Boosting Hardware Start-ups

In “Letting Rocket Scientists Be Rocket Scientists: A New Model to Help Hardware Start-ups Scale” (Issues, Spring 2024), John Burer effectively highlights the challenges these companies face, particularly in the defense and space industries. The robotics company example he cites illustrates the pain points of rapid growth coupled with physical infrastructure, demonstrating the different dynamics of hardware enterprises as compared with software.

However, I believe the fundamental business issue for hardware start-ups is generating stable, recurring revenue when relying on sales of physical items that bring in a one-time influx of revenue, but bear no promise of future revenue. Consider consumer companies such as Instant Pot and Peloton, which serve as cautionary tales that rode a wave of virality to high one-time sales and suffered with the failure to create follow-on products to fill production lines and pay staff salaries.

Further analysis of the issues Burer raises would benefit from exploring how the American Center for Manufacturing and Innovation’s (ACMI) industry campus model or other solutions directly address this core problem of revenue stability that any hardware company faces. Does another successful product have to follow the first? Is customer diversity required? Even hardware companies focusing solely on national security face this problem.

While providing shared infrastructure is valuable, more specifics are needed on how ACMI bridges the gap to full-scale production beyond just supplying space. Examining the broader ecosystem of hardware-focused investors, accelerators, and alternative models focused on separating design and manufacturing is also important. The global economy has undergone significant reconfiguration, with much of the manufacturing sector organizing as either factoryless producers of goods or providers of production-as-a-service, focusing on core competencies of product invention and support, or supply chain management and pooling demand. This highly digitally-coordinated model can’t work for every product, but the world looks very different from the golden age of aerospace, when it made sense to make most things in-house or cluster around a local geographic sector specialized in one industry.

Overall, Bruer identifies key challenges, but the hardware innovation community needs a broader conversation on business demands, especially around revenue stability, a wider look at the hardware start-up ecosystem, and concrete evidence of the ACMI model’s impact. I look forward to seeing this important conversation continue to unfold.

Dan Patt

John Burer eloquently describes a new paradigm to strategically assemble and develop hardware start-up companies to enhance their success within specific industrial sectors. While the article briefly mentions the integration of this novel approach into the spaceflight marketplace, it does not fully describe the tremendous benefits that a successful space systems campus could provide to the government, military, and commercial space industries, as well as academia. Such a forward-thinking approach is critical to enable innovative life sciences and health research, manufacturing, technology, and other translational applications to benefit both human space exploration and life on Earth.

The advantages of such an approach are clearly beneficial to many research areas, including space life and health sciences. These research domains have consistently shown that diverse biological systems, including animals, humans, plants, and microbes, exhibit unexpected responses pertinent to health that cannot be replicated using conventional terrestrial approaches. However, important lessons learned from previous spaceflight biomedical research revealed the need for new approaches in our process pipelines to accelerate advances in space operations and manufacturing, protect the health of space travelers and their habitats, and translate these findings back to the public on Earth.

A well-integrated, holistic space campus system could overcome many of the current gaps in space life sciences and health research by bringing together scientists and engineers from different disciplines to promote collaboration; consolidate knowledge transfer and retention; and streamline, simplify, and advance experimental spaceflight hardware design and implementation. This type of collaborative approach could disrupt the usual silos of knowledge and experience that slow hardware design and verification by repeatedly requiring reinvention of the same wheel.

Indeed, the inability of current spaceflight hardware design and capabilities to perform fully automated and simple tasks with the same analytical precision, accuracy, and reproducibility achieved in terrestrial laboratories is a major barrier to space biomedical research—and creates unnecessary risks and delays that impact scientific advancement. In addition, the inclusion and support of manufacturing elements in a space campus system can allow scaled production to meet the demands and timelines required for the success of next-generation space life and health sciences research.

The system described by Burer has clear potential to optimize our approach to such research and can lead to new medical and technological advances. By strategically nucleating our knowledge, resources, and energy into a single integrated and interdisciplinary space campus ecosystem, this approach could redefine our concept of a productive space research pipeline and catalyze a much-needed change to advance the burgeoning human spaceflight marketplace while “letting rocket scientists be rocket scientists.”

