The ReCap: DoD's Office of Strategic Capital

The Secretary of Defense established OSCE last year with really two primary objectives, to attract private capital into critical technologies and scale private investment. And so if we think about the global competition that we're in and we think about the resources the United States needs to bring to bear in order to help scale these technologies from this police prototypes into products, we can't do this alone. We've got to work with our private industry, we've got to work with private capital. And every case we are the marginal dollar, right? The private investors are investing in an area and they don't need our help, right? We certainly, we never see ourselves being anything other than additive to the market. Our strategy is to be one where we invite and empower investors, right? And we think about this not in terms of subsidy but as partnership, of co-investment. Our opportunities with programs like our partnership with the SBA, which has been operating since 1958, is to invite investors to partner with us. It's a choice, it's an option, right? But if you partner with us, we could provide capital, low-cost capital to combine with your investment, right? These are investment funds where we partner together.

And so our framework, we're looking not only at the maturation of the technologies and the maturation of the manufacturing levels, but also looking at the supplier position. When you think about our critical technology areas, the vast majority of those technology areas are actually making investments into things that we do not buy. If the investments are going into the things that we buy, the department has this whole other tool to attract and scale private capital, which is our procurement system. If they go into the things that we don't buy, then we don't have that tool to attract and scale private capital. The team is focused deeply on two things really this year, besides working with our interagency partners like the SBA around the SBIC program. We're focused on one, building the governance for and the structure around thinking deeply about how these new tools can be applied to support the Department of Defense, which includes a number of OSD and service stakeholders, and thinking deeply about our investment strategy.

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