Bridging the valley of death: why industry and government need to build from both ends

Wednesday 26 May saw global defence leaders, start-ups, policymakers and investors convene in London to address some of the most fundamental questions around national security as part of Defence Disrupted. It’s an apt name at a time when the transformation of defence means disrupting the status quo. Hybrid, multi-domain warfare and grey-zone operations have changed the character of war entirely, ushering in a need for new capabilities and technologies. Throughout a day of diverse discussion and debate, on one thing, it seems, everyone is agreed: what worked before will not work in the future.

Defence and national security organisations have been clear and consistent: they want to build a new kind of relationship with industry suppliers – and they need industry suppliers to build new relationships with one another – in order to get the latest technological innovations into the hands of the organisations we serve, delivered at the speed of relevance.

But getting to this point – and giving start-ups, SMEs and established suppliers the tools and opportunities they need to succeed in the defence space – is a path laced with seemingly intractable problems.

Identifying, exploring and interrogating these were the focus of Defence Disrupted’s talk Paving a path for innovation: How can the sector attract the very best of entrepreneurship?, which featured speakers spanning a variety of sectors from technology and engineering to cross-government organisations and investment banking.

I was privileged to be part of the conversation as it centred around one key question:

Is defence accessible for new entrepreneurs?

No, was the resounding response – though we’re making progress. As things stand, defence pipelines typically involve around 60% SMEs.

Anita Friend, Head of the Defence and Security Accelerator (DASA), highlighted several key blockers to any hope of increasing this number, including a non-diverse supply chain, and a false perception that defence procurement revolves around weapons, guns, and ‘pointy-end’ capabilities. There are myriad reasons why this view no longer flies, not least because so much of today’s conflict doesn’t take place on a battlefield. In an age where technological innovation is flourishing, leading to synthetic solutions that extend beyond traditional kinetic capabilities, it’ll take closer collaboration between defence, industry and academia to drive digital transformation and enable exactly the sort of capabilities that users are looking for to match today’s fluid and fast-moving threats.

Improbable Defence works with organisations like DASA – and, by extension, the Ministry of Defence. Where DASA’s mission revolves around finding and funding exploitable innovation to support UK defence and security, we’re focused on providing this innovation via synthetic capabilities, original research and, crucially, cross-industry collaboration.

Like so many comparable organisations in the defence sphere, we often find ourselves a thousand feet above the notorious ‘valley of death’. And like most start-ups, whether or not we get to the other side depends on the successful delivery of products and capabilities, supported by a collective commitment of the team to buckle in, buckle down, and stay the course.

As I said in Defence Disrupted’s talk, the challenge is around how to grow pilot projects and technology demonstrators into something scalable and sustainable. For that, you need investors with deep pockets and patience. You need specialist skills across your staff, and a network of people with a profound understanding of defence needs on your payroll to help justify product development and ensure it meets the mission.

There are also the nuances of buying, bidding and procurement to navigate. Not only do these processes foster the need to understand single-source regulations, but they also demand more from industry than just an exercise in creative writing. Instead, there should instead be a collective push for technical demonstrators that prove a business can deliver on its promises.

It’s a two-way street, however: to support this push, MOD needs to publish problems and challenges, rather than requirements. And when businesses enter the defence space in order to grapple with these problems and challenges, they’re taken seriously for the technology that they can offer.

Paving a path to innovation through collaboration

I had the privilege of sitting alongside Hannah Croft, Senior Consultant at Rowden Technologies, on the talk. She pointed to a past littered with expensive failures. Failures that deter bootstrapped, self-funded businesses like Rowden from branching into the defence space, with the onus on industry to demonstrate value with investment. But were there to be a well-established funding path for future programmes, the process would suddenly look a lot less daunting.

Then there’s the question of the funding itself. As Paul Hollingshead of Anduril Industries mentioned, it’s relatively easy to get £150k to launch a pilot project as an expression of interest, not a commitment – however tentative. But start-ups – and their backers – can’t afford to risk their existence on what, to bigger, better funded players, are table stakes. It’s not just a question of whetting investors’ appetite for risk. Start-ups need to attract and retain the best minds – and the best minds cost money.

When contracts are awarded, support shouldn’t stall. The good news is that we’re making headway here; Anita Friend highlighted DASA’s initiative of offering services to help SMEs navigate the onward path, mentoring around how they engage, all whilst ensuring suppliers are investor-ready – whether that’s government or private VC funding.

This is reflective of the collaborative direction that both defence and industry need to take in order to help SMEs bridge the valley of death. Having both sides working toward the same goal means building the bridge from both ends. SMEs and their investors need MOD to make participation commercially viable by being willing to take calculated risks. Meanwhile, SMEs need to demonstrate value and commit both time and resource to understanding the operational requirements of the end user, as well as the procurement process.

When SMEs can see safety on the other side, all of a sudden the defence sector seems that much more accessible – and attractive. The valley is not so deep, nor so wide, and more might be encouraged to take that initial leap of faith. Innovators can engage with and scale within the defence sector. Non-traditional suppliers can bring new digital tools and unique perspectives to bear on today’s most pressing national resilience and security challenges. The path to this point means disrupting the normal state of affairs, but I call it constructive – and key to preserving our nation’s safety, security and prosperity.