We continue to track the thought leadership of Will Roper, former Assistant Secretary of the Air Force for Acquisition, Technology, & Logistics.  Roper is currently on the advisory committee for the Defense Innovation Board and, since he founded the company in 2022,  is the CEO of Istari, Inc.  Roper recently co-authored a white paper with McKinsey on the future of Federal R&D.  Based on the impact and outcomes of Roper’s tenure at the DoD and operations likeAFWERX, the Air Force continues to think differently about classic procurement and acquisition challenges  – and the tough tech and deep tech opportunities ahead.  We also include in this post a case study on how “The Air Force is quietly revolutionizing parts replacement.”

Evolving Federal R&D to Meet the Challenges of Tomorrow

By James Ivers, Will Roper, Matt Watters, and John Willison

“Maximizing the value of R&D expenditures will require taking a broader, portfolio-level perspective and accepting a certain level of risk—and failure—in the process.”

From the report:

“In fiscal year 2023, the US federal government spent approximately $190 billion on R&D. This was a roughly 13 percent increase over fiscal year 2022, making it one of the largest R&D spending jumps in recent history.  Amid geopolitical shifts and rising competition abroad, legislation such as the CHIPS and Science Act and the National Quantum Initiative Act reflects a growing priority on securing the country’s place as a leader of global R&D well into the future.

To deliver on the full potential of US R&D expenditures, many in the federal government are looking to the private sector. Over the past several decades, the private sector has replaced the government as the driving force behind R&D, accounting for 73 percent of overall R&D spending in the country in 2020. By comparison, the US government accounted for nearly 70 percent of global R&D spending when organizations such as the National Laboratories and the Defense Advanced Research Projects Agency were founded in the 1950s and 1960s.

Indeed, even in the US Department of Defense’s (DOD’s) 14 Critical Technology Areas, the DOD recognizes that the private sector is leading innovation in 11 of them.  For example, venture capital investment in 2023 was equivalent to about 450 percent of DOD investment in advanced computing and software and about 800 percent of the department’s investment in biotechnology (exhibit). Considering the private sector more broadly, there are similar trends in additional areas, such as quantum science, in which industry has invested more than $5.5 billion (nearly 250 percent of DOD investment) since December 2022.”

Today, companies have developed sophisticated approaches to maximize the impact of their R&D activities. Already, Silicon Valley concepts such as “disruption” and “a start-up mindset” have entered the government lexicon, but they have yet to be truly embraced by public sector R&D organizations. While public and private sector R&D often differ in their nature and objectives, they share a common need to accelerate the time to impact and generate tangible outcomes for stakeholders in both the short and long term.

During times of crisis, US governmental R&D organizations have repeatedly risen to the challenge, delivering breakthrough technologies on extraordinary timelines. Now, the question is how to maintain that dynamism during a steady state. Drawing on lessons from leading R&D organizations in the pharmaceutical, aerospace, and venture capital (VC) sectors, we have distilled six insights that could potentially be adapted to the public sector context.

These best practices could help US federal government agencies—and potentially governments in other countries—make the most of their R&D expenditures, accelerate technological innovation, and effectively deliver on their missions for years to come:

