The Defense Department will expand its technology outreach and investment efforts to Austin, Texas, Secretary Ash Carter announced Wednesday.
The Defense Innovation Unit Experimental presence in Austin — its third established hub across the country, joining Silicon Valley and Boston — will be operated by local reservists and National Guard members at startup incubator Capital Factory, which Carter called “Austin’s ‘center of gravity for innovators.’”
Carter created DIUx last year to rebuild the bridge between the Pentagon and the innovative American technology community, a partnership that in the past has led to the development of things like GPS and the internet but more recently has diminished.
At the helm of the new outpost in Texas’ capital city will be Christy Abizaid, Carter’s deputy assistant secretary of defense for Afghanistan, Pakistan and Central Asia who he called one of his “most trusted policy advisers for what you will all recognize as a critically important region.” She will report to DIUx Managing Partner Raj Shah.
“Given this city and this region’s commitment to innovation, and also, I should say, this state’s deep connection to those who serve, we couldn’t have picked a better place than Austin,” Carter said of the new DIUx location.
He added: “Coming here made perfect sense. The ‘Silicon Hills’ of central Texas have long been a hotbed of scientific and technological innovation, from the garage inventors and dorm room entrepreneurs who follow in Michael Dell’s footsteps to the startups nurtured in incubators like Capital Factory right here, to the researchers and grad students breaking new ground on campus at [the University of Texas].”
But Texas also has deep ties to the military, with large populations of service members, their families and veterans, and is home to more than a dozen military bases and some of DOD’s longstanding partners who manufacture innovative weapons systems and military aircraft, Carter said.
“In fact, Texas has one of the highest numbers of veteran-owned businesses in the country, including dozens of startups right her in Austin,” he said. “So bringing DIUx to central Texas and to Austin was a logical step for us, and we’re fortunate there are to organizations here — institutions really — that can help us get established in the area.”
Carter also emphasized that the Austin unit will give DIUx a chance to expand its national reserve element, introduced as part of its reinvention announced in May and led by Navy Reserve Cmdr. Doug Beck, who also serves as a vice president for Apple.
Reservists “provide unique value to DIUx since many of these patriots are tech industry leaders and entrepreneurs when they’re not on duty,” the secretary said. “We’re looking to benefit from such talent even more in Austin, because here, DIUx will build its ranks by recruiting proven local innovators who already serve our country in the National Guard and the reserves. Once they come on board, they’ll serve part-time — that is, in their regular reserve capacity — to help connect the broader DIUx enterprise with local entrepreneurs and nearby companies that are developing promising technologies with potential customers across our Department of Defense.”
Those members of the Austin team will “work in close coordination with the DIUx partners in Silicon Valley and Boston,” Carter said, “and if this model continues to succeed, we’re going to look to replicate it in other innovation hubs across the country.”
“The ‘x’ in DIUx is well past proving itself as an experiment, but it won’t stop experimenting,” he emphasized.
Indeed, after a bumpy start, DIUx is beginning to hit its stride, Carter explained, closing in the last three months five deals worth $3.5 million, each awarded within 50 days of initial contact with the companies.
“That’s fast, especially for the Department of Defense,” he said. “And they have another 22 projects already in the pipeline for an additional $65 million in areas like network defense, autonomous seafaring drones and virtual wargaming.”
DIUx’s ability to fund such projects with just $17 million in appropriations is augmented by co-investing services in the Pentagon, so far with $51 million of support. “For each $1 DIUx invests in innovative technology, other parts of the department are investing nearly $3,” according to a DOD release.
And later this fall, DIUx’s newly created Defense Innovation Board, led by Google’s Larry Page, is slated to recommend even more innovations the team should lead investments in — “in time for me to review and determine which ones make sense for us to adopt,” Carter said.