Cheryl A. Nickerson

C. Mark Ott

The Naval Surface Warfare Center Indian Head Division (NSWC IHD) was founded more than 130 years ago as the proving ground for naval guns, and later shifted focus to the research, development, and production of smokeless powder. We continue as a reliable provider of explosives, propellants, and energetic materials for ordnance and propulsion systems for every national conflict, leading us to be recognized as the Navy’s Arsenal.

But this arsenal now needs rebuilding to strengthen and sustain the nation’s deterrence against the growing power of the People’s Republic of China, while also countering aggression around the world.

At the 2024 Sea-Air-Space Exposition, the Navy’s chief of operations, Admiral Lisa Franchetti, discussed how supporting the conflict in Ukraine and the operations in the Red Sea is significantly depleting the US ordnance inventory. NSWC IHD is an aging facility but has untapped capacity, and the Navy is investing in infrastructure upgrades to restore wartime readiness of its arsenal. This investment will modernize production, testing, and evaluation capabilities to allow for increased throughput while maintaining current safety precautions.

NSWC IHD believes that an industrial complex of the type that John Burer describes is worth investigating. While our facility is equipped to meet current demand for energetic materials, we anticipate increased requests for a multitude of products, including precision-machined parts and composite materials. Having nearby cooperative industry partners would reduce logistical delays and elevate the opportunity for collaborations and successful technology demonstrations.

Such a state-of-the-art campus would also provide a safe virtual training environment for energetic formulations, scale-up, and production processes, eliminating the risks inherent with volatile materials and equipment. This capability would allow for the personnel delivering combat capability, to paraphrase Burer, to continue to be rocket scientists and not necessarily trainers.

The Navy recognizes the need to modernize and expand the defense industrial ecosystem to make it more resilient. This will require working in close contact with its partners, including Navy laboratories and NSWC IHD as its arsenal. We must entertain smart, outside-the-box concepts in order to outpace the nation’s adversaries. With these needs in mind, exploring the creation of an industrial campus is a worthwhile endeavor.

Ashley Johnson

The growth of the commercial space sector in the United States and abroad, coupled with the increasing threat of adversarial engagement in space, is rapidly accelerating the need for fast-paced development of innovative technologies. To meet the growing demand for these technologies and to maintain the US lead in commercial space activities while ensuring national security, new approaches tackling everything from government procurement processes to manufacturing and deployment at scale are required. John Burer directly addresses these issues and suggests a pathway forward, citing some successful examples including the new initiative at NASA’s Exploration Park in Houston, Texas.

Indeed, activities in Houston, and across the state, provide an excellent confluence of activities that can be a proving ground for the proposed industry campus model in the space domain. The Houston Spaceport and NASA’s Exploration Park are providing the drive, strategy, and resources for space technology innovation, development, and growth. These efforts are augmented by $350 million in funds provided by the state of Texas under the auspices of the newly created Texas Space Commission. The American Center for Manufacturing and Innovation (ACMI), working with the NASA Johnson Space Center, is a key component of the strategy for space in Houston, looking to implement the approach that Burer proposes.

There is a unique opportunity to bring together civil, commercial, and national security space activities under a joint technology development umbrella. Many of the technologies needed for exploration, scientific discovery, commercial operation, and national security have much in common, often with the only discriminator being the purpose for which they are to be deployed. An approach that allows knowledge exchange among the different space sectors while protecting proprietary or sensitive information will significantly improve the technology developed, provide the companies with multiple revenue streams, and increase the pace at which the technology can be implemented.

Going one step further and creating a shared-equipment model, which Burer briefly alludes to, would allow small businesses and start-ups access to advanced equipment that would normally be prohibitively expensive, with procurement, installation, and management wasting time and money and limiting the ability to scale. A comprehensive approach such as the proposed industry campus would serve to accelerate research and development, foster more innovation, promote a rapid time to market, and save overall cost to the customer, all helping create a resilient space industrial ecosystem to the benefit of the nation’s space industry and security.

David Alexander

John Burer outlines how the American Center for Manufacturing & Innovation (ACMI) is using an innovative approach to solve an age-old problem that has stifled innovation—how can small businesses go from prototype scale to production when there is a very large monetary barrier to doing so?