1. Go broad on ideas and deep on execution:  Successful R&D organizations cast a wide net to source ideas and then make large, concentrated investments in a few select candidates with the most-promising risk/reward propositions.
2. Focus on distinctive capabilities:  Top performers recognize the risks of being a jack of all trades and master of none; they take a critical eye to their organizational strengths and weaknesses and deliberately orient their R&D activities around existing competitive advantages.
3. Clearly define success metrics—and keep users at the center:  R&D and innovation are not ends in themselves; they are means to an end. It is therefore critical to define success up front (for example, by evaluating R&D activities in the context of the organization’s mission statement and strategic objectives) and establish rigorous, data-driven performance-tracking mechanisms to evaluate progress.
4. Evaluate success at the portfolio level, not the project level:  Best-in-class organizations recognize that R&D is a team sport. They use overall portfolio performance rather than individual project performance to manage resources and directly reward R&D personnel.
5. Accept failure as part of the process—and learn from it:  Because R&D projects inherently have a low probability of success, R&D organizations must accept failure as part of the process. The most effective R&D organizations aggressively terminate projects that lag behind expectations and rapidly reallocate resources to the projects with the most potential. They also have robust mechanisms in place to diagnose the root causes of failures, synthesize key lessons learned from those experiences, and integrate those lessons into their ongoing operations. A leading aerospace company has made iterative, full-scale testing of its vehicles a hallmark of its R&D work, the speed of which has significantly outpaced that of many competitors in the industry.
6. Construct a balanced, tailored R&D portfolio:  R&D organizations in both the private and public sector are expected to simultaneously advance near-term priorities and long-term objectives. This requires balancing the R&D portfolio to not only align with the organization’s target risk profile but also enable the full range of R&D investments—from high-risk, high-reward “moon shots” to feasible, near-term enhancements.

For the full McKinsey report, go to Evolving federal R&D to meet the challenges of tomorrow.

The Air Force is Quietly Revolutionizing Parts Replacement

A startup’s robotic system that fits on a truck could replace sprawling die-based factories.

As reported by Defense One:  

• The U.S. military spends billions on replacement parts for aircraft each year, with the Air Force requesting $1.5 billion for parts in the next fiscal year alone. Now, officials at Robins Air Force Base in Georgia, working with a startup called Machina Labs, say they’ve found a robotic AI-driven solution to those high costs. And the new technique could also significantly shorten the supply chain, allowing replacement to happen closer to the front lines.
• Machina Labs’s solution is called the Robotic Craftsman. The technique applies artificial intelligence to the job of crafting shapes into metal with human precision, and then uses robotic arms to fold the metal into place.
• The Warner Robins Air Logistics Center has had one of the systems at its depot since November. Shane Groves, a subject matter expert at the center, told Defense One that the system has helped them take six months off the time it takes to get a part.   And, he said, it’s a lot easier to maintain than the traditional system, which has a lot of difficult-to-replace components. 

“It’s not that we’re just deploying robots to old technology. It’s a completely new technology developed from scratch.” Edward Mehr, one of the co-founders of Machina Labs, told Defense One. 

What Next? 

The Future of the Pentagon is Digital Engineering – and Formula One Racing-style “Prowess at this New Statecraft”:  Istari, Inc. brands the “metaverse” and “digital twins” as another subcategory – “digital approaches to design and development in the digital domain for large scale physical world systems” – which the company calls  “digital engineering.” The evolution of Roper’s experience and thinking is provided here, including his positioning of Formula One racing as the best-in-class business model generation and value proposition design which the Pentagon should strongly consider as a DoD-wide model for the future:   “There will be myriad learning events on the way to Formula One prowess at this new tradecraft,” says Roper. “The government needs to buckle up, pun intended, and get ready to learn and decide if it is really in the business of innovation. Or does it like talking about it, knowing that somehow innovation is always denied to the public sector.”  

Additional OODA Loop Resources 

Technology Convergence and Market Disruption: Rapid advancements in technology are changing market dynamics and user expectations. See: Disruptive and Exponential Technologies.

The New Tech Trinity: Artificial Intelligence, BioTech, Quantum Tech: Will make monumental shifts in the world. This new Tech Trinity will redefine our economy, both threaten and fortify our national security, and revolutionize our intelligence community. None of us are ready for this. This convergence requires a deepened commitment to foresight and preparation and planning on a level that is not occurring anywhere. The New Tech Trinity.

Benefits of Automation and New Technology: Automation, AI, robotics, and Robotic Process Automation are improving business efficiency. New sensors, especially quantum ones, are revolutionizing sectors like healthcare and national security. Advanced WiFi, cellular, and space-based communication technologies are enhancing distributed work capabilities. See: Advanced Automation and New Technologies

Rise of the Metaverse: The Metaverse, an immersive digital universe, is expected to reshape internet interactions, education, social networking, and entertainment. See Future of the Metaverse.