The Defense Innovation Unit Experimental — the Pentagon’s signature effort to engage commercial technology startups ― is primed to go global. In fact, DIUx could become a key platform by which the United States and its allies and partners come together to address shared military challenges ― if its next managing director and supporters in the Pentagon and Congress are prepared to seize the moment.

Launched in 2015, DIUx reflected a growing realization that the U.S. military needs to more effectively leverage innovations developed in the commercial technology sector. Intended as a workaround to a sclerotic defense acquisitions process, DIUx came to rely on an obscure contracting authority to rapidly award prototype projects to innovative companies ― a welcome change to the Pentagon business models that never managed to align with the technology industry’s far faster pace.

By the end of the Obama administration, DIUx had expanded beyond Silicon Valley to two other U.S. innovation hubs — Boston and Austin.

Growth gave way to uncertainty following the 2016 presidential election, with observers questioning whether the new team would support DIUx, and Congress moving to restrict its access to funding. Since then, however, DIUx has won the support of key stakeholders. Secretary of Defense Jim Mattis visited DIUx in mid-2017 and offered an unequivocal endorsement of its mission to “accelerate commercial innovation to the war fighter.” Michael Griffin, the new undersecretary of defense for research and engineering, has also expressed backing for DIUx, which falls within his portfolio.

Defense Secretary Jim Mattis, left, speaks with Raj Shah while he was the head of DIUx. (Staff Sgt. Jette Carr/U.S. Defense Department)
Defense Secretary Jim Mattis, left, speaks with Raj Shah while he was the head of DIUx. (Staff Sgt. Jette Carr/U.S. Defense Department)

Congress has warmed somewhat to DIUx, though whether it will fund the White House’s requested plus-up remains uncertain. And DIUx has demonstrated its ability to do more than fund prototypes ― transitioning two projects into production contracts by the end of 2017.

Engaging commercial technology companies in the United States will ― and should ― remain the primary focus of the next DIUx managing director. However, with DIUx now on more solid political and bureaucratic footing, there is a unique opportunity to broaden its horizons.

Taking DIUx global could deliver multiple advantages. U.S. commercial technology companies do not hold a monopoly on innovations relevant to solving vexing military challenges. For example, Israel is a leading global provider of counter-drone solutions. A more internationally oriented DIUx could improve the U.S. military’s access to technologies generated by companies located on the soil of its allies and partners, and simultaneously enable their governments to more effectively harvest U.S. commercial technologies for national defense needs.

Many U.S. allies and partners would welcome the opportunity to plug into DIUx, given the diverse threats they confront ― from rising regional powers to terrorist networks ― and constraints on the resources they can dedicate to defense. At the political level, cooperation around DIUx could help strengthen America’s alliances and partnerships at a time of uncertainty, while also bolstering future military interoperability.

Looking ahead, the United States will need to identify new and innovative ways to share the burden with its allies and partners to maintain its technological advantage. Although the Pentagon will see a budget increase over the next two years, without legislative action, mandated budget cuts will return in 2020. A more internationally oriented DIUx could help to spread the costs of research and development. Over the long term, it could even evolve into the cornerstone of a commercial innovation-oriented defense technology network spanning the United States and its allies and partners.

DIUx director talks innovation and adapting new technology

Raj Shah, here as the managing director of DIUx, says companies will continue to develop technology, and so the Pentagon should get onboard with industry.

With traditional forms of security cooperation like large-scale research and development projects and foreign military sales failing to keep pace with a rapidly evolving threat environment, such a network could enable the United States and its allies and partners to more effectively address shared national security challenges.

DIUx has taken limited steps to engage U.S. allies and partners. On the government side, these include welcoming a United Kingdom liaison officer and, reportedly, plans to host an Indian military representative. DIUx has also worked with a handful of foreign commercial technology firms.

Yet, beyond these initial steps, significant opportunity exists. To take DIUx global, the next managing director could pursue multiple, mutually reinforcing options.

The easiest would be for personnel from DIUx and the military services to conduct a series of roadshows to U.S. allies and partners. These roadshows would serve a dual purpose: to showcase the portfolio of U.S. firms that work with DIUx and to raise the awareness of DIUx among overseas companies that typically do not consider the Pentagon as a potential customer.

A second option would be to establish offices overseas in order to embed DIUx in key ally and partner innovation hubs. These offices could take various forms ― from a handful of DIUx personnel based in a U.S. embassy to a bilaterally staffed organization funded in part by the host nation.

DIUx offices overseas could function as points of coordination across U.S. alliances and partnerships, supporting efforts like the “Five Eyes” Technical Cooperation Program, but focus on technologies emerging out of the commercial sector in addition to national laboratories. Some key considerations for selecting a location would include a high density of companies working on cutting-edge technologies with national security relevance; commitment by ally and partner militaries to leverage technology developed in the commercial sector; and willingness of ally and partner governments to put up resources.

A third option would be to launch dedicated funds under DIUx with financing contributed from both the United States and its allies and partners to solve joint challenges. Each fund would focus on awarding prototype projects to companies with potential solutions to the challenge identified. This option would allow the United States and its allies and partners to share defense resources; provide more revenue to national security-relevant startups than the Pentagon could on its own; and build interoperability up front. A clear area for such a fund would be low-cost intelligence, surveillance and reconnaissance coverage over a vast maritime area ― a challenge that has long bedeviled the United States and Australia in the Indo-Pacific region.

The next managing director of DIUx will have an unparalleled opportunity to take it global. But she or he will need a mandate to do so ― ideally from the secretary of defense. With that mandate, the next managing director should quickly move to advance an ambitious agenda for involving allies and partners more closely in the work of DIUx. Announcing that DIUx will open an office overseas within a year would, in particular, galvanize ally and partner interest.

Daniel Kliman is a senior fellow at the Center for a New American Security. He previously served at the U.S. Defense Department. Brendan Thomas-Noone is a research fellow at the United States Studies Centre at the University of Sydney.