With encouragement from U.S. military leaders, Plasan North America--a branch of an Israeli company--now operates a factory in Michigan, satisfying the congressional mandate that DOD "buy American." Gansler is on Plasan North America's board of directors.

Other countries are also pushing for innovation, Gansler noted--among them China, India, Israel and Singapore--primarily with a "top-down," government-driven approach.

The United States can and should take maximum advantage of innovative technologies and processes developed by U.S. industry and allies and, in some cases, by U.S. industry for allied nations, Gansler said, citing the United Kingdom's adaptation of global commercial logistical systems to improve its military supply chains. Even innovations in processes can prove to be disruptive, he said.

DISRUPTIVE VS. INCREMENTAL

Yet disruptive technologies, by definition, are not initially welcomed by large institutions like the big defense contractors or the DOD acquisition system, Gansler noted.

Drawing a sharp distinction between large and small companies, he observed that large corporations have a strong tendency to discourage disruptive innovation in favor of incremental innovation that is consistent with what they're accustomed to producing. "That's why so many innovations come from small business," Gansler said, "because people are trying to build a business." It's the difference between making "a little bit better widget each time" and asking, "Why do we need widgets?" and replacing them with something completely new and different.

"That kind of [disruptive] innovation is what makes a big difference in warfare, and certainly it makes a big difference commercially. It may start up a whole new industry," Gansler said. "That's got to be encouraged, and it's actually discouraged in both large organizations and in many cases by the military because it's disruptive."

In fact, "most innovations today come from small businesses," Gansler said, citing the 2015 findings of a committee he chaired of the National Academies of Sciences, Engineering and Medicine. The Committee on Capitalizing on Science, Technology and Innovation, which reviewed the Small Business Innovation Research (SBIR) and Small Business Technology Transfer programs at DOD, NASA, the National Institutes of Health, the U.S. Department of Energy and the National Science Foundation, concluded that SBIR remains the single largest innovation program for small business. (See Figure 2.)

Another institution that has proven resistant to innovation and change is Congress, Gansler said. The Code of Federal Regulations, which controls what the government can buy, and by what means and method, "is now up to 186,000 pages," with over 2,000 pages added every year. It is full of regulations that slow down the application of effective, affordable commercial equipment to military systems and significantly raise the prices, Gansler said. Congress needs to review all 186,000 pages, drop the obsolete ones, and revise those that are expensive and unneeded; it's considering a step in that direction, he said.

NEW TALENT, NEW IDEAS

At the Innovation Summit, Welby noted that regaining superiority by creating strategic challenges for adversaries is going to require more talent, with a greater diversity of expertise, coupled with a faster response to innovative possibilities. The idea is to "open the aperture," as he put it, to expand on the talents of over 113,000 scientists and engineers working for DOD by engaging in new ways with academia and industry, even--especially--sectors of industry that traditionally have not associated with DOD, such as the tech companies of Silicon Valley.

Welby remarked that, on a recent visit to Silicon Valley, a host company asked him not to sign the visitors book in the lobby. Puzzled, he asked why and learned that his host did not want potential investors to see that the company was talking with DOD. An April 22 article on DefenseOne.com demonstrated why, noting that "CEOs said the sluggish pace of Pentagon contracting is preventing commercial tech firms from responding to the entreaties of Defense Secretary Ash Carter and other DOD players. Prime contracting processes can take a decade, far longer than Silicon Valley investors are willing to wait for a return on their investment."

Which is why it's imperative to speed up the notoriously slow DOD procurement machine to take advantage of innovative, strategically important opportunities before they disappear, Welby said.

"We can't afford 10-year programs," Welby continued. Instead, DOD needs to do more prototyping of potential solutions, "making small bets" to get a head start on the technology, even though they may be small, incremental or, ultimately, false starts. "I've never seen a surfer surf a wave from behind," he remarked. (See Figure 1.)

The Pentagon is looking hard at contracting timelines, he added, noting that DOD has talked to some angel investors--affluent individuals who provide startup capital, usually in exchange for ownership equity--and found that they work in six-month time frames; that's how long a product has to prove viability. "That's the horizon, not a 30-year horizon," Welby said.

Pervading all of these considerations is the central theme of affordability, he said, both in good stewardship of taxpayer money and in "how we prove the effectiveness of everything we do" across the life cycle, from conceptualization through delivery and exercise to disposal. "That efficiency allows us to do more … to free up resources to allow us to create those options."

CULTURE SHOCKS

To bridge the biggest gap with industry, the one that has Silicon Valley companies viewing DOD as potentially toxic to business, the department has developed a cultural exchange, so to speak, whereby DOD assigns military officers and senior civilians to work for a while in Silicon Valley because, Welby said, "We need folks who speak DOD and speak Valley." Conversely, DOD has had early success in bringing into the Pentagon tech executives who have left one company or venture and not yet started with another.

