(Bloomberg) -- The Pentagon’s No. 2 official went to California this week to explore how to harness Silicon Valley’s innovation mindset as America’s military seeks to compete with China. The tech wizards she met with said the Defense Department must change its bureaucratic ways if it wants to succeed.
“The military keeps talking about their want and need for greater manufacturing capability, but they aren’t placing orders,” Blake Resnick, the 23-year-old multimillionaire and founder of BRINC Drones Inc., said in an interview after he and other industry leaders met with Deputy Defense Secretary Kathleen Hicks.
“This part drives me freaking crazy about this whole situation,” Resnick said. “Why in the world would I go and spend tens, hundreds of millions of dollars building factories to produce nothing?”
It’s a problem that Hicks and her predecessors have tried to answer for years, so far with limited success. One issue is the way the Pentagon spends money. In an interview Wednesday after touring startups in Palo Alto, Hicks acknowledged that the department’s two-year appropriations cycle is challenging for startups, which move on shorter fundraising timelines.
It’s among impediments Hicks will have to address as she and her Pentagon colleagues push their new “Replicator” initiative, which aims to spur mass production of low-cost drones for the military.
“We know the market moved past us in the US probably 10 years ago,” she said of the drone sector after meeting with Resnick and other leaders. “We know we have to bring incentives to the table.”
Hicks’ visit is part of a multiyear Pentagon push to make tech-sector innovations available to the US military. It’s an effort that officials say is crucial to the US’s ability to compete with China.
“There’s a real opportunity here for us to make the most of this comparative advantage that we think the US has on innovation,” Hicks said, adding that military ties with tech companies are stronger than five years ago.
The difficulties are compounded by the culture gap between the Pentagon, with its warrens of windowless hallways, and the glass-walled meeting rooms of Silicon Valley.
At drone-manufacturer Skydio Inc., Hicks watched a presentation about the firm’s defense contracts on a screen next to a “thankfulness tree.” Military aides in formal service dress heard from engineers wearing t-shirts and flip-flops.
Those differences echo through the procurement process, Hicks said, describing “cultural and structural problems” such as contract officers who tech companies view as “too risk-averse.”
Traditional defense contractors, by contrast, are packed with former Pentagon employees, providing a familiarity that’s absent in military interactions with the outsized personalities — and the often more creative thinking — of Silicon Valley entrepreneurs.
In California, Hicks saw a live feed of an autonomous military truck navigating a snow-covered dirt track in Idaho; watched the CEO of a commercial satellite company perform an AI-empowered search for Chinese nuclear sites in the desert; and viewed an F-16 flight simulator built with commercial technology at 1/100th the cost of its military equivalent.
“We saw some incredible innovations,” Hicks said after her tour of startups in Palo Alto. “But if we can’t get those innovations into the hands of the warfighter as a general rule, that’s a big problem for us.”
Hicks said strong contracts can help protect US taxpayers from the “individual proclivities of an investor-owner.”
Still, entrepreneurs’ political views can be more difficult to navigate.
Elon Musk, whose company Space X has won numerous Pentagon contracts, tends to generate storms of controversy, most recently after endorsing an antisemitic post on X, his social media platform. He later apologized but told advertisers boycotting the service to “go f—-k yourself.”
“We want to ensure that we’re working with folks who put the best values of America forward,” Hicks said when asked about Musk’s posts. “We’re about defending our values as a country so we want to make sure we’re working with people who represent those values."