Page 47 - Federal Computer Week, July 2019

threats from armed drones, for example. By continuously scanning for the latest commercial capabili- ties, JIDO identifies trusted partners and uses rapid acquisition authori- ties to get those solutions to the frontlines quickly.
Building a diverse set of suppli- ers like JIDO’s commercial part- ners is an example of an industrial base partnership — one variant
of a broader portfolio investment strategy that can help source prod- ucts whose use is well understood through innovative acquisition approaches and venture funding arms.
The Defense Department has long relied on a large industrial base to efficiently supply military equip- ment. What’s important today is to broaden the base to include nontra- ditional players and startups that offer exposure to a wide portfolio of innovations.
Accelerators: Early-stage investment strategy
Based on startup accelerator Y Combinator, the World Food Pro- gram awards up to $100,000 to build proofs-of-concept for prom- ising ideas — what Director of Innovation Robert Opp refers to as scale-ups — to a point where they can qualify for outside funding. The accelerator has funded projects including a blockchain-powered aid distribution system for refugees, digital marketplaces for smallholder farmers and artificial intelligence- based image recognition to diag- nose malnutrition.
Such accelerators offer an early- stage investment strategy that pro- vides resources to build less mature products. They speed innovation by offering access to customer insights, sector or category expertise, and real-world environments or assets — and offer governments the opportu- nity to shape an off-the-shelf com- mercial product that fits their needs.
Governments can also get many of those benefits without directly running the accelerator. The Agri- culture Department’s National Institute of Food and Agriculture, for example, funds an external accelerator for high-tech, precision agriculture startups, while several DOD elements — such as MD5 and AFWerx — partner with the well- known Techstars accelerator.
Strategic partnerships: Joint venture investment strategy
To provide humanitarian aid in underbanked regions, the United Nations must set up infrastructure for tracking and management — at significant cost and effort. To tackle this problem, the UN teamed up with an unlikely partner: Mastercard.
It turns out that credit card com- panies have core capabilities that are helpful in aid disbursement: fraud detection, electronic track- ing, digital infrastructure and even marketing. Mastercard’s collabo- ration with the UN helps it moni- tor distribution of welfare grants using a smart card processed by a card reader that can be tethered to an Android device, replacing the manual processes used by local merchants.
When commercial assets like Mastercard’s are mature platforms — making them harder to simply procure — strategic partnerships can create the public equivalent of a joint venture by capitalizing on areas where business and social incentives align.
“When we talk about startup- driven innovation, we think of it as large organizations adopting prac- tices that make startups success- ful,” venture capitalist Evangelos Simoudis said. “One of the practices is significant partnering — knowing whom to partner with and how to develop these partnerships efficiently.”
Open architecture: Platform investment strategy
Health research today can draw on inputs as diverse as genomic data, electronic health records, clinical trial data and patient-generated data from wearables or mobile apps. But this data largely exists in silos due to privacy concerns or interoperability challenges.
To improve access, officials at the National Institutes of Health are pilot- ing the NIH Data Commons, a cloud- based platform where investigators can store, share, access and experi- ment with digital objects generated from biomedical research — speeding hypothesis generation and validation.
This initiative illustrates the fourth investment strategy governments
can use to spin in new capabilities: a platform investment strategy. A public- sector platform strategy makes invest- ments in structures that increase the underlying value of the broader system — what the United Kingdom’s Nesta innovation foundation describes as “government as impresario,” enabling data-sharing and innovation in more nascent areas such as smart cities.
In an operating environment being redefined by technology, government must keep pace or risk consequences for mission delivery. The diversity
of innovation asks that government similarly diversify acquisition strategies — spreading across more suppliers, taking a wider range of bets and infus- ing new capabilities midstream. Public- sector organizations can learn from venture capital firms to diversify and evolve investment strategies to “spin in” these new capabilities. n
William D. Eggers is executive director of the Deloitte Center for Government Insights and Max Meyers is a manager in Deloitte Consulting’s Government and Public Services practice. Their new study is “What Government Can Learn from Venture Capital” from Deloitte Insights.
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