Technology Domain Awareness

The Department of Defense (DoD) Information Analysis Centers (IACs) program is embarking on a new initiative to align the rapidly changing commercial technology marketplace with defense capability needs. The initiative, called Technology Domain Awareness, is the first serious DoD effort I have seen to collect, synthesize, and promulgate commercial (non-defense) R&D and product information to enhance military acquisition decision making and innovation practices.

http://iac.dtic.mil/tech_aware_domain.html

Technology Domain Awareness (TDA) is the effective understanding of anything associated with technology that could impact national security. 

It is predicated on timely, relevant, and accurate knowledge of the “technology commons” – those areas where global leadership in technology development and application are increasingly spread across multiple nations and non-state interests.  As defense-relevant innovations increasingly occur in commercial markets, the IACs’ TDA efforts seek to expand awareness and application of commercial and non-government investments to enable better, cheaper, and faster Defense capability development. 

Dead Drop

marvels-agents-of-shield-slice

The first episode of Marvel’s Agents of S.H.I.E.L.D. depicts an encryption scheme that incorporates a user’s GPS position as part of the private key. This idea started me thinking about a similar application of the Flux app, where information can be clandestinely tagged to a specific scene, surface, or object in the physical world and only be accessed by an individual (operative?) visiting the specific location and producing the appropriate credentials – kind of like updating the CIA’s dead drop idea for a digital age… Maybe we should be talking to In-Q-Tel and not just Sand Hill Road.

The Defense Innovation Imperative | Small Wars Journal

SWJ just published an article I wrote on the strategic imperative for improving how DoD innovates. Check it out!

The Defense Innovation Imperative | Small Wars Journal.

Augmented Reality and Big Data

Big Data is an aggregation of Small Data, that is, all of the exhaust that individuals generate as a result of their increasingly digital lives. The way that I define Smart Data is around the “contextualization” of Big Data to provide actionable information to support specific decisions. Big Data has just as much to offer individuals as it does governments and large corporate interests. But I am highly skeptical that the average consumer will be willing to engage Big Data (or even their own Small Data) in a general way until we develop tools that make this data a more implicit and natural part of their everyday decision making processes. The promise of Augmented Reality (AR) is to provide a highly accurate method for people to register and visualize their digital record (transactional data, social data, personal media, etc.) in the world. To the extent that we can align Big Data content with the natural sense making of AR, Big Data becomes an immediate and relatable way for consumers to extend personal relevance to the places and things around them.

Bitcoin. Why?

BitCoin-Dollar-Free-Image

Having casually watched the Bitcoin buzz over the last several months with some fascination, I have to say that I am in the camp of the highly skeptical as to what if any public good is being served by unregulated virtual currency. But don’t interpret my skepticism as disapproval per se. I continue to be interested in the Bitcoin experiment relative to what it can potentially teach us about enhancing the efficiency of conventional currency systems.

First things first. What is currency?

My working definition refers to currency as a stable, secure, and fungible medium of exchange. The Economist notes that currencies need not be physical objects, but are stores of value subject to trading between nations in foreign exchange markets, which determine the relative values of the different currencies (The Economist, Guide to Financial Markets). By this definition, currency constitutes a symbolic vehicle by which value can be traded in the furtherance of some economic transaction – a vehicle that has evolved over three millennia to its present form.

At the dawn of human civilization, currency consisted of notes and other artifacts that implied ownership of some underlying good. Thus currency attested to some property holding and allowed this holding to be traded without the logistical burden of physically transferring the property between parties. Some time later, civilization gave rise to the innovation of coinage – devices representing a standard mediating value – which enabled economic transactions to be greatly simplified and contributed to the explosion of commerce. Then came paper, which introduced new efficiencies of scale, opened up opportunities for loans of gold and silver at interest, and ultimately led to the creation of modern financial markets.

Which brings us to today. The interesting question raised by Bitcoin and other forms of digital currency is whether moving money around electronically should be treated any differently from handling paper money. Peer-to-peer paper money transactions are free, secured by means of robust anti-counterfeiting features, and guaranteed by the full faith and credit of national economies. Should digital transactions be any different?

The economic rationale for moving from paper to digital currency is to lower the “friction” of currency-based transactions. To the extent that this is a compelling rationale, I for one am prepared to take for granted the digital-future of currency. But this still begs the question as to whether Bitcoin and other extra-governmental digital currencies have a role to play in this reimagined future. As a hip new alternative to PayPal, I can see some room in the marketplace for Bitcoin, but as an alternative to conventional currency systems, I am less than sanguine.

Bitcoin does have at least one very real advantage particularly with respect to online commerce, namely, lower consumer transaction costs. Then there’s its intrinsic appeal to the libertarian-minded, owing to the anonymous (opaque might actually be a better word) and unregulated nature of Bitcoin transactions.

