In April, Secretary of Defense Ash Carter asked the young and enthusiastic entrepreneurs of Silicon Valley to consider focusing their time and attention on the government’s toughest problems. However, while doing so would pay richly in personal satisfaction, it is a questionable business decision and with the possibility of a government shutdown on the horizon, the one business reason why a young, resource-constrained tech company would choose to work with Uncle Sam may be gone.
Working with the government has always meant slim margins, delayed payment, and possible jail time if you make a mistake during the complex sales process. But it also meant a long term, stable revenue stream with a trustworthy client and that predictability encouraged many small businesses to focus on government, which in turn enabled them to grow develop innovative products for both the public and private sector.
A shutdown now would cause even greater damage because now more than ever the United States is dependent on the success of American entrepreneurs for our global standing. China is hungry for new ideas and Beijing has the capital to invest in emerging technology; in America, by contrast, the government may be the least attractive customer. The OPM hack, Healthcare.gov, and the management of VA medical records are all reminders that we desperately need to support the private sector, especially those companies working on cybersecurity, agile development and manufacturing, and systems modernization.
Right now an entrepreneur in Silicon Valley and a researcher in Boston are coming up with the next great big data tools that could be used to beat the stock market or identify terrorists. Their team is small, their funding is shrinking, and they only have the resources to pursue one option. They know Wall Street will pay on time, while it looks like Capitol Hill will be closed for business. Which one would you choose?
Orazem is the CEO of Eastern Foundry, an incubator, accelerator, and services provider for government contractors and emerging technology companies. He is also a fellow with the Truman National Security Project.