The Department of Defense has particularly struggled with this issue, as the infamous “valley of death” has halted the progress of many programs due to lack of government or company funding to take the technology to the next step. This leaves DOD in a position where it may not have access to the most advanced capabilities at a time when the United States is facing multiple challenges from peer competitors.

ACMI is providing a unique solution set that not only tackles this issue but creates an entire ecosystem in which companies can join forces with other companies in the same industrial base sector in a campus-like setting. Each campus focuses on a critical sector of the defense supply chain (critical chemicals, munitions, and space systems) and connects government, industry, and academia together, providing shared access to state-of-the-art machinery and capabilities and creating environments that support companies through the scaling process.

For many small businesses and start-ups, this can be a lifeline. Oftentimes, small companies can’t afford to have personnel with the business acumen to raise capital and build infrastructure and are forced to have their technical experts try to fill these roles—which is not the best model for success. ACMI takes on these roles for those companies, and as Burer states, “lets rocket scientists be rocket scientists”—a much more efficient and cost-effective use of their talent.

One of the most important aspects of the ACMI model is that the government is providing only a small amount of the funding for each campus to get things started, and then ACMI is leveraging private capital—up to a 25 to 1 investment ratio—for the remainder. If this isn’t a fantastic use of taxpayer money, I don’t know what is. At a time when the United States is struggling to regain industrial capability and restore its position as a technology leader, and where it is competing against countries whose governments subsidize their industries, the ACMI model is exactly the kind of innovative solution the nation needs to keep charging ahead and provide its industry partners and warfighters with an advantage.

Chris Michienzi

Given the global competition for leading-edge technology, innovation in electronics-based manufacturing is critical. John Burer describes the US innovation ecosystem as a “vibrant cauldron” and offers an industry campus model that can possibly harness the ecosystem’s energy and mitigate its risks. However, the barriers for an electronics hardware start-up company to participate in the innovation ecosystem are high and potentially costly. While Burer’s model is a great one and can prove effective—witness Florida’s NeoCity and Arizona State University’s SkySong, among others—it does require some expansion in thought.

To build an electronics production facility, start-up costs can run $50 million to $20 billion over the first few years for printed circuit boards and semiconductors, respectively. It can take 18 to 48 months before the first production run can generate revenue. For electronics design organizations, electronics CAD software can range from $10,000 to $150,000 per annual license depending on capability needs. Start-up companies in the defense sector must additionally account for costs where customers have rigorous requirements, need only low-volume production, and expect manufacturing availability for decades. This boils down to a foundational question: How does an electronics hardware start-up with a “rocket scientist” innovative idea ensure viability given the high cost and long road ahead?

One solution for electronics start-ups is to use the campus model, but it may be slightly different from what Burer describes. Rather than a campus, I see a need for what I call a “playground community.” They are similar in that they provide a place for people to interact and use shared resources. But as an innovator, I like the idea of a playground that promotes vibrant interactions between individuals or organizations with a common goal, be it discovery or play. Along with this version of an expanded campus, electronics companies will require community and agility to achieve success.

Expanded campus. A virtual campus concept can be valuable given the high capital expenditure costs for electronics manufacturing. This idea partners companies that have complementary capabilities or manufacturing, regardless of geolocation proximity. Additional considerations in logistics, packaging, or custody for national security are also needed.

Community. Scientists of all types need a community of supporting companies and partners that have common values and goals and capitalize on each other’s strengths. This cross-organizational teaming will allow them to move fast and overcome any challenge together.

Agility. Given the rapid pace of the electronics industry, agility is vitally important. This will require the company and its team community to be able to shift and move together, considering multiple uses of the technology, dual markets, adoption of rapid prototyping and demonstration, modular systems design and reuse, and significant use of automation in all aspects of the business.

Fostering innovative communities in technology development, prototyping, manufacturing, and business partnerships will be required for the United States to maintain competitiveness in the electronics industry as well as other science and technology sectors. As the leader of an electronics hardware security start-up, I am fortunate to have played a role as the allegorical rocket scientist with good ideas, but I am even more glad to be surrounded by a community of businesses and production partners in my playground.

