PerspectiveHow Will the Pandemic Affect National Security Innovation
The second week of March was an inflection point for many across the world. Rachel Olney writes that as a founder of a tech company with commercial and defense customers, she has concerns for the early-stage companies with defense applications. With the massive economic downturn came panicked investors trying to determine which companies in their portfolios would survive. “They reached out to learn how much cash we have, if we can do layoffs, and if we would ultimately survive,” she writes. “My experience was not unique.”
The second week of March was an inflection point for many across the world. Rachel Olney writes in War on the Rocks that as a founder of a tech company with commercial and defense customers, she has concerns for the early-stage companies with defense applications. With the massive economic downturn came panicked investors trying to determine which companies in their portfolios would survive. “They reached out to learn how much cash we have, if we can do layoffs, and if we would ultimately survive,” she writes. “My experience was not unique. My peers went through the same set of questions from their investors. The world of high-tech startups, like many other major industries, is in jeopardy, and the decisions these companies make will have lasting ripple effects for U.S. national security.”
She adds:
Not only does the United States rely on startups to maintain the lead in defining and monetizing new technology, but the Department of Defense also just started to create a stronger, more expansive, and more diverse defense industrial base that includes these leading-edge technologies. CEOs are taking a hard look at how their companies will fare during this storm. Some contingencies they are planning will pull them out of the defense ecosystem. Some companies won’t make it through the next year. But there are things the Department of Defense can do to strengthen the U.S. national security innovation base through speeding cycles for new Small Business Innovation Research Grants and Commercial Solutions Openings. The Pentagon should also be incentivizing Program Executive Offices to spend budget on non-traditional defense contractors, and surge funding for defense-specific activities within commercial companies. Additionally, Congress should modify the “affiliate” rule for the Paycheck Protection Program and Emergency Injury Disaster Loan to ensure early-stage defense technology companies are eligible to apply.
