Startups should absolutely work with governments to support defense projects.

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In these times of heightened global tensions and volatility, I believe startups can play a critical role in our defense, space, and homeland security ecosystem by bringing the latest innovation to public institutions, some of which are surprisingly lagging behind.

Start-ups and investors active in the sector are uniquely positioned to support Western defense efforts and the mission to keep our societies safe. Let’s not beat around the bush: Right now, we are already locked up hybrid warfare with Russia, a nuclear-armed superpower, while tensions with another, China, simmer just below the surface. Despotic regimes threaten our values ​​and way of life, and few would predict that this will change anytime soon.

Yet despite all this, much of the tech industry and venture capital has shown little inclination to engage with the defense establishment. Before Russia’s invasion of Ukraine, over dinner with friends and co-workers, he risked harrowing disapproval (and far worse) by saying he thinks startups should work with the Pentagon, NATO and Western governments in general. Today you largely get a very different response: murmurs of assent.

The latest and most powerful technologies offer an advantage to those who create and own them, as we have seen in some of the Western firepower deployed in Ukraine, along with Innovation on the Ukrainian battlefield. The brutal truth is that by resting on our laurels, the West has allowed those who wish to harm us to catch up, and in some casesthey are beyond our capabilities, and the tech industry is partly to blame.

For example, in 2018, thousands of googlers signed a letter to his boss, Sundar Pichai, stating that “Google should not be in the war business.” Specifically, they were protesting their employer’s involvement in a US Department of Defense initiative, Project Maven, which used Google’s AI tools to analyze military drone imagery. “Building this technology to assist the US government in military surveillance, and the potentially lethal results, is not acceptable,” they wrote.

This uncompromising and combative stance ultimately led to the decision of Google management do not renew his lucrative Maven contract, and soon after also withdrew from the race for the Pentagon’s cloud computing contract known as the Joint Enterprise Defense Infrastructure (JEDI) cloud, reportedly worth $10 billion over ten years.

Google employees weren’t the only ones confronting their bosses over perceived collaboration with the Trump administration, which was widely vilified in progressive-leaning tech circles. Around the same time, Microsoft employees called CEO Satya Nadella to stop working with Immigration and Customs Enforcement (ICE), Amazon workers protested development of your company’s surveillance technology, while Salesforce employees signed a petition calling on its leaders to “re-examine” the company’s contract with the US Customs and Border Protection (CBP).

What a difference a few years makes. Fast forward to 2022 and a combination of COVID-19 and its legacy, stressed and unstable global supply chains, Russia’s war with Ukraine, the first threat of food insecurity in the US or the West since WWII. and rising tensions with China have prompted a sharp rethinking by much of the tech industry and venture capital about their responsibilities to government.

Today, in stark contrast to most other verticals, investment in aerospace and defense startups is increasing. Between January and October 2022, according to PitchBookVC invested $7 billion in 114 aerospace and defense technology deals, putting the sector on a trajectory to surpass 2021’s record total of $7.6 billion. In 2018, venture capitalists invested just $1.4 billion in those industries. (Part of this, PitchBook notes, may be due to the fact that defense and aerospace are considerably more resilient to the downturn than, say, consumer or enterprise products.)

I am immensely proud that Techstars is one of the most active investors in this category. With nearly 100 overall investments in aerospace, defense and space technology, we are one of only three venture capitalists to have participated in more than 20 space start-up deals since 2000, while 25% of companies Selected for the 2022 NASA Small Business Innovation Research Contracts were Techstars-Supported Companies. One of our portfolio companies, aerospace slingshot recently closed a $40.8 million Series A-2 round of financing. His clients include the US Air Force, the US Space Force and NASA.

However, there is a lot of ground to recover. a blog post of the defense technology company Anduril that was quoted in the information put it this way:

“Despite spending more money than ever on defense, our military technology remains the same. There is more AI in a Tesla than in any US military vehicle; better computer vision on its Snapchat app than on any system the Department of Defense owns; and, until 2019, the US nuclear arsenal ran on floppy disks.

The recent relative calm convinced us, wrongly, that we lived in a stable, post-conflict world, where threats to our way of life and the maneuvers of bad actors could be ignored or somehow disappeared. In this scenario, much of the Valley could convince itself that it could refuse to make products designed to harm and kill (even when that’s not their stated goal). Such stances now seem naive and idealistic at best; Postures in the worst case.

In 2018, the hashtag #TechWontBuildIt was used to protest Big Tech government contracts. Not only must we build, but there is little time to waste.