Dan Goure
There is a myth that has captivated many senior business leaders, veteran investment analysts and even leadership in the Department of Defense. The fable is that the source of innovation that will drive the U.S. economy and be increasingly important to the effectiveness of the U.S. military is to be found in small startup companies, particularly those involved in the IT space. Silicon Valley is held up as the wellspring of innovative thinking. Businesses, venture capitalists and government acquisition officials are all on the hunt for the next Apple or the follow-on to the iPhone. The Pentagon became so captivated by this thought that the last Administration created a special organization, the Defense Innovation Unit Experimental, or DIUX, specifically to encourage small, high-tech private sector companies to work on cutting edge defense problems.
The reality is that large, well-established companies often are better sources of transformative innovations than small firms. Also, when it comes to moving the needle for large companies and institutions such as the U.S military, it takes more than just having a good idea or even a neat technology. Ideas that seem good on paper or work in the laboratory often fail when taken to the marketplace. Frequently, traditional companies are able to take an idea or a new piece of technology and employ it in innovative ways that transform critical sectors of the U.S. and global economies.
http://nationalinterest.org/blog/the-buzz/ups%E2%80%99-innovation-culture-model-industry-defense-21995
