Seven months after the sequester ax fell, most Americans say they haven’t felt an impact on their everyday lives, according to a Gallup poll. However, those of us who work with government agencies and the day-in and day-out realities of the drastic measure are not only feeling the impact, but also starting to see the accumulation of damage.
In the defense industry, work requests have been delayed, contracts and programs have been put on hold, and the demand for “new” innovation, which often comes from smaller firms, has stalled.
While a hit on innovation was expected, I’m not sure anyone realized how rapid and how deep the impact could be.
This hit home for me at a recent symposium on handheld devices. A Marine captain was speaking about sequester effects and said that if his troops need a map today, they get a paper map that they are “able to get by with.” That stunned me. In today’s constantly shifting logistical and tactical landscape, troops should have advanced digital capabilities that include not only a digital map, but software that enables individual movement and provides real-time details on enemy positions and movements.
Defense Secretary Chuck Hagel recently warned that if sequestration is left in effect, it will necessitate either fewer troops or less technology. A potential technology drought, where innovation stops and the best talent heads to the private sector, could lead to us losing our leadership advantage or worse.
The domino effect doesn’t stop at innovation, of course. Government furloughs, for instance, are impacting decision making. When people work 20 percent fewer hours, that means less time to get their jobs done and even less time to consider innovative solutions from smaller firms.
And then there are the mandated budget cuts. Those initial big budget slashes that instantly sliced a set percentage, whether that was 20 percent or 50 percent, were supposed to be direct cuts to an agency’s overall budget. However, because the cuts were instituted midyear, the “real” budget numbers are constantly changing. To deal with that uncertainty, many people are underspending. That creates another looming problem: Agencies with “leftover” money at the end of the year will have to allocate rapidly and likely just dump that into existing solutions rather than advancing new technologies.
What has emerged is a Rube Goldberg machine of inefficiency. Does that mean defense technology will stall and falter? I’m not that pessimistic, but at Thermopylae, we are also working to make sure it doesn’t happen and can offer some advice to other tech firms in the defense sector:
■Double down on private sector work. Along with existing clients such as Google, we’ve added companies like Procter & Gamble and NBC Universal to our roster. We innovate on their behalf, while also keeping an eye out for potential crossover to the government sector. For the budget-conscious government agencies, proven private sector technology could save money and keep them up to date.
■Beat the drum to the government sector. It’s not enough to innovate technologies on behalf of private sector companies; you’ve also got to take those technologies to government agencies and show how those breakthroughs can work for them.
■Give government agencies with similar goals a nudge toward each other. Show them common denominator capabilities and cross-pollinate them. Encourage them to combine trimmed budgets to create consolidated buying power.
■Keep hiring the best and brightest. It may be up to the small firms that work in defense to keep the young and ambitious tied to the government sector. Young people want a job with challenges, but they also want a job that allows them to serve the greater good.
I know some of my concerns sound extreme, but I also have reason to believe that we can weather the sequester and the long-term downturn in defense spending. Creativity, innovation and quality talent, along with a healthy dose of realistic planning, will serve smaller firms, and ultimately our private sector companies and government agency clients, by combining the best of both worlds.
A.J. Clark, CEO of Thermopylae Sciences and Technology, an Arlington, Va., company that offers Web-based geospatial capabilities, mobile software framework and applications, situational awareness, cybersecurity and cloud computing.