Will Flying Cars Help the US Beat China? The Air Force Hopes So.

The U.S. Air Force wants flying cars. But more than that, it wants to give U.S. manufacturers a head start in a hot future market.

On Tuesday, service officials released a request for proposals for the Agility Prime program, which seeks a highly modular vertical-lift aircraft that could play a variety of roles. The service dubs them ORBs, for organic resupply buses. 

“Given their flexibility, an ORB could act as an organic resupply bus for disaster relief teams, an operational readiness bus for improved aircraft availability, and an open requirements bus for a growing diversity of missions. ORBs could enable distributed logistics, sustainment, and maneuver, with particular utility in medical evacuation, firefighting, civil and military disaster relief, installation and border security, search and rescue, and humanitarian operations,” the request said.

Will Roper, the service’s assistant secretary for acquisition, said last week that that program is much broader than just building a flying bus. He’s looking to create the circumstances by which the industry can take off in the United States before it swims to China. 

Roper made his remarks to a handful of Pentagon reporters, but he could have been speaking to an international crowd of policy-makers and Fortune 500 CEOs in Davos or Munich. Helping to launch flying car market in the United States is “equally” as important as acquiring them for the Air Force, he said.

DOD provides about “20 percent of the [research and development] funding in this country,” he said. “Twenty percent is not going to compete with China long-term, with a nationalized industrial base that can pick national winners.”

A January report from data analytics company Govini supports that view. Govini found that while the U.S. government and U.S. businesses are spending more on research and development than China, the pace of China’s investment is surpassing that of the United States. 

Among the tech winners that China has been able to poach from the United States is the consumer drone market. Roper described it as a cautionary tale for what could happen with flying cars. “The Pentagon didn’t take a proactive stance on it and now most of that supply chain has moved to China. If we had realized that commercial trend and shown that the Pentagon is willing to pay a higher price point for a trusted supply chain drone,.” the drone market would be different, and the U.S. military would be the direct beneficiary.

“We probably could have kept part of the market here and not have the security issues we do now when someone wants to use a foreign-made drone at an air force or service event.

Agility Prime is saying, ‘we’re not going to let that happen again and we’re going to be part of the global tech ecosystem.’”

The Air Force has created a venture arm, Air Force Ventures, to persuade the venture capital community to invest in projects with military relevance. Roper said that partnering with the big-money houses of Silicon Valley has already helped to bring $400 million in private investment into companies working on defense problems.

The Air Force has also introduced processes meant to get more money to companies that aren’t traditional defense contractors. In the beginning phase, there’s AFWERX, which the Air Force created in 2017 as a seed investor. AFWERX is making investments of roughly $50,000 in small companies as part of the Small Business Innovation Research, or SBIR, program. Companies that make it to phase II of the SBIR program could get $1 million. Finally, the Air Force is looking to match the investment of private venture capitalists for bigger bets.

That’s a big departure from the way defense contracting happens traditionally, with a known defense contractor snagging a big multi-year contract and then working it until it’s canceled. “We’re not going to get a new defense prime. It collapses every year through mergers and acquisitions. Trying to recreate the 20thcentury industrial base is a losing strategy,” Roper said. 

Early-stage investments in technology that could have dual military and civilian use, Roper said, is the only way the United States is going to stay competitive with China. But the military has a lot of other assets it can bring to bear on tech innovation that the private sector can’t, such as testing ranges for experimental aircraft.

The acquisitions program for Agility Prime would feature a “challenge-based acquisition plan. We’ll have different durations of flight and payloads that have to be carried. And if you pass the hurdle, you will move further down the wickets of getting safety certified and moving onto a procurement contract. We’re working with our operators right now on what missions” that might entail, he said.

Roper hopes that certifying companies to produce flying cars for the Air Force will go a long way to convincing other federal authorities to give their stamp of approval. “The companies that are able to make it to that point are able to go to domestic certifiers and say, ‘You should trust that I am able to fly commercially,’” he said.

Peter W. Singer, a strategist at New America, said, “Pentagon leaders are putting far more thinking into supply chains than they were in the past, in both already established programs of record as well as what might be the programs 20 years from now. So I am supportive of this kind of thinking. A challenge, though, is in areas where the consumer side might take off, pun intended. The Pentagon's buying power might be enough to aid a startup at the early stage, which is obviously valuable. But the long term prospects of a firm selling into a mostly civilian market are going to be decided outside the E-Ring.”

Paul Scharre, a senior fellow and the director of the Technology and National Security Program at the Center for a New American Security, said, “I think it’s good that DoD is thinking about supply chain security and how commercial markets evolve. Keeping a demand signal in the marketplace for trusted suppliers is important for shaping how an industry evolves.”

Stephen Rodriguez, a senior advisor at the Atlantic Council, said "China came to dominate the commercial drone market not only by investing heavily out of their federal coffers but also, and probably more importantly, coordinating their industrial policy with commercial technology developers. This enables Beijing to clearly see what technology they need to buy or build and what technology wasn't important. We still wrestle with this paradigm. Whether we have a ‘trusted market’ or not, Washington still needs to understand what technologies are truly game-changing on an ongoing basis, and then building programs around that policy."