ARLINGTON, Va. — As it prepares to deliver its first investment strategy in the coming months, the Pentagon’s strategic capital office is conducting an in-depth review of the Defense Department’s key technology areas and how it can target early investments within those priorities.

The Office of Strategic Capital was established last December to help steer private sector funding toward the technologies and supply chains that are important to DoD. Jason Rathje, director of the fledgling office, said Sept. 6 that one of OSC’s first tasks from Defense Secretary Lloyd Austin was to develop a plan for investing in the 14 technology areas the Pentagon has deemed most critical.

“That has really been the focus of our office since we were established back last December,” Rathje said during the Defense News Conference in Arlington, Va. “The key is to build a framework that is repeatable and can be analyzed and refreshed every year as the world changes and we learn more about the technology and the capital.”

The Pentagon’s critical technologies include commercially available capabilities like artificial intelligence, space and integrated networks as well as deeper tech areas like quantum science, biotechnology and advanced materials — and OSC is interested in all of them.

The office’s approach to driving investment in those technologies is “leverage,” Rathje said. That means offering government-backed loan guarantees to capital providers — a practice that other federal agencies like the Department of Energy have used for years.

“There is so much capital available in the ecosystem, there’s a really efficient way to increase investment in these deep technology areas,” he said.

As it crafts its framework, OSC is prioritizing areas where it thinks these loans could have the most impact. At this point, Rathje said, those are primarily commercial technologies like semiconductors where DoD is just one of many users in a supply chain.

Once completed, OSC’s Strategic Advisory Council will review its investment plan. The panel — which is co-chaired by the undersecretaries of research and engineering and acquisition and sustainment — will evaluate the plan and consider how those priority technologies are being integrated into other DoD planning processes.

“As we learn more about what these technology areas can actually provide, even though they are commercially enabling technologies, those capabilities need to be included in requirements, planning decisions and programming decisions because we’ll learn more about what is available in the commercial market,” he said.

The advisory council will meet for the first time later this month. The focus of that meeting, Rathje said, will be on OSC’s early progress, its efforts to develop partnerships with other government agencies and ensuring it has the right governance and oversight structure to run loan programs.

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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