Nathan Edwards

Having founded, operated, and advised hardware start-ups for more than 25 years, I applaud the American Center for Manufacturing & Innovation and similar initiatives that aim to bring greater efficiency and effectiveness to one of the most important and challenging of all human activities: the development and dissemination of useful technology. The ACMI model, designed to support hardware start-ups, particularly those in critical industries, offers several noteworthy benefits.

First, the validation by the US government of the problems being solved by campus participants is invaluable. Showing the market that such a significant customer cares about these companies provides credibility and encourages other stakeholders to invest in and engage with them.

Second, the “densification” of resources on an industry-focused campus can yield significant cost benefits. Too often, I have seen early-stage hardware companies fail when key people and vital equipment were too expensive or inconveniently located.

Third, the finance arm of the operation, ACMI Capital, can leverage initial government funding and mitigate the “valley of death” that hardware start-ups typically face. This support should offer a smoother transition from government backing to broader engagement with the investment community, a perennial challenge for companies funded by the Small Business Innovation Research program and similar federal sources. Such funding ensures that promising technologies can scale and be efficiently handed off to government customers.

However, while the ACMI model offers significant benefits, it also has potential limitations when applied to industries without the halo effect provided by government funding and customers. When the government seeks to solve a problem, it can move mountains. It is much more challenging to coordinate problem validation and investment in early-stage innovation by multiple nongovernment market participants, with their widely varying priorities, resources, and timelines.

Another potential issue is the insufficient overlap in resource and infrastructure needs that may occur among campus innovators in any given industry. If the needs of these start-ups diverge too widely, the benefits of colocation may diminish, reducing the overall efficiency of the campus model.

Finally, there is the challenge of securing enough capital to fund start-ups through the hardware development valley of death. Despite ACMI’s efforts, the financial demands of scaling hardware technologies are substantial, and without a compelling financial story and the enthusiastic support of key customers, securing sustained investment throughout development remains a critical hurdle.

Given these concerns, some care will be needed when selecting which industries, problems, customers, and start-ups will most benefit from this approach. In this vein, I cannot emphasize enough the need for additional experimentation and “speciation” of entities seeking to commercialize technology.

Still, the ACMI model has already demonstrated success and achieved important progress in enhancing the nation’s defense posture. And the lessons learned will undoubtedly inform future efforts, with successful strategies being replicated and scaled, thus enriching the nation’s technology commercialization toolbox.

I look forward to seeing the continued evolution and impact of this and other such models, as they are vital in bridging the gap between innovation and practical application, ultimately driving technological progress and economic growth.

Terence S. Russell

The American Center for Manufacturing & Innovation’s (ACMI) industry campus-based model, as John Burer details in his Issues essay, is an innovative approach to addressing the critical challenges faced by hardware start-up companies in scaling production and establishing secure supply chains. At Energy Technology Center, we feel that the model is particularly timely and essential given the current munitions production crisis confronting the US Department of Defense and the challenges traditionally associated with spurring innovation in a mature technical field. As global tensions rise and the need for advanced defense technologies intensifies, the ability to rapidly scale up production of critical materials and systems becomes a national security imperative. This model has the potential to diversify, expand, and make more dynamic the manufacturing base for energetic materials and the systems that depend on them. By fostering a collaborative environment, these campuses can accelerate innovation, reduce production bottlenecks, and enhance the resilience of the defense industrial base.

From a taxpayer’s perspective, the value of ACMI’s model is immense. By attracting private capital to complement government funding, the model maximizes the impact of public investment. As Burer points out, ACMI’s Critical Chemical Pilot Program, funded through the Defense Production Act Title III Program, has already achieved a private-to-public funding ratio of 16 to 1, demonstrating the efficacy of leveraging different pools of investment capital. Such a strategy not only accelerates the development of critical technologies but also ensures that public funds are used more efficiently than ever, fostering a culture of innovation and modernization within the defense sector.

