NextGen Strategist NextGen StrategistNextGen Strategist
Alan Pentz on building new strategies in an era of disruptive change and rapidly advancing technology.

Agencies Can Seed Future Success With Creative Investment


For several decades, government investment in research and development has been on a downward trajectory. Federal R&D spending now accounts for just under 1 percent of GDP versus 2 percent for private sector R&D. As a result, it is more important than ever for government to partner with the private sector and leverage its investment. In fact, the most successful R&D programs focus on creating communities of actors from academia, the commercial sector, and at times even hobbyists, who can work together to revolutionize technology.

This approach has several advantages. Government funding can seed a topic area and attract attention and effort from private industry and academia. For example, the Defense Advanced Research Projects Agency followed this strategy with its DARPA Grand Challenge. Over several iterations in 2004, 2005, and 2007, DARPA sponsored a driverless car challenge, first in the desert and later in an urban environment. It didn’t go well initially. No team could even qualify in the first round. No car made it more than than 7.5 miles. However, very quickly the technology developed.

DARPA tweaked the criteria and in the end spawned an industry that now looks like the future of transportation. Companies like Uber and Lyft and Ford are exploring ride hailing services with autonomous vehicles that could eliminate the need to own a car, thus reducing carbon emissions and traffic congestion. Tesla already has a driverless capability operating in its cars right now.

We went from a car that traveled 7.5 miles in a desert to a car driving itself down the George Washington Parkway in live traffic in 11 years. DARPA effectively seeded the market with its competition. It rewarded a few teams to keep them going but also attracted other teams who used their own resources. It iterated and accepted failures along the way. By providing focus and proofs of concept, it was able to build the critical mass to attract large commercial R&D investments. Now we are at a transformational moment and it was done at a fraction of the cost and with a far broader set of contributors than a wholly government-driven effort could have supported. DARPA is now attempting a similar approach with its Robotics Challenge.

The rise of prize competitions across the government is a promising sign. However, programs should make sure they have thought through how to build a sustainable community around their efforts. More successful efforts will allow for iteration and adjust over time. They will seek to bring in outside players who might not actually receive funding from the government and they will work to create an industry rather than just a one-off widget.

(Image via Wichy/

Alan Pentz is a partner and co-founder of Corner Alliance, a Washington-based consulting firm that focuses on helping government clients build strategies to stay relevant in and capitalize on today's shifting technological landscape. He is a former Capitol Hill staffer and holds an MBA from the University of Texas at Austin. Contact him at, or follow him on Twitter at @apentz

Close [ x ] More from GovExec