Rethinking Dual-Use Mandates: A Clearer Path for Defense-Tech Startups

Dual-use technology refers to any product or research that has both civilian and military applications. Examples include drones, certain chemicals, thermal imaging/night vision, and AI. On the surface, Government funding for dual-use technologies seems like a win-win because both the public and private markets benefit from new technologies. However, as we will discuss in this article, the rise of a dual-use mandate from the Pentagon discourages new startups that want to innovate weapon-specific products from entering the defense space.

Because the DOD cares about the speed of innovation in its competition with Russia and China, it should focus on new pathways for ‘defense-only’ startups – companies that are building products without clear dual-use applications.

The consolidation of the legacy defense industry has been a major contributing factor in the rise of the dual-use mandate:

1. In 1993, The Last Supper prompted the fall of the vibrant American defense industry. The dinner, held by then Secretary of Defense William Perry, had the purpose of giving defense industry leaders one clear message: “Consolidate or Perish.” The Pentagon was cutting its budget significantly, meaning that they could not continue to support the dispersed industry. At the time, the sector had a variety of contractors who sat at the table. Now, only five legacy players remain, including the giants Raytheon and Lockheed Martin. So where did this leave smaller innovators that had their own ideas to bring to the table?
2. After The Last Supper, the term “dual-use” rose in prominence, likely because the Pentagon, with a newly slashed budget, needed the commercial industry to help keep their partners safely in business. The DOD started to add dual-use mandates as it was convenient to source products from the commercial world.
3. This focus had unintended consequences. A startup building a new product or service doesn’t have any traction from public or private sectors. That means they are immediately precluded from going after innovation dollars that have an associated dual-use mandate. Additionally, if a startup is building a “single-use” product, e.g., a new weapon system, there are now fewer buckets of money for the startup to pursue.

Most defense innovation groups that have been formed in the last few decades, such as the aptly named Defense Innovation Unit (DIU), have a dual-use mandate, but we believe the Government should relax requirements for defense products to have a commercial future.

Why? Let’s look at a category of new products that has everyone interested: autonomous weapons.

Robotics applications are most successful when they are purpose-built to accomplish a set of specific tasks. Dual-use makes them less effective because the product designers have to make general purpose robotics which complicates the design and creates risk in both commercial and military applications.

The combination of cheap, capable hardware (like the NVIDIA Jetson) and the most recent advances in AI and robotics has created a huge opportunity to design new weapon systems for deterrence.

We want innovators focused on this, not on how they can build systems that also work for commercial use. For example, at ACS, we make an autonomous weapon station, Bullfrog™. There isn’t a dual-use for autonomous weapon stations. You won’t see these systems protecting a college baseball game, for instance. Yet, its capabilities can revolutionize the battlefield.

There is a clear solution: if we want the most innovation possible, we must nurture our defense startup ecosystem. This begins with the DOD changing their early stage funding criteria to not include a dual-use checkbox. By giving a signal to startups that success is not restricted to dual-use technology, they will be able to narrow their focus and deliver a better product, faster for the Government.

As Trae Stephens, Cofounder of Anduril, eludes in his tweet storm on dual use, “a perfect future state would be one where the DOD buys defense-specific items in the same way they buy commercial products.”

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