The continued lagging investment by the federal government in startup technologies threatens to curtail the venture-capital boom in defense tech at a crucial time for U.S. competitiveness around warfare as the geopolitical landscape grows ever more unstable.
NEW YORK, July 11 (Xinhua) -- The U.S. federal government has spent 22 billion U.S. dollars in recent years on technology from the top 100 national-security startups, a small portion of overall contract spending and less than half of what venture capitalists have invested in those same companies.
The new numbers come from a report released on Thursday by Silicon Valley Defense Group, a nonprofit that started a decade ago with the aim of bringing more startup innovation to the Defense Department.
"The gap underscores the discrepancy between the surge of venture capital funding for defense technology and the U.S. government's spending on substantial contracts to startups," said The Wall Street Journal in an article about the report.
According to the report, the top 100 venture capital-backed national security startups have raised a combined 53 billion dollars in private funding since their inception, 11 billion dollars of which has come in the past 12 months.
Those same startups have collectively earned 22 billion dollars in revenue from federal awards, 6 billion dollars of which came from the Defense Department. Traditional defense contractors receive hundreds of billions in awards every year.
"The continued lagging investment by the federal government in startup technologies threatens to curtail the venture-capital boom in defense tech at a crucial time for U.S. competitiveness around warfare as the geopolitical landscape grows ever more unstable," said the Journal.
Defense Department officials have said they want to move more swiftly and be less risk averse when adopting commercial technologies, and that their own entrenched bureaucracy can get in the way. Lawmakers have pushed the department to embrace innovation, noted the newspaper. ■
