Forget “The Valley of Death”

The Pentagon will never be able to adapt the way modern technology companies must to survive. The decisions needed to develop and bring innovative technologies to market are now made in weeks and months, while the Pentagon must set decisions five years at a time. Perhaps those timelines were sufficient in the 1960s, when technology was not yet software-driven and followed Moore's Law. But today, those timelines are putting the country's defense and the commercial industries essential to supporting it in a death spiral.

But the Pentagon's 23,000-person bureaucracy was never designed to produce technological innovation; it exists to help civilian leaders make smart, calculated policy and budgetary decisions that best ensure the country's defense. Yet for all the valuable advice they and their hired advisers routinely dispense, one thing has become quite obvious: The Pentagon will never be able to create a profitable business, build a working satellite, or manufacture a working rocket. What they can do (and desperately need to do) is redesign the bureaucracy itself to fuel the commercial space economy by purchasing out of it rather than continuing to try to dominate it. If they fail to do so, the $43 billion already invested in space projects will have been for nothing, as will American leadership in space.

The first and most important step is to acknowledge the obvious: Neither the thousands of Pentagon employees nor the shadow government that supports them are engineers or investors. Although many of them have degrees in STEM subjects, they do not design, build, or maintain products or services. And although many of them have MBAs from the nation's top business schools, they do not risk capital in the expectation of profits—they are not investors. In fact, some believe that profits must be minimized or capped—a clear sign of a misunderstanding of how a properly functioning economy works. Earned profits reinvested in that same competitive market are precisely the rocket fuel that will propel America's space industry forward and unleash the true genius of a new generation of spacefarers that will take humanity to the stars.

But how exactly could the Pentagon take advantage of what the best of these founder-CEOs, the “real” engineers, have to offer our national security? First, forget about trying to build the unattainable “bridge over the valley of death” — that time when early-stage startups are simply supposed to wait for the Pentagon's outdated processes to take hold and catch up with their genius. They can eliminate the need for the elusive “bridge” by starting with the end in mind: the warfare commands. Thanks to the stunning successes of commercial space companies, Congress and the Pentagon have very little to invest in developing new rocket and satellite designs, because by the time their frankenrocket or frankensatellite is ever built, they will be obsolete for almost any purpose.

Under the current process, the needs of warfighting commands often go unmet because they are rarely at the top of the budget priority list. Too often, projects dreamed up by think tanks and politicians to serve other purposes are given first priority. Our national defense would be far better served by buying, launching, and operating useful space capabilities by taking advantage of today's market. Competitive, fixed-price contracts with the same funding as Congress approved are the only way out of the disasters created by self-funded pet projects over the past twenty years.

Given the urgency of war, the Pentagon and Congress must stop being couch-sitters and focus instead on what the warring commands really need today. This will allow local acquisition agencies and offices to focus on what they are designed to do: procure the products, systems, and services that meet those unmet needs today. Developing only what is not yet commercially available, rather than so-called “investments” that are little more than Cold War cronyism, will yield enormous cost savings, comparable to the billions saved by the now fiercely contested launch business.

How much could the Space Force save by doing this? One only has to look at a small fraction that has already gone down this path, although it is the most difficult. Only 10 years ago, the Air Force paid over $350 million per launch, plus a standard annual fee of $1 billion for infrastructure. Today, the cost is approaching 1/10^th that after rethinking an industry based essentially only on steel and jet fuel. That alone has freed up billions for taxpayers and put the US back in the lead in space launches after a decade of chasing and relying on the Russian space program. Imagine the possibilities for today's government satellite and ground systems business, largely dominated by software and the technology sectors where productivity doubles every two years.

Forget inventing fictional bridges over the “valleys of death” — instead, overhaul the space side of the Pentagon's planning, programming, and budgeting for the new generation: the space generation. If they do that, they will be remembered as the team that kept the country from falling behind its adversaries. If they can't, future generations will be left with an Amtrak-style space industry, and ours will be remembered as the one that squandered a deserved lead over our predecessors.

Our adversaries are catching up fast, or are already one step ahead of us today. We must abandon the old command economy approach and leverage our greatest economic strength: innovation, free markets and private capital. Forget so-called government investment – today's entrepreneurs cannot wait for a five-year planning system to catch up. Demonstrate and test at will, but buy quickly what the soldiers desperately need, and let the real innovators take the lead, backed by billions of private capital just waiting to be deployed.