Carter wants to "drill tunnels through the walls of the five-sided building," Welby said, to establish a "permeability" whereby new ideas can move more freely between the defense community on the one side and industry and academia on the other.

After more than 30 years working in S&T, including the defense aerospace, automotive and energy industries, James S. Chew is not surprised at the reluctance of Silicon Valley entrepreneurs to work with DOD. Chew, who for the past eight years has chaired the Science & Engineering Technology Division of the National Defense Industrial Association, specializes in product development, operations and marketing and is currently director of strategic development for a top-50 defense contractor. He spoke with Army AL&T as someone with experience in the defense industry, specifically S&T, not as a representative of either the association or his company.

"I get my thrill out of developing new technologies and demonstrating what is the state of the art," Chew said, "what is now possible because of clever people in technology [and] clever people who figure out how to design and integrate these new technologies to really do what I call 'delight' people, meaning we're now doing stuff that people didn't know they needed until they saw it, and now that they see it, they can't live without it."

Even established defense contractors have grown alienated from the Pentagon, he said, in part because of laws that have created institutional fences between government and industry. As a result, "Instead of us knowing what each other wants, we've got this mutual distrust of each other, and that's why you're seeing this lack of innovation," he said. "You've got companies saying they're not going to do anything unless they see a requirement, and you've got the department saying, 'I need to understand what you're doing in IR&D because I don't think you're doing what needs to be done.'

"[This] is why you're seeing a lack of Silicon Valley companies actually wanting to jump in, because of all the rigors of working on defense contracts, which is frankly kind of silly."

Chew added that "Congress needs to step up" as well. Legislators waste considerable time, both on Capitol Hill and in DOD, on numerous reports mandated many years ago that are now of questionable value, he said. "Nobody has had the courage in Congress to say that any reporting requirement that's over four years old, unless specifically required by Congress, will be rescinded." More broadly, he said, instead of criticizing what they call wasteful spending by DOD and the defense industry, "I just don't see too many members of Congress--and frankly I wonder how many of them have business experience or industry experience--coming to the table … and saying, 'We've got to work with these guys [DOD and the defense industry].' "

Chew cited the F-22 Raptor fighter jet as an example of a defense acquisition program fraught with the kind of indecision and unpredictability that discourages innovators from entering the defense market. When the Air Force developed a requirement for the stealthy fifth-generation fighter jet in the early 1980s, it was for 381 aircraft. The total requirement was for 749. But the last F-22 was produced in 2009, for a total 187 aircraft. Now a House Armed Services subcommittee wants the Air Force to explore restarting production "in light of growing threats to U.S. air superiority as a result of adversaries closing the technology gap and increasing demand from allies and partners for high-performance, multirole aircraft," according to language in the committee's report accompanying the House-passed H.R. 4909, the National Defense Authorization Act for Fiscal Year 2017.

"That's the type of wackiness that any sound businessman would look at and say, 'Why do I even want to think about going into that kind of a market?' " Chew said.

GETTING BACK TO BUILDING

Ultimately, Chew believes that the best way for DOD and the services to spark innovative solutions is to direct innovation by building materiel. Industry needs predictability, a regular workflow to keep assembly lines going, he said. "We're not building anything. We're not at war, where we have an immediate need to transition certain types of technologies. People forget that if it wasn't for NASA, we wouldn't have Velcro. … When there's a need for the industry and [DOD] to be innovative, despite all the problems they have--the inefficient bureaucracy, the shortsighted companies--when they need to step up, they step up. The problem is that the occasions to step up are few and far between."

The Information Technology & Innovation Foundation details the recent drop in industry IR&D spending in its 2014 report. The report, by Dr. Dan Steinbock, noted that, in 1999, the combined spending of Boeing's defense unit, L-3 Communications, Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co. was $2.4 billion on R&D, which represented 3.3 percent of sales. By 2012, combined sales had more than doubled, while the combined R&D expenditures grew by about one-half, causing the R&D share to fall to 2.3 percent of sales. In 2013, this ratio ranged from about 1.3 percent to 3.6 percent among the five large defense companies.

This percentage decline, while not dramatic, is in sharp contrast with the commercial technology sector. In 2012, the same five large defense companies spent a total of $5.1 billion on R&D projects, whereas five leading U.S. technology companies--Microsoft Corp., Intel Corp., Google Inc., Cisco Systems Inc. and IBM--invested almost $38 billion in R&D during the same period, representing 5.3 percent to 19 percent of their sales.

Steinbock said that one reason that defense companies may be spending less on IR&D is to keep expenses down and present more attractive bids for DOD contracts, in line with changes in Pentagon procurement policy that give greater emphasis to lower-cost procurement, particularly to source selection concepts such as "lowest price technically acceptable."