But these benefits are tempered by spectrum of issues that undermine the efficacy of the Bitcoin platform as a credible alternative to conventional currency systems. The unregulated nature of Bitcoin, seen as an advantage by some, is fertile ground for the creation of a speculative market where superusers can capitalize on wild swings in the value of the currency often to the detriment of the uninitiated. It has neither intrinsic value nor the backing of the full faith and credit of a stable national economy. It’s dubiously secure, subject to a convoluted set of rules that could be gamed by criminals and superusers. From a practical standpoint, there’s a limited market for Bitcoin among purveyors of goods and survives due to the potential for dramatic shifts in value. And lastly, let’s not forget that we still live in a world where hard currency has a role to play, which makes Bitcoin at best a partial solution. In total, all of these factors make Bitcoin a highly inefficient alternative to legacy currency systems and digital payment options.

As an honest to God currency, Bitcoin leaves a lot on the table. I would go so far as to argue that it’s not really a currency at all – at least not in any conventional sense of the word. But does it lower the friction of economic transactions in some material way?

Maybe. And this is where the Bitcoin idea shows potential to positively influence standing currency systems.

Fifty years ago, economic transactions were predicated on physical media (e.g. paper, coinage, etc.). Today, the dominant mode of commerce and exchange is electronic. But this evolution has done little to influence our currency systems, which are still reliably tactile. The void has been filled by a range of electronic money transfer and payment “services” that facilitate the flows of currency required to underwrite the modern digital economy.

To the extent that currency is the medium of financial interaction and financial interaction is increasingly (if not predominantly) digital, it’s worth taking a step back and considering whether national currency systems should take out the middlemen and embody electronic forms of conveyance.

Federal R&D’s Double Bottom Line

I wrote the following article for a national technology blog relating the opportunities and challenges of sequestration budget cuts for the American R&D enterprise. But in the midst of editing, Congress went and passed a budget deal in December 2013 altering many of the particulars. Rather than discard my original manuscript, however, I think there are several important points worth sharing. The bottom line is that there is no near-term future that I can envision where Federal R&D spending won’t decrease in relative terms. And this new reality demands that we rethink the role of Federal R&D investments as part of the larger national R&D ecosystem lest we risk eroding the foundation of our national competitive advantage: technology innovation.

Federal R&Ds Double Bottom Line

The ongoing Federal budget battles in Washington, DC and the threatened reductions in R&D spending pose a real threat to segments of the early stage innovation economy. Whether and how the public and private sectors can come together to realize new synergies and mitigate the near term effects of the budget downturn will dramatically impact the long term innovation posture of the US.

The State of the Union

The US Federal R&D enterprise has historically played a foundational role as a catalyst for seeding new technologies that are in the public interest. Federal R&D funding can broadly be broken down into two categories. Basic research funding focuses on extending scientific understanding for the ultimate advancement of technology across a broad spectrum of possible applications. While its complement, applied R&D funding, underwrites specific innovations and applications in the public interest. Today the Federal government funds some 30% of all R&D and 50% of all basic research in the US. But this national commitment to the advancement of technology is under increasing pressure due to Congressional budget wrangling as manifested in the Budget Control Act of 2011 with its large Federal spending cuts – otherwise known as sequestration.

Applied R&D funding has traditionally gone towards the development of technologies for which known outcomes are sought in the fulfillment of internal agency prerogatives. In recent years, however, there has been increased recognition on the part of the Administration and lawmakers as to the substantial indirect benefit of government-funded, dual-use technologies to the nation’s high tech economy. But irrespective of whether the R&D was undertaken on behalf of internal agency requirements or broader national economic development priorities, the return on the government’s applied research investment can be measured on the scale of such innovations as GPS, mobile telephony, and the Internet.

What does sequestration mean?

The American Association for the Advancement of Science estimates that Federal R&D spending cuts resulting from sequestration will be approximately $60 billion for the period 2013-2017, and the Information Technology and Innovation Foundation (ITIF) estimates that R&D cuts over the full nine year period of sequestration will approach $100 billion. But that’s only part of the story. The ITIF further contends that sequestration will result in a total R&D funding impact of $330 billion from 2013-2021 compared to a baseline where Federal R&D spending remains constant relative to the larger economy.

Projected Annual R&D Expenditure Shortfall Resulting from Sequestration (millions, USD, constant 2012); courtesy of ITIF report, “Eroding Our Foundation: Sequestration, R&D, Innovation and U.S. Economic Growth”

Projected Annual R&D Expenditure Shortfall Resulting from Sequestration (millions, USD, constant 2012); courtesy of ITIF report, “Eroding Our Foundation: Sequestration, R&D, Innovation and U.S. Economic Growth”

Putting these numbers in perspective, the National Venture Capital Association estimates the average size of the annual venture capital investment in the US for the period 2000-2010 to be just above $20 billion per year. This means that the Federal R&D spending cuts mandated by sequestration are equivalent to roughly half the size of the total private venture economy.

