US DoD report urges more safeguards for small tech firms

An aerial view of the Pentagon, the headquarters building for the US Department of Defense. (Getty Images)

The US Department of Defense (DoD) should increase its efforts to help small businesses protect their technology from foreign adversaries, according to the Pentagon's new “Small Business Strategy”.

Many small businesses do not realise that adversaries might try to gain access to their technology through joint ventures, mergers, acquisitions, or cyber espionage, the report says. The document recommends that the DoD offer education and training to make small businesses aware of such threats so they can take steps to counter them.

The 25-page report, which the Pentagon released on 26 January, also suggests that the department explore ways to promote greater domestic investment in small companies to reduce their reliance on overseas capital. The strategy recommends that the DoD create a working group to consider additional measures to help small businesses minimise risks from “foreign ownership, control, or influence (FOCI) operations”.

The DoD has already taken steps on the investment front. It announced in December 2022 that it has formed an Office of Strategic Capital (OSC) to offer financial tools to entice investors to back technology startups that are working in areas important to national security. The department announced in January 2021 that it launched the Trusted Capital Digital Marketplace (TCDM), whose website seeks to help small and medium-sized defence technology companies connect with DoD-vetted capital providers.

US Navy Lieutenant Commander Tim Gorman, a DoD spokesperson, told Janes on 1 February that the department is reviewing the TCDM “to look for areas for improvement and to determine how to align or integrate this effort with the Office of Strategic Capital”.