WASHINGTON — The Pentagon on Thursday established an office focused on driving private sector capital toward technology development to help the military services field innovative capabilities at a faster pace.

“As today private sector capital is the dominant funding resource for technology development, we can build enduring advantages through engagement with trusted capital that is focused on critical technology areas for the Department of Defense,” Defense Secretary Lloyd Austin said in a Dec. 1 memo.

The Office of Strategic Capital, or OSC, will be staffed and operational within 90 days and reside within the Pentagon’s chief technology office, led by Under Secretary of Defense for Research and Engineering Heidi Shyu. The OSC will identify “promising critical technology areas,” particularly those with national security applications, that have not received sufficient private sector investment, the memo said. It will then take the lead on drawing funding toward those areas.

The announcement follows Austin’s Oct. 17 meeting with the Defense Innovation Board, during which he called on the panel of business leaders to offer recommendations for how the Pentagon might take advantage for private sector investment in technology with national security applications.

DoD has long struggled to transition innovative technologies from commercial companies to users in the field. Officials refer to the often drawn-out phase between a program’s start and when it is adopted by a military service as the “valley of death.”

Pentagon Press Secretary Brig. Gen. Patrick Ryder told reporters OSC will help tackle that problem, working with investors and industry to secure the funding needed to keep high-need technology programs alive.

“It gives us another tool in the toolkit to be able to ensure that we can stay competitive against our strategic competitors like China and Russia,” he said. “This is really about looking at how can we move faster and ensure that the department and the U.S. government more broadly have the advanced technology and capabilities that we need to remain competitive.”

The director of the office, who was not named in the memo, will report to a Strategic Capital Advisory Council, which will include Shyu, the undersecretaries of defense for acquisition and policy, DoD’s comptroller and general counsel and the director of cost assessment and program evaluation.

“The director of the OSC will prepare and provide investment priorities in the form of an investment prospectus to the [council] for review and assessment before submitting to me for my approval,” according to the memo.

Courtney Albon is C4ISRNET’s space and emerging technology reporter. She has covered the U.S. military since 2012, with a focus on the Air Force and Space Force. She has reported on some of the Defense Department’s most significant acquisition, budget and policy challenges.

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