Aerospace giant Lockheed Martin and MIT International Science and Technology Initiatives (MISTI) announced on Sunday the creation of the MIT-Lockheed Martin Seed Fund, promoting collaborations between the Massachusetts Institute of Technology and universities and public research institutions in Israel.
The fund, which will also operate in Germany during its pilot period, will be sponsored by Lockheed Martin to the value of $150,000, and will support two to four early-stage research projects in Israel…
Collaborating faculties will also have the opportunity to benefit from Lockheed Martin facilities both in the US and Israel.
That was from the Jerusalem Post.
Lockheed Martin and other big prime contractors have serve a very important role in transitioning technology to the Department of Defense. Only they have the scale, experience, and government relationships to win major contracts as lead systems integrator. More to the point, their specialty is regulatory compliance and marketing programs to the government. They are basically the only firms equipped to have large amounts of government money flow throw them.
With that privileged position, the big defense firms also have unique access to emerging technologies and teams. Not only can they invest or buy out these innovative companies, the primes also represent the entrant’s biggest clients. Big defense primes are able to subcontract to these firms, insuring them revenues and the like. As investors or even owners of those new innovative firms (e.g., subsidiary), the big defense primes not only make a profit on top the subcontracted work delivered at price, they also earn a return on the growth and profitability of the new firm that they are granting favor to.
You hear a bit about how the government is trying to contract directly with the small innovative firms, such as the organization formerly known as DIUx and Air Force’s pitch day. They have workarounds to get these guys past the regulations, such as CSOs and OTAs. But then these firms would face major challenges to scaling to large dollar programs. I imagine a more stable technology transition path is to do it through the big primes, who as the gatekeepers will reap a good deal of the returns.
Also, remember that uproar in Britain over BAE Systems trying to get into schools to promote STEM (and their own company)? Something tells me Israel won’t have the same reaction to Lockheed.
The establishment of the seed fund builds on Lockheed Martin’s existing educational operations in Israel, including a collaboration with the Education Ministry, Science and Technology Ministry, and the Rashi Foundation to promote STEM-related programs for Israeli children from kindergarten to high school.
Leave a Reply