ndupress.ndu.edu DH No. 81 1
I
n today’s knowledge-based global society, economic wealth, resources, infor-
mation, and power are widely distributed, contributing to the emergence of
new sources of disruptive innovation. While the importance of technology
to military competitiveness is a broadly accepted fact, the role that the Depart-
ment of Defense (DOD) plays in catalyzing the emergence of technology-based
products with broad social and economic impact is somewhat less recognized.
Enrico Moretti, Claudia Steinwender, and John Van Reenen identied a strong
correlation between defense research and development (R&D) investment and
private R&D outputs.
1
Moreover, many of the foundational general purpose
technologies that drive the global high-tech economy—such as interchangeable
parts and mass production, aircraft, nuclear energy, semiconductors, the Internet,
and space technology—are either direct oshoots of, or strongly linked to, mili-
tary procurement activities.
2
Mirko Draca attributed a sharp increase in U.S. cor-
porate research and development spending in the 1980s to high DOD technol-
ogy investment during the administration of President Ronald Reagan.
3
Draca
likewise showed a corresponding deceleration in private research and develop-
ment coincident with the post–Cold War defense drawdown under Presidents
George H.W. Bush and Bill Clinton. Eorts such as the Defense Innovation Ini-
tiative, launched in 2014 by then–Secretary of Defense Chuck Hagel, combined
with projected defense spending increases of $500 billion to $1 trillion in the
administration of President Donald Trump, will reinforce the positive correla-
tion between DOD and commercial high-tech industry and increasingly expose
Developing an Innovation-
Based Ecosystem at the U.S.
Department of Defense:
Challenges and Opportunities
by Adam Jay Harrison, Bharat Rao, and Bala Mulloth
DEFENSE HORIZONS
National Defense University
CENTER FOR TECHNOLOGY AND NATIONAL SECURITY POLICY
About the Authors
Adam Jay Harrison is a Visiting
Distinguished Research Fellow at
the National Defense University. Dr.
Bharat Rao is an Associate Profes-
sor at New York University. Dr. Bala
Mulloth is an Assistant Professor at
the University of Virginia.
Key Points
The U.S. Department of Defense
(DOD) is looking at new ways
to spur entrepreneurship and
innovation among its stakeholders
and related constituencies.
We recommend creating a platform
within the DOD focused on devel-
oping the Human and Relational
Capital components of the innova-
tion ecosystem such as the MD5
National Security Technology Ac-
celerator, an initiative that develops
innovators and human-centered
networks that create high-tech
“ventures” relevant to national
security.
The proposed ecosystem would not
only facilitate the development of
high-tech ventures in the national
security interest, but also educate
and build networks of innovators
and entrepreneurs, both inside
and outside of DOD, who would
be equipped with the incentives,
expertise, know-how, and resources
required to continuously develop,
commercialize, or apply technology
relevant to military needs.
A competency framework for
developing such an ecosystem that
would encourage venture-led, dual-
use products that provide a sustain-
able, competitive advantage for the
DOD and the national economy is
presented and discussed.
May 2017