"R&D expenditures in the commercial technology sector can and do lead to significantly increased revenues from growing markets." In contrast, Steinbock said, "in an era of declining defense procurement, R&D expenditures for defense at best let a firm get a slightly larger slice of a smaller pie--hardly a compelling proposition for shareholders."

"We still are operating in a defense industrial world that's based on the '50s and the Cold War, where we had one common enemy, and that enemy had one common enemy, and we kind of knew what needed to be done," Chew said. Since then, like the U.S. automotive industry in the 1980s, the defense industry has lost its bearings, and "they don't really know what to invest in." Meanwhile, defense companies "are doing everything that they can to squeeze the last dollar out of their existing product line. [They've] got to fill [their] assembly lines, at the end of the day."

"When was the last time the Army or [DOD] really built a new platform? You can pretty much trace when we started running into problems to when we 'won' the Cold War and we stopped building things," Chew said. Previously, "Every time you designed a main battle tank, you knew there was another main battle tank on the drawing boards right after that, and the same with the Air Force: Every time you designed a new fighter, you knew there was a new fighter on the drawing boards after that. In the Navy, every time you designed a new surface vessel, you knew there was one after that.

"That's why it's so important to build stuff. You have to keep people active. There's no such thing as a technology faucet; you just can't turn it on, and there it is. There's also no such thing as an acquisition or design faucet. Look at what happened when we stopped developing rotary-wing aircraft," Chew said. With respect to rotary-wing innovation, he explained, "You see the commercial guys absolutely cleaning the department's clock."

Even the development of the Future Vertical Lift (FVL) program appears to be a shortsighted solution, Chew said. (See "A Big Lift,".) The notion that the aircraft will have to be designed to last 30 years with incremental improvements because the Army probably won't build a new rotary aircraft in that time frame flies in the face of innovation, he said. "Can you imagine if Apple actually had that philosophy on the iPhone? 'This is going to be the last iPhone that people are ever going to want to buy, so it's got to last 30 years.' [Apple would] never get anything out."

In the same vein, DOD should focus on awarding valuable R&D projects to companies that can produce something from the R&D, not organizations such as big laboratories or universities that don't make anything, Chew said. "If you really want to have innovation in the industrial base, then focus on the industrial base." Awarding contracts to entities that don't have a manufacturing base is a recipe for "unbuildable systems that don't transition," said Chew.

Overall, Chew is skeptical about the substantive benefits of DOD's innovation push. "When you start dictating innovation, that's like dictating creativity. If you really have to talk about innovation, you have to ask yourself, what are you really doing?" he said. But he applauded DOD's push for more prototyping and experimentation of emerging capabilities, specifically the Office of the Deputy Assistant Secretary of Defense for Emerging Capability & Prototyping, under the ASD(R&E): "Give me your idea and let's see what we can do with it," as Chew put it.

Even with that commitment to innovation, Chew said industry is likely to approach warily, "because again, a lot of stuff that you do with the science and technology and advanced concepts in the prototyping world is, frankly, knocking current rice bowls. Nobody likes that."

He also sees promise in defense-industry exchanges to broaden each side's understanding of how the other works and how they could work better together.

SEEKING SOLUTIONS

The innovation "buzz" is clearly a lot louder now than when it began in the early part of this decade with the Defense Innovation Marketplace, which opened at http://www.defense

innovationmarketplace.mil/ in January 2012. The marketplace has produced concrete results by providing a secure portal where industry can learn about DOD investment priorities and technology requirements, and DOD can get the word out about current and future S&T and R&D priorities, events, presentations and solicitations to meet the warfighter's needs.

The marketplace provides the knowledge for industry to direct limited IR&D funds to areas with, at least theoretically, the greatest potential to produce a payoff in the form of a contract, and DOD gains insight into industry IR&D investments that can help S&T and acquisition personnel plan programs better.

Since the portal opened, more than 120 organizations have submitted more than 18,000 IR&D efforts.

"Innovation does not only take place in Army labs," said Dr. Thomas Russell, acting deputy assistant secretary of the Army for research and technology (DASA(R&T)). "The Army S&T enterprise engages industry to identify potential technology solutions to Army problems and capability challenges through stronger partnerships.

"Collaboration with industry is essential to guarantee success of the Army's most important acquisition programs," he said. "The Army invests its limited S&T dollars in finite, Army-specific areas, while leveraging heavily innovations from industry and other partners wherever possible."

Among the Army's more recent undertakings to collaborate more closely with academia and industry toward innovative solutions for the warfighter is the Open Campus, launched in 2014 by the U.S. Army Research Laboratory (ARL), a subordinate unit of AMC. (See "Then & Now," Page 176.) ARL "established a business model to encourage the synergy of the university/industry/government lab triad that is critical to the discovery, innovation and transition of science and technology important to the Army," said Russell, the director of ARL before his assignment in April as acting DASA(R&T).

