Pentagon to invest $75 million in local tech industry

In a bid to fortify United States security and manufacturing, the Pentagon and a consortium of partners are making a $171 million bet that Silicon Valley can emerge as the global leader in the nascent field of flexible hybrid electronics. Announcing the initiative Friday at the NASA Ames Research Center, U.S. Defense Secretary Ashton Carter pledged that research into the technology would be headquartered in the South Bay as part of a renewed effort to strengthen ties between the country’s military and its private tech sector.

A press conference to announce the new partnership was held in a symbolic location, the cavernous wind tunnel known as the National Full-Scale Aerodynamics Complex, which has long been used to test both military and civilian aircraft. The event was Carter’s second trip to the Midpeninsula since taking office earlier this year, and he pointed out he was the first U.S. defense secretary to visit the area in almost 20 years.

The U.S. military had a storied history of nurturing technologies that later changed the world, including early research into integrated circuits, packet network systems and computer voice recognition. Carter harkened back to that history to explain why the military needs to make a new push to recruit tech talent and promote innovation.

“I’ve been pushing the Pentagon to think outside our five-sided box and invest in innovation here in Silicon Valley and in tech communities across the country,” he said. “The government helped ignite the spark, but these were places that helped nurture the flames.”

Carter kicked off his new outreach to the tech community earlier this year in a speech at Stanford University where he announced the creation of a new office called the Defense Innovation Unit Experimental. The new office, headquartered at Moffett Federal Airfield, is designed to be the Pentagon’s liaison for working with local corporations and entrepreneurs.

In that speech, Carter said that the U.S. military had neglected to maintain ties with the tech sector as it focused on wars in Afghanistan and Iraq.

To revitalize that partnership, Carter on Friday announced the Department of Defense would invest $75 million in a consortium of 162 companies, universities and nonprofits to research flexible-hybrid electronics. Those partners include many of the big names in the area, such as Apple Inc., Lockheed Martin and Stanford University. That seed money would be matched and exceeded by investments from other public agencies and private organizations interested in the flexible-hybrid field, he said.

The new technology holds huge potential. Flexible-hybrid electronics refers to sensors and other electronics produced so they can stretch, bend and be shaped to fit a particular use. That ability holds the promise to open up a wide range of new products across fields, such as computers woven into clothes, cameras housed in contact lenses, and “smart bandages” that can monitor wounds and detect infections. More uses for the technology would surely be discovered as the research develops, Carter said.

Drawing a contrast with past U.S. innovation that ultimately was outsourced overseas, Carter pledged that the government’s investment would go toward establishing a domestic manufacturing hub for FlexTech products.

A lineup of Bay Area political heavyweights followed Carter to cheer the announcement, including local U.S. representatives Anna Eshoo, Zoe Lofgren and Mike Honda. Lofgren pointed out that the local tech companies and national security agencies have had a rocky relationship over recent years, particularly over revelations about domestic spying. But that disagreement shouldn’t tarnish this new partnership, she said.

“It’s true: There has been a lot of suspicions in the Valley related to certain NSA activities,” Lofgren said. “This is new day. It doesn’t relate to encryption. It relates to manufacturing; it relates to using new technologies in a way that’s smart. It’s important we celebrate this new day with (Department of Defense).”