If I told you that your familiar old sofa had enough money between its cushions for you to buy a beach house, would you still throw it away? Or, would you take the time to hunt between the cushions to find the money — even if it wasn’t necessarily easy.
When I look at how our community has traditionally treated opportunities to bring entrepreneurs and national security technology together, I suspect that many of you would just give away the sofa. I think we need to change that.
The Washington region has the highest concentration of national security agencies in the United States. This is very important. For more than 100 years, our national economic progress has been led by industries funded and fostered by our national security establishment.
Countless innovations that you know about (Siri, GPS, semiconductors and biotechnology) and some you don’t (thought-controlled artificial limbs, 4D data presentation, bendable metals, and proteomics) are developed every year under the guidance of our national security agencies. When these new technologies come to market they are unique and command high value-added pricing. They are not commodities. They often become the backbones of new industries, and very, very rewarding for the entrepreneurs and regions that foster them.
Many of the conversations our region has around entrepreneurship and start-up formation tend to separate entrepreneurship from national security. We act as if they are unrelated. We point to Silicon Valley as a template for the companies we should grow and the industries that we should build our companies in. And, in so doing we make three big mistakes:
Firstly, we buy into a flawed mythology that Silicon Valley’s success shows that there is no role for national security innovation, when in truth Silicon Valley’s very existence is tied to national security research and development and requirements.
Secondly, we do not appreciate that the true measure of a region is not the start-ups it forms, but the businesses that it grows and sustains. A review of merger and acquisition data for a six-year period that I published in 2012 demonstrated that regions grow a vibrant and sustainable start-up ecosystem when businesses are grown that are most connected to a region’s largest companies.
Lastly, by looking elsewhere for regions to copy, we do not see the advantages that we have with our own. We act as if government and entrepreneurship, government services and products, and tech commercialization and start-up success are separate activities. In fact, when they combine is where we are most innovative as a nation.
I believe that by integrating all that we have, and breaking down the artificial silos that separate our many attributes, we can take advantage of our region’s strengths. Admittedly, working to create new industries is much harder than following current trends, but ultimately it is more profitable. By focusing our region’s efforts on mining the technology and innovations currently being funded by our national security agencies, we create the possibility for our region to be the leader in the establishment of new industries, with high value-added jobs and start-ups. Much of the technology that will shape the next 30 years of our nation’s economy is being developed in our midst.
Let’s get to work.
Jonathan Aberman is managing director and founder of Amplifier Ventures, a investment firm that focuses on emerging technologies. He is also the managing director and founder of Arlington-based Tandem NSI, a program to promote greater connection between entrepreneurs and national security agencies.