However, to fully realize the potential of this model, we must be mindful of the risks and pitfalls in the concept. Private investment follows the promise of a return. Challenges that must be addressed include the requirement for steady capital investment, dependency on government support, bureaucratic hurdles, market volatility, intellectual property concerns, scalability issues, and the need for effective collaboration. Ensuring sustained financial support from diverse sources, streamlining the bureaucratic processes in which DOD procurement is mired, developing robust and adaptable infrastructure, maintaining strong government-industry partnerships, protecting intellectual property, diversifying market applications, and fostering a collaborative ecosystem are all essential steps toward overcoming these challenges.

Challenges notwithstanding, ACMI’s industry campus-based model is a timely and innovative solution to the current dilemmas of the US defense manufacturing sector. By creating specialized campuses that foster collaboration and leverage both private and public investments, this model can significantly enhance the scalability, resilience, and dynamism of the manufacturing base for energetic materials and defense systems. Burer is to be applauded for bringing a healthy dose of old-fashioned American ingenuity and entrepreneurship to the nation’s defense requirements.

Bob Kavetsky

As John Burer observes, start-up companies working on hardware, especially those with applications for national security, face substantial challenges and competing demands. These include not only developing and scaling their technology, but also simultaneously addressing the needs of their growing business, such as developing supply chains, securing manufacturing space that can meet their growing needs, and navigating the intricate maze of government regulations, budget cycles, contracting processes, and the like. This combination of challenges and demands requires a diverse and differentiated set of skills, which early-stage hardware companies especially struggle to obtain, given their limited resources and focus on developing their emerging technology. A better model is needed, and the one Burer identifies and is employing, with its emphasis on building regional manufacturing ecosystems through industry campuses, has significant merits.

Historically, the Department of Defense was the primary source of funding for those working on defense-related technologies. That is no longer the case. As recently noted by the Defense Innovation Unit, of the 14 critical technology areas identified by the Pentagon as vital to maintaining the United States’ national security, 11 are “primarily led by commercial entities.” While this dynamic certainly brings several challenges, there are also important opportunities to be had if the federal government can adapt its way of doing business in the commercial marketplace.

The commercial market operates under three defining characteristics, and there is opportunity to leverage these characteristics to benefit national security. First, success in the commercial sector is defined by speed to market, and the commercial market is optimized to accelerate the transition from research to production, successfully traversing the infamous “valley of death.” Second, market penetration is a fundamental element of any commercial business strategy, with significant financial rewards for those who succeed; consequently, the commercial market is especially suited to rapidly scale emerging technologies. And third, the size of the commercial market dwarfs the defense market; leveraging this size not only offers a force-multiplier to federal funding, but also creates economies of scale that enable the United States and its allies to compete against adversarial nations that defy the norms of free trade and the rule of international law.

Industry campuses apply the proven model of innovation clusters to establish regional manufacturing ecosystems. These public-private partnerships bring together the diverse range of organizations and assets needed to build robust, resilient industrial capability and capacity. The several programs Burer identifies have already demonstrated the value of this model in harnessing the defining characteristics of the commercial market, including speed, scale, and funding. By incorporating this approach, the federal government is able to amplify the value of taxpayer dollars to improve national and economic security, creating jobs while accelerating the delivery of emerging technologies and enhancing industrial base resilience.

Christopher Zember

John Burer presents an innovative approach to supporting manufacturing hardware start-ups. I ran the Oregon Manufacturing Innovation Center for the first six years of its life, and have firsthand experience with hundreds of these types of companies. I can attest: hardware start-ups face distinct challenges with few ready-made avenues to address them.

Expecting “rocket scientists” to navigate these challenges without specialized business support can hinder a start-up’s core technical work and jeopardize its overall success. It is rare, indeed, to find the unicorn that is a researcher, inventor, entrepreneur, negotiator, businessperson, logistician, marketer, and evangelist. Yet the likelihood of success for a start-up often depends on those abilities being present in one or a handful of individuals.

To ensure that the United States can maintain a technological advantage in an increasingly adversarial geopolitical landscape, it is imperative to improve hardware innovation and start-up company success rates. In addition to the ideas that Burer presents, my experience in manufacturing research and innovation suggests the need for open collaboration and comprehensive workforce development. These elements are critical to ensure a cross-pollination of ideas and the availability of trained technicians to scale these businesses.

