Since the Cold War, America’s technological leadership has provided the U.S. military a qualitative advantage over its adversaries. That edge is now threatened by China’s rapid development of technologies with both civilian and military applications.
U.S. early-stage hardware startups are seriously disadvantaged by a persistent lack of financing. Meanwhile, China has been pouring money into Chinese—as well as U.S. and European—tech startups.
Recognizing this problem, Congress authorized the U.S. Department of Defense to spend $75 million to invest in dual-use hardware startups. However, the Pentagon has proven reticent to embrace a venture capital–style approach, even though research has demonstrated it is optimal for driving innovation.