January 21, 2006: Despite the CIA's pledge to get back to old school spying techniques, technology is still important. So important that, most American espionage agencies have gotten into the venture capital business in order to accelerate the development of new tech. The most notable of these efforts was developed by the CIA, which established a venture capital firm, In-Q-Tel, in 1999. But such financial encouragement is nothing new. For over four decades, the military, and intelligence organizations, have been providing money to academic researchers, the better to develop new technologies and techniques. But over the last decade, development cycles have shrunk enormously. It used to take years to get a new technology from the lab, and into the hands of users. Now, it can take less than a year, and in the field of electronics, often does. In the 1990s, it was noted that commercial (off-the-shelf) technologies, useful for military or intel purposes, were ready for use faster than stuff developed through the usual defense companies. The old ways were being eclipsed by new ways, and the defense firms were never really able to adapt (and during the post Cold War 1990s, many tried). While money was still going to academic researchers, the intel agencies and the Department of Defense were now also providing money to get the most promising ideas into production. Obviously, these were often dual-use items, that had a civilian market as well. But there are many small firms, you never hear of, that do almost all their business with the government. These outfits often produce highly classified items, or services.

The army, navy, and even the NSA, have venture capital operations. Some of the investments are made to existing firms, to accelerate production of something the spies or soldiers need. Many of the hot new technologies being exploited in this way have to do with sensors and wireless networking. The Department of Defense has been working on this combination for over two decades, and now many of these technologies are mature enough that many new applications are possible. The war on terror, and the battlefields of Iraq and Afghanistan, have provided opportunities to test these new items under realistic conditions. Thus the items that don't quite hack it are quickly found out, and the successful ones can be further developed.