Silicon Valley wary as Pentagon chief to court innovators


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Defense Secretary Ashton Carter gestures during a speech Thursday, April 23, 2015, in Stanford, CA, U.S. Photographer: Ben Margot/AP Photo Defense Secretary Ashton Carter gestures during a speech Thursday, April 23, 2015, in Stanford, CA, U.S. Photographer: Ben Margot/AP Photo


With malware joining missiles among the threats to America’s security, leading technology innovators such as Apple Inc. and Google Inc. are being recruited to join traditional defense contractors on the front lines.
Defense Secretary Ashton Carter is visiting Silicon Valley Friday as part of a continuing effort to bridge the divide between the Pentagon and a tech community wary of excessive surveillance and privacy violations.
Carter plans to meet with executives of LinkedIn Corp. and initiate an official Defense Department page on the professional networking website, as well as addressing a technology community audience, according to a Pentagon spokesman, Navy Captain Jeff Davis.
There’s no high-tech equivalent of the “military-industrial complex” that troubled the late President Dwight D. Eisenhower, and gone are the days when government spending fueled technological innovations that benefited both the Pentagon and defense contractors.
Technology has “really reversed from the old days,” from “trickling down from the warlords to bubbling up from the 15-year-olds,” said Paul Saffo, a consulting associate professor at Stanford University, in an interview.
The mission is important: Today’s top defense challenges include U.S. computer-network vulnerabilities exposed by foreign hacking, the development of unbreakable encryption, the evolution of information-age warfare and the skilled exploitation of social-media platforms by Islamic State and other extremist groups.
Still, Carter is facing an uphill battle.
Top-level Pentagon outreach is necessary because “the tech companies distrust U.S. government officials and think there is little exciting work in government even if they were interested,” said MacKenzie Eaglen, a defense analyst with the Washington-based American Enterprise Institute.
‘Coolness factor’
Carter has talked of the Pentagon lacking a “coolness factor,” so Friday’s trip is a step “to speed up the relationship and trust-building efforts and get on with doing actual business together,” she said.
Carter seeks to bring together traditional aerospace and defense contractors such as Lockheed Martin Corp. and Boeing Co. and technology companies because “the U.S. military cannot hope to regain its technological superiority without this happening,” Eaglen said in an e-mail.
“But it will be difficult, and the effort will need to last beyond this secretary of defense and administration,” she said.
Silicon Valley innovators, venture capitalists and the defense industry will all be watching for signs during Carter’s California visit that he and company executives can get “beyond the ‘meet and greet’ phase and begin discussions about what needs to change for more commercial technology company participation in defense,” said Byron Callan, a defense analyst with Capital Alpha Partners LLC in Washington.
‘Not risk-takers’
Established defense contractors “are not risk-takers anymore,” Callan said. “They’ve grown content to wait for DoD to issue requirements, push for high margins and return cash to shareholders. That’s very different from Silicon Valley models where big problems are tackled, risks are taken and growth takes priority over margins.”
Analysts such as Loren Thompson of the Arlington, Virginia-based Lexington Institute say the Pentagon’s shifting focus may have “negative consequences” for traditional defense contractors as it increases spending on offensive and defensive cyber capabilities and tries to adapt quickly to evolving threats.
The Defense Department is requesting $5.5 billion for cyberspace activities in fiscal 2016, about $537 million more than in the current fiscal year. Pentagon budget documents envision spending $27.4 billion on cyber-operations and research through 2020, in addition to $36.8 billion in general information technology spending.
Natural emissary
Carter is a natural emissary to Silicon Valley. His background as a physicist makes him the first scientist since Harold Brown in the late 1970s to serve as defense chief.
“He talks their talk, he understands a lot of their issues and he’s trying to forge a stronger relationship with the tech community,” Pentagon spokesman Peter Cook told reporters Tuesday.
Still, he faces significant hurdles building Silicon Valley ties due to perceptions, as well as practices.
“There have been reservations about, for some companies, doing business with the Department of Defense -- it’s too complicated, maybe it’s not worth the connection,” said Cook.
The federal government’s relationship with Silicon Valley is complicated by disputes over privacy and encryption, and particularly by former National Security Agency contractor Edward Snowden’s disclosures about U.S. government surveillance activities.
‘Completely irate’
“They were completely irate at the fact that the government was siphoning off data from data centers that are being run by the big tech companies,” said Al Hilwa, an analyst at the research firm IDC.
The FBI, NSA and other national security agencies are matching Carter’s outreach efforts. They’re looking to Silicon Valley for help countering cyberthreats and adapting new commercial technology for defense applications -- and looking for potential employees with advanced computer knowledge.
Admiral Michael Rogers, the NSA director who also heads the Pentagon’s Cyber Command, said he visits Silicon Valley companies “fairly regularly” to address trust issues, understand innovations, and identify possible areas of cooperation.
“We are an organization that employs technology to defeat technology,” he said at the Aspen Institute’s annual national security conference last month. “And much of that technology on both sides of the equation is developed by others.”
Two-way street
Tim Reardon, a vice president with Lockheed’s defense and intelligence solutions unit, says the relationship can be two-way.
“The U.S. government has capabilities to see cyberattacks massing, getting ready to be launched,” Reardon, a CIA veteran, said at the Aspen event. “That’s pretty indicative of the type of capability that the government has that the private sector, frankly, does not.”
Carter’s one-day visit will be his second since April, when he presented his vision for a Pentagon-Silicon Valley partnership in a speech at Stanford.
That was followed this month by a visit from Deputy Defense Defense Secretary Robert Work and chief weapons buyer Frank Kendall to open the “Defense Innovation Unit -- Experimental” at historic Moffett Field in Mountain View, in the heart of Silicon Valley.
The new unit, known by its acronym DIUx, is intended “to serve as a catalyst for building new relationships and fostering opportunities that will benefit national security and industry,” according to a Pentagon statement.
Historical ties
Pentagon leaders such as Carter and Kendall have said they’re looking to Silicon Valley for leap-ahead innovations that boost military capabilities, as defense-funded projects did in the past, from radar to jet engines to the Internet.
The Internet and GPS technologies “are famous examples of early DoD investments that revolutionized the tech industry,” according to Katell Thielemann, an analyst with Gartner Inc. “Many tech companies also got their start due to early DoD-U.S. government investments via grants or joint development projects.”
The Pentagon had a foothold in the area south of San Francisco before it was widely known as Silicon Valley, with the missile unit of what’s now Lockheed operating adjacent to Moffett Field from the late 1950s.
Connection eroded
Its need for miniature electronics and other missile or satellite components generated business for nearby semiconductor and technology companies.
That Pentagon-Silicon Valley connection eroded during the Vietnam War and with the subsequent burst of innovation unconnected to the defense establishment, said Stanford’s Saffo.
“The biggest obstacle to success will likely not be technical, but rather cultural -- command-and-control hierarchical world meets free-thinking, innovative world -- and business-model driven,” meaning who owns what intellectual property and how it’s monetized, Thielemann, the Gartner analyst, said.
There’s “a lot of inside-the-Beltway skepticism” that the initiatives will amount to anything, said Callan. “But the intent is there, and its hard to see how the U.S. could sustain military technology superiority without tapping into the most vibrant part of its economy.”

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