Aligning Defense Products to National Security Space Needs

Abstract

The U.S. defense acquisition system has struggled to keep pace with security threats and rapid technology change, despite decades of reform efforts to integrate commercial innovation in military systems. Traditional acquisition approaches with long development timelines tied to predetermined and static system requirements do not meet the urgency or speed that military leaders and political decision-makers demand. Powered by software-driven business models and private capital, a cohort of defense tech companies have developed new approaches to meet both military and commercial needs with dual-use products. However, military users will always require a set of capabilities that differ in important and substantive ways from what the commercial market is able to deliver. This gap has contributed to a small but important new segment of the defense industrial base, companies that self-fund development of military-specific systems and capabilities in anticipation of government demand and funding. If the U.S. Space Force correctly signals its future demand and adapts its processes to incentivize this approach, these defense product companies could play an important role in delivering future warfighting capabilities. This paper explores the factors that contributed to the emergence of defense product companies and some of the challenges and opportunities to scale this model.