Defense innovation: Endemic problem or echo chamber of negativity?

• Author: Kenkel, John
• Position: Commentary

The defence sector has been considered to be at the forefront of innovation. Microwaves, GPS and the internet are just a few examples of technologies incubated in the defense sector prior to widespread commercialization.

This viewpoint has changed dramatically over the years, with many currently pronouncing that defense innovation is dead, or at least on life support. Yet the defense sector's primary customer, the U.S. government, needs creative solutions more than ever. With that in mind, and contract research-and-development funding harder to find, defense executives need to be mindful about their approaches to driving innovation.

Dozens of reports have lambasted the defense industry for a poor track record on innovation. The sector has itself reinforced this view and been critical of itself, ranking low in poll after poll among industries with respect to successful innovation. Indeed, polling for PA Consulting Group's 2015 report, "Innovation as Unusual," demonstrated that defense executives, when asked "Which Industries Have the Most Innovative Leaders?" ranked their sector a distant nine out of nine.

With this in mind, are we facing an endemic problem, or just a negative feedback loop due to preconceptions from a sector-led echo chamber?

According to leading industry reports, the two major failures in the industry are a lack of market insight--including poor understanding of the competitive environment--and poor communication between the customer community and industry as it relates to innovation. As a result, the prevailing wisdom is that the Department of Defense, and by extension, its suppliers, have been ineffective at identifying and cultivating innovation.

Chief among those constraints is the reality that government has been the defense sector's "market maker." Whereas commercial firms can develop and market innovative offerings to create new markets independent of end-user demands, defense firms have little ability to do the same. As such, defense firms tend to view innovation through a lens of what the government wants.

This creates two sets of problems. First, industry has not been incentivized to create new ideas and must deliver solutions defined by the customer, who often lacks awareness or understanding of the array of solutions industry is capable of providing. The result of this paradox is a laundry list of programs and solutions that have been over budget, delayed or canceled outright. Second, this reality creates a...