Business

February 25, 2013

Military contractors look for commercial uses

The world watched earlier this month as President Barack Obama announced at the State of the Union address plans to withdraw 34,000 of the 66,000 troops remaining in Afghanistan by next year. Also this month, Skydex Technologies released its new footwear for commercial use from a quiet Centennial business park.

The two events may seem entirely unrelated, but as the United States continues drawing down troop levels in volatile regions abroad, private U.S. companies such as Skydex that have depended on military engagement for revenues are looking for new commercial applications.

Deployment levels of U.S. troops in Afghanistan have consistently dropped from a peak of 100,000 troops in 2011 and are expected to range from zero to a maximum of 15,000 by the end of 2014. This comes on the heels of a full withdrawal from Iraq in 2011 after peaking at 168,000 in 2007.

Skydex, makers of blast-absorbing floor decking in mine-resistant personnel carriers, relies on military contracts for about 90 percent of its income and the commercial market for the remaining 10 percent. By mid-2014, the company projects a 50-50 split. Its new shoe, designed for bootcamp-style workouts is the first step in this evolution.

“It’s very much in the state of shift this year,” said Peter Foley, chief product officer at Skydex. “There are so many places you could put the technology, and our decision is where to put it.”

The company created its trademark twin-hemisphere padding in the late 1970s for sporting goods but was immediately solicited by the military. Skydex then licensed its plastic cushion system to Nike, which the well-known shoe company used for its Nike Air technology.

Now, the 31-employee company is feverishly innovating and testing new uses for its technology.

Foley said the company was successful because of its primary benefit – slowing down the impact of explosive land devices, which protected soldiers’ limbs and lives. But, “The second and third benefit are really what makes us successful in the commercial market,” Foley said.

Those benefits include reusability, durability and lightness that its foam competitors can’t provide.

Vic Ahmed, founder CEO of the new Denver-based incubator Innovation Pavilion believes there is a plethora of opportunities from wartime that are like this but are not capitalized.

“I think it is pretty incredible how much technology has developed for military purposes. When those projects are over, they just sit on the shelves and are not used,” Ahmed said. “I think that is a wasted national asset.”

Michael Locatis resigned two weeks ago as U.S. Department of Homeland Security’s assistant secretary for cybersecurity and communications and moved back to Colorado. Having worked in the private sector before nine years in government, Locatis said that the crossover from military to commercial applications is a growing trend.

“There is a lot more, especially in the Obama administration, around leveraging the private sector for commercializing cybersecurity solutions … by moving to more private companies,” Locatis said.

 




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