Congress, Administration Should do More to Spur Private Sector R&D for Defense

Today’s turbulent global arena contains many examples of nations (and non-state actors) vying for technological supremacy. On the high end, China and Russia have been aggressively investing in advanced aircraft, ships, missiles and associated technologies. At the other end of the conflict spectrum, Iran-backed surrogates are using drones sophisticated enough to kill U.S. soldiers and drive commercial shipping from the Red Sea.

In response, the Pentagon is pushing the U.S. private sector to innovate faster to ensure our capabilities meet the myriad challenges. But Congress and key agencies in the executive branch and not doing enough to support these efforts. More can and should be done – or else our efforts to deter conflict will ring hollow, and we will risk failure in the battlespace. The United States must encourage innovation with incentives to the national security industry.

Pursuing innovation is a business decision for the big and small companies that provide defense capabilities. I know from personal experience that these firms have a patriotic commitment – but covering the costs of cutting-edge research and development requires collaboration between the public and private sectors to bolster national security.

The most successful public-private partnerships couple outside expertise with insider knowledge, outside-the-box solutions with realistic adoption plans and the innovator mindset with the hard problem sets backed by a worthy mission that inspires excellence. This synergy can result in the creation of technologies that revolutionize the security landscape and the commercial marketplace alike.

Innovation struggles against market forces

Unfortunately, current market forces are working against innovation. R&D is an expensive undertaking, one that many companies cannot afford to do without financial incentives.

For example, the rising costs associated with the B-21 bomber have caused an understandable reluctance to bid on innovative new projects. Unlike Chinese state-owned enterprises, U.S. companies cannot be forced to take financial risk by the government. For the U.S. armed forces to have the tools they will need to successfully deter – or if necessary, fight and win – against modern adversaries, industry must have reasonable assurance that doing the right thing for our troops is compatible with doing the right thing for its workers and shareholders.

Congress is currently considering a measure to provide that assurance — the Tax Relief for American Families and Workers Act of 2024introduced by House Ways and Means Committee Chair Jason Smith, R-Missouri, with full support from Senate Finance Committee Chair Ron Wyden, D-Oregon. This bipartisan bill offers, among other things, significant tax deductions for U.S. based research and development (R&D) investments, thus encouraging domestic investment and innovation. These would not be limited to defense giants but would particularly assist innovation in small business technology start-ups.

Whether flying combat missions over Serbia in the F-16, serving with the ground forces during the invasion of Iraq or in my capacity as former deputy commander of the U.S. Pacific Command, I had acute awareness of the tactical and strategic advantages uniquely creative American technology provided.

American innovation is of great value to the individual warrior – and to our overall national security. Enhancing the environment for industry investment in R&D will give our nation an essential advantage to deter or defeat as needed. Our private sector can foster innovation and advance technology at an unparalleled pace.

Re-energizing the relentless drive for exceptional U.S. national security technology can be powered by the kind of partnership embodied in R&D provisions of the proposed legislation. From cyberspace to submarines, critical infrastructure security to surveillance, combat systems to satellites – the private sector’s imagination, agility and speed are mission critical.

I urge adoption of pro-innovation policies in government that allow the private sector to continue its legacy of providing difference-making innovation to our soldiers, sailors, airmen, Marines and Guardians as they conquer the complex security challenges of the 21st century and beyond.

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