Innovations & technologies

Can the Pentagon tap into a soaring ‘deep tech’ ecosystem?

After cashing in from relatively simple internet applications like Facebook, Snapchat and others, entrepreneurs have started tackling harder problems. “Deep tech” requires significant capital and long R&D timelines, potentially creating a big impact. Private investment in deep tech grew 81 percent between 2015 and 2018, the Boston Consulting Group found, and includes 4,198 U.S. companies.

The trends toward deep tech provides a major opportunity for the Department of Defense. For example, Adranos Inc. is increasing rocket range by 40 percent. Before the Army’s xTechSearch, the company worked on a new solid propellant without even considering defense applications like hypersonics.

Two issues continue to stymie the DoD’s reach into commercial deep tech. First, defense agencies are spreading small dollars across a large number of companies.

“I think we have a totally flawed system where you have people in government who feel like they’re checking the box by allocating a little bit of capital to many projects,” said Josh Wolfe of Lux Capital. “As venture capitalists, we don’t put $250,000 or half a million into a hundred companies. We try to double down on the best teams with the most cutting-edge technologies.”