INNOVATION

Do you know what drives the next big thing?

Pierre Chao shares his thoughts on where future innovation will come from

When looking at today's market and trying to figure out where innovation will come from in the future, where do you begin?

This was the theme of the Fairfax County, Va., Chamber of Commerce 2013 GovCon Symposium that took place Tuesday morning.

Pierre Chao, managing partner at Enlightenment Capital and Renaissance Strategic Advisors, sat on one of the panels, and gave his views about future industry innovation.

He was asked what his expectations for change in the government contracting industry are, and what stability is going to look like in the new world.

But it isn’t stability that should be considered most here, Chao said. “Dynamism is actually what you’re looking for,” he said.

"There are so many trends in the industry that it’s important to set them into two categories,” Chao said; there are long-term, secular trends, and then there are cyclical trends.

“Innovation is tied to either one of these,” he added.

The long-term trends are things like moving to the cloud and cybersecurity—things that need to be considered and implemented now, and will not lose their importance, he said.

Another long-term trend that Chao mentioned was the aging of the federal workforce.

Five years from now, the government will have lost around half of its workforce, and “it is this room,” Chao said, referring to government contractors, “that is going to solve those problems.”

Going into cyclical trends, Chao said that the current time “smells and looks a lot like ’89 to ’91, that many of us lived through,” he said.

So, many contractors probably have a sense of what is going to happen, and what needs to be done.

For those that don’t, Chao said that his company did an analysis of the top 100 companies in the last downturn, potted their strategies, and were able to figure out the best and worst strategies for companies during such a downturn.

The worst, value-destructive strategy was, not surprisingly, to do nothing, with the second worst value-destructive strategy being doing something you didn’t know how to do.

“The strategy that created the most value, at that time, was the proactive strategy, which at that time was [mergers and acquisitions], and hence why we see [mergers and acquisitions] as part of the landscape,” Chao said.

And to the extent that mergers and acquisitions is somewhat constrained by government policy, innovation this time around will show up in business model innovation, Chao said, and it will be related to products.

He said he could trace the top 10 defense companies back to the 1930s, noting very little change at the top from that perspective.

“The only times when the industry changes are when new technology shows up,” he said.

Older defense companies are tied to the aircraft age, and the newer ones were tied to the technology age. “The next batch was services, and we can all try to imagine what’s going to be the next wave,” Chao said.

About the Author

Mark Hoover is a staff writer with Washington Technology. You can contact him at mhoover@washingtontechnology.com, or connect with him on Twitter at @mhooverWT.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close
SEARCH
contracts DB

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Read More

  • Is SBA MIA on contractor fraud? Nick Wakeman

    Editor Nick Wakeman explores the puzzle of why SBA has been so silent on the latest contractor fraud scandal when it has been so quick to act in other cases. Read More

Webcasts

  • How Do You Support the Project Lifecycle?

    How do best-in-class project-based companies create and actively mature successful organizations? They find the right mix of people, processes and tools that enable them to effectively manage the project lifecycle. REGISTER for this webinar to hear how properly managing the cycle of capture, bid, accounting, execution, IPM and analysis will allow you to better manage your programs to stay on scope, schedule and budget. Learn More!

  • Sequestration, LPTA and the Top 100

    Join Washington Technology’s Editor-in-Chief Nick Wakeman as he analyzes the annual Top 100 list and reveals critical insights into how market trends have impacted its composition. You'll learn what movements of individual companies means and how the market overall is being impacted by the current budget environment, how the Top 100 rankings reflect the major trends in the market today and how the biggest companies in the market are adapting to today’s competitive environment. Learn More!