Can the Pentagon Fix Its Innovation Overload? Inside the Effort to Turn Big Ideas Into Real Results

November 7, 2025

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Former Department of Defense official Jerry McGinn takes a deep dive into the challenges and opportunities inside the Pentagon’s growing innovation ecosystem. McGinn, now Director of the Center for the Industrial Base and a Senior Fellow at the Center for Strategic and International Studies, lays out what it will take for the Defense Department to get the most out of its innovation efforts — without letting chaos take over.

At the center of the discussion are two key programs that recently expired at the end of fiscal year 2025: the Defense Production Act (DPA) and the Small Business Innovation Research (SBIR) program. Both are essential tools for the Defense Department’s industrial base and innovation strategy. McGinn explains that while existing projects under the DPA can likely continue for now, no new ones can start until Congress reauthorizes the program. Lawmakers are expected to pass a clean one-year reauthorization, but McGinn stresses how critical it is to get that done quickly. The DPA, he says, plays a “critical function in the defense industrial base,” which remains a major national priority.

Turning to the SBIR program, McGinn describes it as one of the most important vehicles for innovation in the federal government. Ten agencies run SBIR programs, but the Defense Department accounts for roughly half of all SBIR funding — about $3 billion of the $6 billion total. The program helps small businesses bring new technologies into government, but it’s also under debate. Some critics question whether too many “SBIR mills,” companies that repeatedly win SBIR contracts without scaling up, are soaking up resources. Others want better data to show which projects actually succeed and transition into real military programs.

McGinn believes reform is necessary but cautions against overcorrecting. “We don’t want everything to succeed,” he explains. “You want things to fail — that’s how you learn.” The real problem, he says, is that the department doesn’t have a good way to measure what’s working. There’s little data on how many projects move from early prototypes into production or programs of record. Without those insights, it’s hard to know what’s adding real value.

Culturally, McGinn notes, the Defense Department has made progress in embracing experimentation and tolerating failure. Offices like AFWERX and the Defense Innovation Unit (DIU) have helped foster a more open approach to trying new things. But the next challenge is figuring out how to connect those efforts and scale what works. “If you let a thousand flowers bloom, you’re going to get a lot of weeds too,” he says. The department now needs to “separate the wheat from the chaff” — maintaining creativity while focusing resources on the most promising ideas.

McGinn argues that the Pentagon’s innovation ecosystem must evolve from a culture of experimentation to one of measured success. That means tracking outcomes, rationalizing overlapping efforts, and setting realistic expectations for risk and failure. Only then, he says, can the Defense Department turn its many great ideas into the operational capabilities warfighters need.