As R&D dollars shift to the private sector, federal agencies and systems integrators alike look to partner with emerging tech firms to catch those critical sparks of innovation.
During a majority of our conversations with industry executives, the concept of a federal IT systems integrator having to build and cultivate a network of technology partners outside of what was once a traditional ecosystem inevitably comes up.
In fact, most of the leaders at integrators we speak with mention how government agencies themselves are the ones driving that push to bring innovation in from the outside -- not just Silicon Valley but other tech hubs like Boston, Denver and Austin, Texas.
Take for instance how Dawn Meyerreicks, CIA deputy director for science and technology, kicked off an event Tuesday in Washington, D.C. hosted by General Dynamics’ IT services segment.
Her reference to publicly-available data on the changing nature of research-and-development spending in the U.S (that is not the chart she used but still applicable) might help get the point across that the pyramid of innovation has flipped.
“Look at the shift and tell me where our R&D dollars come from… it’s mostly from commercial and an ever-decreasing percentage from the U.S. (government),” Meyerriecks said. “So if we’re not leveraging those trends collectively, then we’re not actually addressing mission as we should.”
The CIA and other intelligence agencies reach out to emerging technology companies through In-Q-Tel, the IC’s venture capital arm that invests in startups with emerging tools agencies see as promising.
IQT is one model of what many in industry call the “tech scouting” approach. Large defense contractors like Boeing, Lockheed Martin and Raytheon have used the venture investment method as one tool in the toolbox as part of their search for innovations outside of themselves.
Many systems integrators such as GDIT and Raytheon too have embraced the partnership model as part of their tech scouting approach through not just attending trade shows to see what new innovations are out there but continual dialogue with VC firms and incubators in the startup scene.
The same paradigm shift of R&D spending at agencies is reflected in how integrators work with agencies, as described to a reporter roundtable Tuesday by GDIT Chief Technology Officer Yogesh Khanna.
“Gone are the days where large companies on their own would have a nontrivial budget to do R&D and it was all to drive innovation,” Khanna said. “I don’t think there’s an amount of money that I can ask for, and even if you had deep, deep pockets, that wouldn’t do justice to our client base to do innovation.
“Why would I spend tens of millions or even hundreds of millions in innovation, when I can literally leverage billions of dollars of innovation that’s happening in the industry,” he said.
For GDIT’s part, Khanna said they have a “very small team” whose primary job is to build relationships with VC firms. GDIT also has between 50 and 75 companies always on their radar as potential partners, he said.
Through new organizations like the Defense Innovation Unit and others, the Defense Department and other agencies have taken on the tech scouting mission themselves as well. But the role of integrators is to make sure agencies have their bases covered, according to GDIT Chief Information Officer Kristie Grinnell.
“The government doesn’t have the ability to go spend days and years in Silicon Valley, nor do they have the money to do that themselves,” Grinnell said. “Yet you have these new technologies that are coming out, these small startup companies that are saying ‘I have this really great technology, I just need a problem to solve with it.’”
As Grinnell hinted there, technology previously did not hit the market until it had a problem to solve but that pyramid has flipped as well, in that the tools themselves come out first.
“With the partnership that we have with all of this vendor ecosystem and us having that understanding of those specific problems we’re trying to solve, we can help match that,” Grinnell said.
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