By: Christian Trotti and Julia Siegel

What is the kernel of the issue?

The pace of twenty-first century technological advancement is ramping up as smaller, more agile companies leverage creative business models to develop Fourth Industrial Revolution (4IR) technologies such as big data, 5G, and artificial intelligence. DoD must tap into this innovation to keep pace with competitors, but impediments including bureaucracy, funding instability, and long procurement timelines make the government an unattractive customer as tech startups look for avenues to scale up development.

Why is the issue important?

China’s aggressive Military-Civil Fusion strategy seeks to eliminate barriers between civilian research and its own military and defense-industrial sectors, allowing it to acquire modern dual-use capabilities more quickly. Speed is now the name of the game, and the United States must maintain its technological edge vis-à-vis a rising China or risk falling behind in the innovation race.

What is the recommendation?

The Biden administration should increase DoD funding for the Small Business Innovation Research (SBIR) and Small Business Technological Transfer (STTR) programs, which are competitive programs encouraging domestic small businesses to participate in federal R&D with the potential for commercialization. Funding should be allocated to increase the number of awarded grants and provide greater flexibility to smaller businesses as they innovate novel capabilities, thereby accelerating the pace of development from idea conception all the way to eventual DoD procurement.