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Defense Secretary Carter Makes Business Trip to Silicon Valley

By    |   Thursday, 23 April 2015 06:26 PM

The Pentagon is wooing Silicon Valley.

Ashton Carter's trip to the area this week – the first by a secretary of defense in 20 years – hopes to give the Pentagon a permanent presence in the Valley by committing to help fund promising ventures from tech startups and innovators who've so far shown little interest in working with Washington, National Defense magazine reports.

Carter was scheduled Thursday to speak at Stanford University, meet with Facebook Chief Operating Officer Sheryl Sandberg and join an executive roundtable hosted by the Andreessen Horowitz venture capital firm in Menlo Park, the magazine notes.

"The message to the Valley is that Defense will be pivoting toward the commercial sector as it seeks to equip the U.S. military with the most advanced technology," the magazine reports.

The move comes at a time when areas traditionally relegated to heavyweight defense contractors like Lockheed Martin, Raytheon and Boeing like satellite and drone development are being increasingly being handled by privately-held, venture-backed startups or by Google and Facebook, Tech Crunch reports.

According to National Defense, the Defense Department will have a permanent office in the Valley called "defense innovation unit X" – for experimental – that will be staffed by civilian and military officials, including reservists with private-sector experience.

Carter also is proposing a pilot program to invest in startup ventures and will make "small investments" in promising technologies in areas like electronics, software and automation, the magazine reports.

The Pentagon will work with Silicon Valley-based White House advisor Todd Park to create a defense-focused arm of the U.S. Digital Service, which was created last year after a team of technologists led by Park fixed the healthcare.gov website, the magazine reports.

But the outreach is getting mixed reaction.

"Ultimately, DoD will have to bargain a lot to induce the Valley to do business," Teka Thomas, a business lawyer who works with Bay Area entrepreneurs, told National Defense.

"But I think there are bargains to be had. All solutions will take a lot of legwork from the government."

The magazine notes one outcome of the initiative will likely be a push to integrate commercial innovation into weapons programs.

"The traditional separation of military industrial complex and private sector goods is fading rapidly," Jason Tama, a federal executive fellow at The Brookings Institution, told the magazine.

"The defense workforce is a huge issue," he tells the magazine. "The demographics are out of step with the rest of the economy and the tech sector."

Stan Soloway, president and CEO of the Professional Services Council, said Carter deserves praise for trying to broaden the market and motivate the defense industry to draw innovation from the commercial world.

But the Pentagon’s own actions are undermining that goal, he maintains. Soloway's association represents federal contractors.

"This is a fundamental problem. Even as Carter is trying to do this, actions being taken within DoD are making it harder for commercial capabilities to enter the market," Soloway tells the magazine. "As appealing as this might be to companies there that want to support the defense mission, they simply are not going to be able to do it."

Carter is "absolutely right to be trying to build alliances with Silicon Valley. That’s just one community of many where there’s a lot going on," he adds." But unless contracting barriers are lowered, he said, "I don’t think you can make a lot of progress."

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The Pentagon is wooing Silicon Valley.
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Thursday, 23 April 2015 06:26 PM
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