At the DOD level, probably the boldest undertaking to cultivate private-sector innovators is DIUx, the Defense Innovation Unit -- Experimental, a three-year pilot project that opened an outpost in Silicon Valley in summer 2015 to connect U.S. military representatives working on high-priority national security challenges and companies operating at the cutting edge of technology. DIUx 2.0 launched in May with Carter's announcement of structural and operational improvements and plans to open an office in Boston. DOD leaders have described the overall effort as an experiment in building bridges where none had existed. In the process, the Pentagon hopes to learn how best to identify, contract and prototype novel innovations by nontraditional sources.

At the Innovation Summit, Welby also spoke of the need for large-scale military experimentation to prove innovative solutions against a backdrop of current strategy and doctrine and to see if new TTPs are necessary to make the solutions work for the warfighter.

The Army is also seeking less tangible progress toward innovation through the quarterly summits sponsored by AMC as part of the larger Army Innovation Campaign, with a concerted emphasis on unifying multiple major players behind a common vision of what the Army needs to do to foster a culture of change.

The first two summits involved Army organizations-- including AMC, the U.S. Army Training and Doctrine Command, U.S. Forces Command, the Office of the Assistant Secretary of the Army for Acquisition, Logistics and Technology, HQDA General Staff and the U.S. Army Corps of Engineers. "The fact that you have the agencies together at the same time, working together, I think that can kick us forward and propel us to be more effective and efficient," said Patrick O'Neill, AMC chief technology officer.

Participation has grown from 115 attendees at the inaugural summit in November 2015 to 144 at the second summit in April. The next summit, in August, will bring industry and academia into the discussion as well, O'Neill said. "The whole idea is, [innovation] is a process that needs to start and continue … you can just never stop. That's why this is a campaign. It's really pushing to do the right thing and live up to what the chief of staff has to do as far as readiness and the future Army."

"The quarterly innovation summit program is a core component of the Army's Innovation Campaign and an important medium for Army senior leader discussions," said Maj. Gen. John F. Wharton, commanding general of the U.S. Army Research, Development and Engineering Command, which hosted the second summit. "This is an opportunity to build upon the knowledge and insight gained during the first summit and discover new opportunities to refine solutions that will enhance Army innovation."

CONCLUSION

Notwithstanding the funding, cultural, regulatory and procedural barriers to innovation, there is reason to be optimistic that the current push for innovation will produce results for the warfighter. "The appetite from senior leadership is enormous," Welby told participants at the Innovation Summit. "We're not innovating because it's the cool thing. We're innovating because it's critical to our future."

The question is whether the results will make a substantive difference in the United States' technological status.

"The government needs to think about--and the person trying to sell the government needs to think about--what application these ideas will have, if it can really make an incremental change at an affordable price," Gansler said. That will take collaboration among the requirements, budgeting and contracting communities--as well as with industry--to think ahead. "We need to know what options we have, what are the things we could have or the things that other people are doing and how it would make any difference in defense," he said.

The government also needs to be careful not to spread its diminished resources too thin, in Chew's opinion. "I think that these initiatives, if they were aimed at, 'We're going to do this instead of that,' then they would do something. Instead, I see a lot of, 'We're going to do this in addition to what [else] we're doing.' And that's a problem.

"Despite all these obstacles, we haven't been doing badly," said Chew, who has great faith in American ingenuity. "I do believe in American exceptionalism," he explained, and "one of our 'exceptions' as Americans is our ingenuity. We don't overthink a problem. We see a problem, and we get it done. We don't see obstacles. We see an opportunity."

Chew sees an opportunity for DOD to take a clean-slate approach to its S&T endeavors by challenging vested interests--for example, he said, by unifying each of the services' separate laboratory systems into one "purple," or joint system. "Purple labs. Now that's innovation. You know, you'd get a lot of action [with] purple labs. Not Air Force labs, or Army labs, but OSD [Office of the Secretary of Defense] labs.

"And then you need to encourage the industrial base and say, 'Look, we really are trying to innovate.' "

For more information on DOD S&T resources, go to http://www.acq.osd.mil/chieftechnologist/index.html; for more on DIUx, go to http://www.diux.mil/; and on the Army Innovation Campaign, https://www.army.mil/article/151556/.

This article was originally published in the July - September 2016 issue of Army AL&T magazine.

Related Links:

U.S. Army Acquisition Support Center

Army AL&T Magazine

DOD Research and Engineering Enterprise

Defense Innovation Unit Experiment

Army Innovation Campaign

USAASC Flickr July - September 2016 Army AL&T Magazine