Doing More with Less

Regardless of your political stripe, sequestration has surfaced an important national issue. In an increasingly competitive global economy, how can the US optimize public and private R&D spending to simultaneously address the needs of government and economic competitiveness? As year over year Federal R&D spending is currently at risk of a protracted decline, the imperative to identify novel concepts that capitalize on explicit synergies between the public and private sector to increase the return on R&D investment is more necessary than ever.

On the applied R&D front, the public-private R&D ecosystem is evincing signs of increased collaboration to bring high potential innovations to market. Within the Department of Energy, the Advanced Research Projects Agency – Energy funds early stage energy innovations based in part on the commercialization potential of the underlying technologies. Meanwhile, the Department of Defense (DoD) has experimented with a framework called the Defense Venture Catalyst Initiative (DeVenCI) that aims to speed the adoption of promising commercial technologies and promote broader commercial support of the DoD supply chain through enhanced information sharing and pilot opportunities. And the Intelligence Community’s non-profit venture fund In-Q-Tel (IQT) partners with industry through direct investment in innovative technology solutions.

But these initiatives don’t go nearly far enough. Federal applied R&D investment is a critical strategic resource that can and should be leveraged in a deliberate manner to increase the efficiency of the national R&D enterprise. Increased information sharing between government and industry through organizations like the DoD Information Analysis Centers will reduced redundancy and increase competition  by promoting a shared understanding of the technology white space where future R&D investments should be concentrated. Federal agencies can also work proactively to lower barriers to entry that sideline many segments of the high tech economy. These barriers include both the complex rules that govern industry-government collaboration and the regulatory hurdles that impede the large scale adoption of promising new innovations in heavily regulated industries like energy.

On the applied R&D front, success is measured in the transition of technologies to applications and ultimately to sustainable markets. In today’s constrained budgetary environment, the future competitiveness of the national high tech economy demands that Federal agencies invest with an eye towards market scale outcomes and not just narrow internal requirements.

Mav6 Fluxes Forward

Mav6 is in Flux!

Mav6 is in Flux!

We are well past due for an update on the latest happenings at Mav6. Rest assured that we have been working diligently to try to make sense out of what is perhaps the most stark defense innovation environment since the draw-down of the early 1990′s. Much to our disappointment, the prevailing wisdom seems to have shifted in the direction of “spend less” often to the exclusion of “spend smarter,” which is to say that defense innovation programs are really taking it in the shorts these days.

So, where does that leave a company like Mav6? How does a defense technology firm built around the innovation imperative survive the precipitous decline in the defense innovation market? Just like every other company in the defense space, we have aggressively redefined our cost structure to accommodate the new fiscal realities. When strategically beneficial, we have spun-off lines of business like mobile and Modeling and Simulation (M&S), creating an opportunity for  lean new companies to emerge and thrive. One such company, Kopis Mobile, is redefining mobile computation for edgefighters by offering a portfolio of tools for enhanced situational awareness. Kopis recently completed a successful fundraising round and is seeing significant customer interest in its new tactical motion video management platform.

In addition to the above, Mav6 has retained certain consulting engagements focused on our core expertise in defense systems, emerging threats, and biometrics and, with the aforementioned divestures, has successfully structured our rates to compete on a more competitive cost basis. One of the unfortunate realities of the broader Federal budget uncertainty over the past two years is a dramatic slowing of the contracting sales cycle. We have bid a number of very exciting opportunities over the past twelve months that, once awarded, will really jump start our consulting practice.

Saving perhaps the best for last, we have been investing over the past year in an exciting new dual-use technology called Flux that allows users to virtually publish all kinds of digital content to specific scenes, surfaces, and objects. Flux is a new kind of hyper-locative augmented reality technology that overcomes the limitations of GPS relative to the precise geo-registration of digital content. We initially developed the technology in response to the need for enhanced real-time image processing techniques to “stitch” content derived from many different sources into composite views of the world. In the wake of the Boston Marathon bombing, we saw private citizens pool their photos in an effort to reconstruct the scene and provide clues to authorities. With Flux, we make it possible to automate this crowdsourcing behavior by combining images captured from different sources, at different locations, and from different viewing angles to create persistent, composite views. Users can then play this content back like a movie to reveal the memory of a place. Pretty exciting stuff.

Given the current uncertainties in the defense market, Flux also represents a meaningful opportunity for Mav6 to diversify outside of our traditional revenue base. In partnership with a Canadian-based product design firm, Normative, Inc., we have launched a company called SMLR to explore commercial and consumer applications of the Flux technology. Whereas Mav6 continues to own the exclusive rights to Flux for defense and public safety applications, we are excited to partner with Normative to capitalize on the significant consumer potential of the product. Be sure to register on the SMLR website if you’re interested in participating in the Flux Beta program. We’d love to have your feedback.

Make no mistake, it’s a tough market out there for defense companies, but we are investing wisely and working diligently to make sure that Mav6 is positioned for continued success in the future!