Why does Defence make it so hard for tech start-ups to help them?

• Firstly, Defence loves to talk about innovation and entrepreneurship, but doesn’t consistently incentivise the right behaviours to create the necessary culture. Permissions and budgets talk more than headline-grabbing straplines.
• Defence is too comfortable with its cosy and familiar relationship with big Primes, in which everyone knows the rules and there seems to be a tacit acceptance that delivering cutting edge technology, on time, to specification and within budget is just not going to happen. Both sides discreetly point the finger at the other to explain under-performance, and all the while warfighters have to get on and compete with one hand tied behind their backs.
• The most talented and dynamic digital employees are attracted to the better-funded start-ups, not to the Primes. Many of the best and most innovative software solutions will inevitably emerge from this talent pool and culture.
• There are a cohort of disruptive tech companies operating within the Defence ecosystem who genuinely want to help. They are led by people who care about national security and are passionate about making a difference. They do things differently. Companies like WithYouWithMe are young, dynamic, unimpressed by precedent and are in a hurry to effect change.
• Institutionally (and often individually) Defence and wider Government is suspicious of these up-starts who do not seem to play by the rules. They are much more comfortable sticking with the big companies they have always worked with. No one will lose their reputation for contracting with a Prime, but working with a start-up (even when they are financially backed and brimming with talent) can come with personal risk.
• The Government’s procurement rules, which in principle are necessary to ensure appropriate and effective use of the taxpayer’s money, in practice stifle entrepreneurship and are not fit for purpose in the Information Age, given the nature and severity of the threats facing the UK and our allies.
• Defence and Government simply move too slowly to allow many start-ups to thrive. Often these firms are developing capability that does not yet exist and so Defence has no stated requirement for the technology. With no requirement or partnership, the start-ups own all the financial risk. If they are lucky there might be some paltry innovation funds to keep them going, but too often flattery and promises fail to translate into timely commitment.
• Government tendering requires competition which is problematic when start-ups offer unique and ground-breaking capability where there simply isn’t any competition or second bid.
• Start-ups struggle to survive the systemic delay that characterises UK Defence procurement unless they have alternative international and civil procurement streams. Consequently, dual-use capability and a viable commercial market is essential for start-ups to mitigate prohibitive public sector timelines and bureaucracy. While UK Defence procrastinates, start-ups commit into other markets, often overseas.
• Start-ups thrive on failure. It is a central pillar of the path to success. The best warfighters also use failure as a route to learning and excellence. However, in Defence policy and procurement this appears anathema with deep-seated, institutional aversion to risk.
• Despite big strides led from Defence Digital, the MOD is still most at home buying hardware. Software remains something of a mystery. There are anecdotes of the customer only being interested when software comes with associated (comfort blanket) hardware. This points to cultural barriers that are not readily overcome.

Of course it isn’t easy for Defence and Government to adapt to exploit start-up opportunities, but most good things in life require hard work. No matter how much innovation zeal exists, real progress will be stymied until the rules and culture change. Procurement rules must reflect the commercial and security world in which we live, and be applied with flexibility.

Together with our closest friends in the US, Australia, Canada and elsewhere, we need the very best capability and we need to partner with the brightest and most entrepreneurial minds. This is the only way that we will compete. And compete we must. Russia’s barbarous invasion of Ukraine and China’s blistering military expansion and aggressive posturing over Taiwan should awake everyone to the geo-political realities. 

As always, these are just my thoughts based on experience. Others will likely see things differently and I would be fascinated to read comments and different views.