The First Steps to a DoD Data Economy

The U.S. Department of Defense needs to do more to open up access to data, and it should start by making sure it owns the data that is produced by the platforms it uses.

That’s the top recommendation from a new report on DoD data issued by the Defense Innovation Board, a Michael Bloomberg-chaired independent advisory committee made up of industry, academic, and government leaders that issues recommendations on technology to the DoD.

The report, titled “Building a DoD Data Economy,” outlines how the DoD can better adopt data practices used in the commercial world. The 28-page document focuses just as much on the people who will power a data-driven DoD as it does on the technology they will use. It also makes an actionable policy recommendation for Congress: Advance a new requirement in the next National Defense Authorization Act (NDAA) that would install consistent language on data rights and interoperability in all DoD vendor agreements. 

Interesting, but why should I care?

Data is a key building block of the digital economy, influencing not just the decisions that are made, but how the systems used by warfighters are built. So anyone interested in innovation at the DoD should be familiar with data practices and how they are evolving, as well as the internal champions for data throughout the ranks. Plus, the DoD is still in the phase of its innovation journey where the mere existence of a report on data is significant in and of itself.

For a quick primer, let’s break down the basics of the report.

What is a data economy, and how does it apply to the DoD?

Put simply, the world has more data than ever. A data economy describes the way that it is harnessed to do business.

The end result may be an economy in which data is monetized in a variety of ways, but the DoD is far from that point today. One of the report’s key messages is that the DoD still needs lots of infrastructure before it could even consider creating new ways to make money. Primarily, the report is concerned with putting the building blocks of a data economy in place, and the most important first step is expanding access to data. It argues that the DoD is far behind the business world in making data available to all, creating ways to share it, and advancing best practices that allow insights to be drawn. 

To catch up, the report states that DoD must break down silos between different agencies within its own walls, as well as the those between the DoD and private contractors, especially those that make the systems where much of this voluminous data lives and is produced.

“Data is a strategic asset and should be treated as a product, yet prevailing DoD approaches to data access remain severely outdated,” the report states. “The Department operates numerous legacy systems that are often incompatible with one another, slow at data processing, and challenged with difficulties in data storage and retrieval.”

Modernizing data practices will allow the DoD to adopt the digital practices used by the rest of the business world as a whole. In some cases, large data transfers are shipped via USPS rather than through a digital network, and combining data from different networks requires moving data onto hard drives or even DVDs. In a data economy, movement is digital and networked, not physical and discrete.

What is the top policy recommendation?

DoD data is hosted across a sprawling collection of platforms, some of which are DoD-owned, some of which are built alongside industry, and some of which are third-party. Currently, the DoD lacks the ability to pull all of that data together, and draw insights from it for the benefit of R&D.

But before it can create the tools that would enable a fuller picture of DoD data to come together, the department needs a guarantee that it can access the data from all platforms, the report argues. Data policies are currently just as fragmented as the data itself. 

So the Defense Innovation Board has a recommendation for Congress in the 2025 NDAA. The report calls on Congress to explore the creation of a requirement in DoD contracts with private companies that will ensure DoD has ownership of the data generated through platforms it funds, and creates data monetization approaches that will incentivize industry to share the data. 

To put this in place, the Board calls for the creation of a data catalog that serves as a central access point for all defense industrial data. This will allow the data to not only be shared with and through the DoD, but between partners. This repository will plant the seed for data that is generated by the DoD to be more widely available, and ensure that the different platforms on which it sits can talk to each other and work together.

What are the top recommendations about people?

The DoD has data leadership. Now it needs to be bolstered, the report says. The report calls on the DoD to empower the Chief Data and Artificial Intelligence Officer to better lead, by ensuring they are headquartered at the Pentagon, with a designated COO and CTO. In turn, the current West Coast lead should be replaced by national liaisons through each outpost of the Defense Innovation Unit (DIU). There should also be a memo that clarifies the CDAO is responsible for all data practices across the DoD, and a new funding line for all data initiatives. Below the senior level, Component data leaders should also have titles and responsibilities standardized and have the power to make decisions on the organization and funding.


Change won't only come from the top. The Department must also harness the talent throughout the military, the report states. The DoD should also create more pathways for data talent throughout its ranks, the report states. This can be achieved by creating new roles, such as a “Data Officer” Military Occupational Specialty that sets the framework for career progression, and a new “head-hunter” that focuses on recruitment and coaching in order to match the best talent with the right department. The DoD should also create supportive environments and events that encourage the creation of new solutions, and issue guidance on the use of developer tools such as Python and Github, the report states.

What are the top recommendations about technology?

The report calls on the DoD to enable API-first architectures and AI tools that not only improve access to data and interoperability, but also lay the groundwork for new analytics capabilities. In general, the DoD is too reliant on what the report calls “large, bulky, platform-centric solutions with a selective focus on exquisite data and software requirements.” This can be ushered in by the adoption of API standards, updated procurement policies, and mandates to build with an API-first mindset at the CDAO level. There’s also a need to improve the front-end capabilities of DoD products, which can be accomplished by ensuring teams have design and UX talent, as well as the creation of more data visualization capabilities.

What are the top recommendations about practices?

The report calls for increasing incentives for contractors to participate in this newly collaborative environment. In other words, the DoD wants to open up new opportunities for data monetization.

“For a DoD data economy to exist, there must be the economy: significant predictable revenue opportunities for third-party software — to include data analytics and AI — that benefit both software and platform providers alike,” the report states.

Just as the Department is encouraging the development of new technology and capabilities, it should also explore new business models, the report states.

What will it mean for DoD?

In reviewing the recommendations of the report, a roadmap to the data economy begins to emerge. Open up access to the data, build the technology that can make it actionable, and create business models that make money. As the DIB takes pains to remind readers, this is a playbook that has been employed time and time again in the private sector. 

But for the DoD to be successful, it will require a cultural shift, from siloing resources to sharing, from prioritizing security to prioritizing openness, and, above all, from putting up bureaucratic roadblocks to embracing new ideas and accepting that the plan may change along the way.

DoD already has pockets of progress. Innovation arms such as AFWERX have created the types of environments that the report calls for, and the existence of the Defense Innovation Board shows there is interest in adopting practices from industry. 

But to create a data economy, systemic change will be required — not only in the DoD, but also across the private companies and partners that make up the defense industrial base.

After all, the idea that the DoD has an economy around it isn’t new. Rather, the DIB is arguing that it must change from platform-driven to data-driven.

Featured image was created with the assistance of DALL·E 2. 

Stephen Babcock

Stephen Babcock is the Head of Media at Squadra Ventures. Stephen works to grow the Squadra brand through content, PR and events. Working closely with the Squadra team and portfolio companies, he tells stories, builds audience and makes the creative a driver of value. Stephen has built new media products across B2B and general interest news. He built, launched and served as editor of The Current, a B2B media platform for ecommerce professionals, and supported the marketing and brand activities of parent company Incremental, a retail media attribution and measurement platform. Over a 15-year career as a journalist across print and digital, he worked as an editor with outlets such as the tech news network, and a reporter with publications such as The New York Times, | The Times-Picayune, The Rio Grande Sun and The Patriot-Ledger.


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