The American Center for Manufacturing and Innovation’s (ACMI) model represents a very promising solution. Burer’s emphasis on colocating start-ups within a shared infrastructure is a significant step forward. Incorporating spaces for cross-discipline and cross-company collaborative working groups and project teams, along with providing regular networking opportunities, will allow them to share knowledge, resources, and expertise and to cultivate a culture of cooperation. This is best enabled through a nonprofit applied research facility that can address the intellectual property-sharing issue, making problem-solving more efficient and empowering those involved to do what they do best. It not only allows scientists to be scientists, but also helps the investor, the government customer, the corporate development professional, and other critical participants understand their importance within a shared outcome.

The shared infrastructure within ACMI campuses can be further expanded by developing shared research and development labs, prototyping facilities, and testing environments. By pooling resources and with government support, start-ups can access high-end technology and equipment that might otherwise be beyond their reach, thus reducing costs and barriers to innovation. Additionally, open innovation platforms can allow companies to post challenges and solicit solutions from other campus members or external experts, harnessing a broader pool of talent and ideas. Think of this as a training ground to head-start companies that would scale more independently within this ecosystem, while allowing corporate and government stakeholders to more effectively scout for solutions. Such an approach can accelerate the development of new technologies and products, benefiting all stakeholders involved.

The ACMI model thus offers a potent opportunity. It can be applied to any sector where hardware innovation is needed to advance the nation’s capabilities. Incorporating open collaboration will be crucial to enable the best outcomes for technology leadership and economic growth. By incorporating these additional elements, the ACMI model can become an even more powerful engine for driving the success of hardware start-ups, ultimately benefiting the broader economy and national security.

Craig Campbell

John Burer highlights the challenges facing start-ups providing products to the defense and space sectors. More specifically, he lays out the challenges for companies building complex physical objects to obtain the appropriate infrastructure for research, development, and manufacturing. Additionally, he notes the importance of small businesses in accelerating the deployment of new and innovative technologies for the nation’s defense. The article comes on the heels of a Pentagon report that found the US defense industrial base “does not possess the capacity, capability, responsiveness, or resilience required to satisfy the full range of military production needs at speed and scale.”

The imperative is clear. Developing increased domestic research, development, prototyping, and manufacturing capabilities to build a more robust and diversified industrial base supporting the Department of Defense is one of the nation’s most critical national security challenges. Equally clear is that unleashing the power of nontraditional defense contractors and small business is a critical part of tackling the problem.

So how do we do it?

We increase collaboration between government, industry, and academia. Expanding the industrial base to deliver the technologies warfighters need is too large a task for any one of these groups to address alone. It will take the combined power, ingenuity, and know-how of the government, industry, and academia to build a more resilient defense industrial base that can rapidly develop, manufacture, and field the technologies required to maintain a decisive edge on the battlefield.

There is a proven way to increase such collaborative engagements, via the use of consortia-based Other Transaction Authority (OTA), the mechanism the DOD uses to carry out certain research and prototype projects. OTAs are made separate from the department’s customary procurement contracts, cooperative agreements, or grants, and provide a greater degree of flexibility.

Consortia bring to bear thousands of small, innovative businesses and academic institutions that are developing cutting-edge technologies in armaments, aviation, energetics, spectrum, and more for the DOD. They are particularly effective at recruiting nontraditional defense contractors into the industrial base, educating them on how to work with the DOD, and lowering the barriers to entry. This provides an established avenue to tap into innovative capabilities to solve the complex industrial base and supply chain challenges the nation faces.

A George Mason University study highlighted the impact that small businesses and nontraditional defense contractors are having on the DOD’s prototyping effort via consortia-based OTAs. Researchers found that more than 70% of prototyping awards made through consortia go to nontraditional defense contractors, providing a proven track record of effective industrial base expansion. Critically, the OTA statute also offers a path to follow-on production to help bridge the proverbial valley of death.

Consortia-based OTAs are an incredibly valuable tool for government, industry, and academia to increase collaboration, competition, and innovation. They should be fully utilized to drive even greater impact to build a more robust, innovative, and diverse defense industrial base and address critical challenges. Nothing less than the nation’s security is at stake.

