Former U.S. Air Force acquisition chief Will Roper is chairing the Defense Innovation Board’s (DIB) strategic investment capital task force to examine ways to spur public-private partnerships to help field emerging technologies that the Pentagon needs.

“To maintain technological advantage, the DoD must complement the innovative power of the private sector with an approach that makes strategic public investments in critical, emerging technologies, such as microelectronics, advanced computing, biotechnologies, clean energy technologies, and advanced telecommunications,” Heidi Shyu, under secretary of defense for Research and Engineering, wrote in a Dec. 15 “terms of reference” memorandum for the establishment of the task force.

“It is important for the department to evaluate and understand the role of private capital markets in the national security innovation ecosystem,” she wrote. “The DoD has launched several initiatives to incentivize and increase access to, and procure capabilities from, non-traditional, prvately-backed companies. Additional efforts are needed to deliver a strategic and coherent public-private approach to crowd-in private capital and scale capabilities. With [Defense] Secretary [Lloyd] Austin’s recently established Office of Strategic Capital, the department seeks strategic insights and recommendations across a range of issues from the Defense Innovation Board to ensure a holistic and scalable approach.”

The task force is to meet on Feb. 1 as part of the DIB’s winter meeting.

Austin created the Office of Strategic Capital (OSC) on Dec. 1 to aid companies developing vital DoD technologies in receiving private capital to move such technologies into production (Defense Daily, Dec. 1, 2022).

Besides Roper, other members of the DIB’s strategic investment capital task force include Susan Gordon, a director at CACI International [CACI] and a former intelligence official; Reid Hoffman, a co-founder of LinkedIn [MSFT]; and Charles Phillips, a co-founder of the investment firm, Recognize.

The task force is to provide advice to the DIB on successful government partnerships that DoD should expand or be modified, new efforts that the Pentagon could undertake, and critical technology areas that need more private capital “to enable effective long-term U.S. competitiveness, specifically addressing early-stage development through scale-up production for critical supply chain technologies,” per the Dec. 15 “terms of reference” for the task force.

The DIB is to submit its recommendations on strategic investment capital to Austin within six months.

Innovative companies have often contracted with federal agencies outside of DoD, and the Pentagon has said that such firms’ lack of private capital prevents them from moving systems from R&D into production.

DoD said that unlike other offices that rely on grants and contracts, the OSC is exploring credit tools such as loans and loan guarantees to fund companies working to transition technologies.

The types of technologies that typically require long-term financing to bridge the “Valley of Death” between the lab and production include advanced materials, next-generation biotechnology and quantum science, DoD said.

Shyu said that the goal is to have the first OSC deals done early this year. The OSC is part of Shyu’s office and will have an advisory council that includes the under secretaries of defense.