The Defense Innovation Network – Realizing North Carolina’s Leadership Potential

By Scott Dorney, Executive Director of the North Carolina Military Business Center, and Richard Kristof, COO of TriHelix Investments; Members, North Carolina Board of Science, Technology & Innovation.

Any way you look at it, behind the y’alls and the drawls, there’s no denying that North Carolina is a pretty brainy state — we are home to some of the top universities in the nation, and by the most recent indicators, ranked in the top 10 states for both academic (7th) and business (10th) research and development [Tracking Innovation, 2021]. This innovation is driven strongly by small business ideas, with North Carolina similarly receiving the 10th most federal Small Business Innovation Research (SBIR) and Small Technology Transfer (STTR) awards of all US states and territories in 2021. Our influence is particularly apparent in the life sciences sector, for which North Carolina is renowned for innovation, as we ranked 3rd nationwide for SBIR/STTR awards sponsored by the Department of Health and Human Services (HHS) in 2019. In fact, while HHS has sponsored 28% of SBIR/STTR awards across the program’s history (1983 – 2021), a full 61% of North Carolina’s SBIR/STTR awards have come from HHS; an overperformance twice over [SBIR/STTR Reports].

At the federal level, HHS has been surpassed only by the Department of Defense (DoD) for small business investment, sponsoring 50% of SBIR/STTR awards from 1983 – 2021 [SBIR/STTR Reports]. The defense projects span areas of focus far beyond just military applications, as plenty of ideas are valuable outside the battlefield, such as high-resolution instantaneous weather tracking, human brain tissue modeling, and even a personal generator which weighs a fraction of battery packs providing equivalent power. And as always, innovation breeds innovation and investment breeds investment, so successful DoD-funded businesses stimulate the broader economy in the same way that life sciences R&D has transformed North Carolina into a national leader in that sphere.

However, our overperformance in HHS awards carries a shortfall in awards from some other sponsoring agencies, most notably DoD. Only 26% of North Carolina’s historic SBIR/STTR awards have come from DoD (ranking NC 20th in the nation), indicating an underperformance nearly as strong as our overperformance with HHS, though the DoD funding pool is nearly twice as large [SBIR/STTR Reports]. This might come as a surprise to many, with Fort Bragg (potentially to be renamed Fort Liberty) being the largest military base in the nation and North Carolina hosting the 4th most active-duty and reserve personnel behind California, Virginia, and Texas [Advancing Defense Innovation, 2022]. There is clear untapped potential for the Tar Heel State to become a leader in yet another realm of technological development — the defense innovation economy.

Realizing this opportunity, the North Carolina Board of Science, Technology & Innovation (BSTI) convened the Defense Innovation Task Force, a group of experts who evaluated the current level of DoD engagement among North Carolina businesses and composed a list of actionable recommendations to address the current underperformance. The findings of this task force comprise the newly proposed Defense Innovation Network (DIN) — a targeted, strategic plan to incentivize and assist NC companies in submitting high-quality applications for, and advancing innovation with, DoD funding. If provided with sufficient resources and coordination from high-level State organizers, the sky is the limit for great North Carolina innovators in the defense sector.

Furthermore, with the broader industrial focus of DoD projects, there is prime opportunity for rural and underserved counties in North Carolina to receive a significant windfall from this new initiative. While health and biopharmaceutical R&D has been more or less limited to the Research Triangle Park region due to the requirement for highly specialized expertise and equipment, the DIN can engage industries all across the state, especially in the rapidly growing Charlotte metro area and along the I-85 Innovation Corridor. Many of North Carolina’s most successful DoD-funded SBIR/STTR recipients have come from this area already, including Corvid Technologies and United Protective Technologies. We hope that successful implementation of the DIN will allow us to tell the stories of many more such companies in the near future!

If you or your company are interested in this initiative, stay tuned for more to come regarding details of the DIN in the coming weeks, as this is just the teaser for a multi-part series of posts chronicling the findings and recommendations of the Defense Innovation Task Force. In the meantime, contact your legislators to express your support for this initiative and to explain how it will benefit your business. After all, these are your great ideas that can be made into reality!

More Information:

Scott Dorney and Richard Kristof are a members of the North Carolina Board of Science, Technology & Innovation. Mr. Dorney serves as Executive Director of the North Carolina Military Business Center, and Mr. Kristof serves as Chief Operating Officer at TriHelix Investments.

More information on the NC Board of Science, Technology & Innovation can be found at https://www.nccommerce.com/about-us/boards-commissions/board-science-technology-innovation.

References

Defense Innovation Task Force | North Carolina Board of Science, Technology & Innovation. (2022). Advancing Defense Innovation – Increasing U.S. Department of Defense (DoD) Funding for North Carolina Small Business Technology Development and Commercialization. Raleigh, NC: North Carolina Board of Science, Technology & Innovation.

Office of Science, Technology & Innovation | North Carolina Department of Commerce. (2021). Tracking Innovation – North Carolina Innovation Index. Raleigh, NC: North Carolina Department of Commerce.

SBIR/STTR Reports. Retrieved from SBIR/STTR – America's Seed Fund: https://www.sbir.gov/reports

Thanks to Joshua Reding, NC STEM Policy Fellow in the North Carolina Department of Commerce, Office of Science, Technology & Innovation, and PhD Candidate in Astrophysics at UNC – Chapel Hill, for his research and writing assistance.