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How 2 Key Government Innovators are Bridging the ‘Valley of Death’

The private sector is known for its rapid technological innovation process unencumbered by bureaucracy, restrictive requirements or mysterious funding procedures. Unfortunately, these qualities have not typically described the innovation process within the U.S. federal government; but now, public sector leaders are taking a page from the commercial book and changing the narrative.

The “valley of death” has been a major focal point in the discussion on tech innovation in the government. This term refers to the phase in which startups get stuck between technology development and deployment, or more specifically, between a prototype and a contract with the Department of Defense. As this phase can often stretch to up to a few years, a technology can “die” at this stage for multiple reasons, including lack of funding, inability to scale technologies and more.

Here’s how two of the most consequential government innovators are working to bridge this chasm:

Heidi Shyu, undersecretary of defense for research and engineering and 2023 Wash100 Award winner, has made it her mission to tackle the valley of death issue. 

Join the conversation with Heidi Shyu at the Potomac Officers Club’s 9th Annual Defense R&D Summit on March 23. Don’t miss your chance to hear from top DOD officials, industry experts and thought leaders in person. Register here

In December 2022, the DOD stood up the Office of Strategic Capital, creating a vital connection between the department, companies developing critical technologies with national security applications and the capital to fund them. 

Shyu, who sits on the OSC’s advisory council, said “America’s strategic competitors are working to influence U.S. technological innovation to their advantage. OSC is part of a broader administration-wide effort to ‘crowd-in’ private capital in areas where our efforts can boost our future security and prosperity.”

The areas to which Shyu is referring can be found in her list of 14 critical technologies, which includes microelectronics, biotechnology, quantum, hypersonics and more.

The new DOD office’s objectives include increasing the funding available to companies developing these critical technologies, countering market actions by strategic competitors and scaling investments between federal science and technology-focused organizations and more commercially-oriented organizations.

Shyu is also a vocal supporter of the Rapid Defense Experimentation Reserve program, or RDER, which is a collaborative effort between military branches, industry, combatant commands and joint partners to get new technologies into the hands of warfighters more quickly.

Alongside Shyu in the fight to conquer the valley of death is Mike Madsen, acting director of the Defense Innovation Unit and fellow Wash100 awardee. 

The DIU’s mission is to accelerate DOD adoption of commercial technology for the U.S. military, and in 2022, the organization hit a new record of 17 total transitions. A major part of how DIU accomplishes this relies on other transaction authorities, which allows the organization to get prototypes built much more quickly than the typical DOD processes would.

“The core of DIU operations continues to be fueled by our Commercial Solutions Opening process leveraging the Other Transaction ‘OT’ authority, and a commitment to being a ‘fast follower’ of commercial technology,” said Madsen.

Shyu applauded DIU’s model in an address during the Reagan National Defense Forum in December.

“In terms of starting out looking at Silicon Valley and other innovative small companies, DIU certainly was on the forefront. Now, every single service has opened up their door to also look for innovative small-company solutions to solve their problems, so now we have an innovation ecosystem,” she said.

Hear from Heidi Shyu and Mike Madsen in person on March 23 at the Potomac Officers Club’s 9th Annual Defense R&D Summit. Thought leaders and experts from government and industry will convene to discuss the future of R&D in the U.S. during this can’t-miss event. Click here to learn more and register.

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