Dave Turovsky

I am known in the real estate world as The Real Estate Philosopher, and my law firm is one of the largest real estate law practices in New York City. John Burer’s brainchild, the American Center for Manufacturing & Innovation (ACMI), is one of our clients—and one of the most exciting.

To explain, let’s take look at what Burer is doing. He looked at the US defense industry and saw a fragmented sector with major players and a large number of smaller players struggling to succeed. He also saw the defense industry in need of innovation and manufacturing capacity to stay ahead of the world. Burer then had an inspiration about how to bring it all together. As he explained to me early on, it would be kind of like creating miniature Silicon Valleys.

Silicon Valley started out as a think tank surrounding Stanford University. The thinkers, professors, and similar parties attracted more talented people—and ultimately turned into the finest aggregation of tech talent and successful organizations the world has ever seen.

Why not, mused Burer, do the same thing in the defense industry? In other words, create a campus (or multiple campuses) where the foregoing would come together: thinkers, at universities, as centers of creation; major industry stalwarts to anchor activities; and a swarm of smaller players to interact with the big players. Voila, a mini-Silicon Valley would be born on each campus.

It sounds simple, but this is a tricky thing to put together. Fortunately, Burer is not just a dreamer, but also solid on the nuts and bolts, so he proceeded with logical steps.

The first step was gaining governmental backing. In landing a $75 million contract from the Department of Defense, Burer picked up both dollars and credibility to jump-start his venture. This became ACMI Federal, the first prong of the ACMI business.

The second step was acquiring and building the campuses. These are estate deals and, as real estate players know all too well, you don’t just snap your fingers and a campus appears. You need a viable location, permits, deals with anchor tenants, lenders and investors, and much more. So Burer created another prong for the business, called ACMI Properties.

In the third step, Burer realized that many of the smaller occupants of the campuses would be start-ups, which are routinely starved for cash. So he created yet another prong for the business, called ACMI Capital. This is essentially a venture capital fund to back the smaller players.

Now Burer had it all put together: a holistic solution for scaling manufacturing. The campuses will spearhead innovation, critical to US defense. Smaller players will benefit from being part of an ecosystem focused on a single industry. And investors will be pleased that their investments will have both solid upside coupled with strong downside protection as well.

Bruce Stachenfeld

Let’s be very clear: the US government, including the Department of Defense, does not manufacture anything. However, what the government does do is establish the regulatory frameworks that allow manufacturing to flourish or flounder.

In this regard, John Burer eloquently argues that the DOD needs new acquisition strategies to meet the logistical needs of the military services. Fortunately, at the insistence of Congress, the DOD is finally taking action to strengthen and secure the defense industrial base. In February 2021, President Biden signed an executive order (EO 14017) calling for a comprehensive review of all critical supply chains, including the defense industrial base. In February 2022, the DOD released its action plan titled Securing Defense-Critical Supply Chains.

The American Center for Manufacturing & Innovation (ACMI) is working to address two of the critical recommendations in the action plan, focused on strengthening supply chain vulnerabilities in critical chemical supply, and growing the industrial base for developing and producing hypersonic missiles and other hypersonic weapons. As Burer describes, the center’s approach uses an industry campus model. The approach is not new to the DOD. It is being quite successfully used in two other DOD efforts that I am very familiar with: the Advanced Regenerative Manufacturing Institute, which is working to advance biotechnology, and AIM Photonics, which is devoted to advancing integrated photonic circuit manufacturing technology. Each are one of nine manufacturing innovation institutes established by the DOD to create an “industrial common” for manufacturing critical technologies.

A key to the success of ACMI and these other initiatives is that the DOD invests in critical infrastructure that allows shared use by small companies, innovators, and universities. This allows for collaboration across all members of the consortium, ensuring that best practices are shared, shortening development timelines, and ultimately driving down risk by having a common regulatory and safety environment. Anything that drives down program or product risk is a winner in the eyes of the DOD.

ACMI is still somewhat nascent as an organization. While it has been successful in securing DOD funding for its Critical Chemical Pilot Program and subsequently for its munitions campus, only time will tell if ACMI will be able to address the confounding supply chain issues surrounding explosive precursors, explosives, and propellants that are absolutely critical to the nation’s national defense.

Augustus W. Fountain III