I am going to preface this with a gigantic “I make all of these statements of my own accord, and with my own opinions”. Now, let’s get to the sticky bit here.
I believe we have a particular problem here in San Antonio caused by the heavy influence of military rank and structure in the region. The area is so saturated with government money at multiple levels, that businesses are started by and upper-level positions are filled with outgoing senior officials due to their spread/depth of contacts rather than real business acumen or entrepreneurial insight. I’m thinking about calling this “vesh’s Theory of Regional Directorships” due to a series of incidents I saw early in my career. Swaths of O-5s and O-6s were getting out and immediately being made something called a “regional director”. I think this means, “put them in charge of a set of contracts where their Rolodex can be useful”. It seems that the more successful entrepreneurs I have encountered rolled out at a lower rank (if any). They actually have to learn how to manage a real business to even begin to see success. These people have to be solid from the get-go, or else there is nothing there to catch them. The graph below shows my very unscientific analysis of various anecdotes I have heard throughout the years on this subject. The drop-offs represent natural attrition of high-ranking officials from their posts of influence.
The private sector has the profit motive to encourage cost-cutting and efficiency. This motive simply does not exist in the bureaucratic world. Think about the last time someone was promoted for cutting back their budget. Expanding a corporate bottom line is a far different task than growing your Federal fiefdom. However, the enterprising individuals at the top of these contracting companies, who actually are true businessmen, realize there are short-term gains to be had by farming this level. Just drop a big contract on JBSA, then watch the courting begin. If the guy or gal you pick up not only wins the contract, but actually grows business, great. Although, this growth is almost always not through innovation or product development. It is through yet another contact with someone who has some money to spend at FY-end. So, we perpetuate this contract-heavy Federal-money laden cycle which shows great income for the the local area, but does nothing to uplift innovation. Try to ponder what would happen if JBSA were to close shop tomorrow. Would we be able to respond with private enterprise? How intertwined is our city's fate to a constant stream of public funding?
San Antonio wants to be Cyber-City, USA and it earns this moniker handily. While other areas discuss research and entrepreneurship in the computing realm, we get “cyber-this and cyber-that”. We get a new "Cyber-Center of Excellence" or another "Innovation Partnership". Where is our Apple? Why isn't the latest device from Google created here? You can’t just say, “We have capital here; massive amounts of capital. Why aren’t we accomplishing what Cupertino, Palo Alto, and Austin have accomplished?”. I think there is a perfect analog to old Soviet market adjustments, where they pegged their commodity prices to ours. Instead of actually performing true free-market actions, they simply took our figures and applied those as a basis. Of course this never worked. They never got it right, but they still tried until the Iron Curtain fell. Factories were built based on political expediency and placed where unemployment concerns existed, not upon where it made the most business-sense. This political expediency has a similar effect in our city when funding is allocated
There is so much nonprofit and Federal income in this area we are taking all of the market incentive out of our technical sector. It is easier to hire a senior official and snag a contract than it is to engage in true innovation. 24th Air Force is not going to create the next Facebook, no matter what the RFI on FedBizOps says. Contracting is fine, and there is nothing wrong with responding to requests for proposals. I think we delude ourselves, though, by not addressing the multi-billion dollar elephant in the room. Continuing to deliberate over why we have all these resources surrounding us, but we can’t create the same climate like other cities, is useless. We have to foster private capital investment and wean ourselves from the government cow.
Like most other people in this city, I want to create sustainable capital markets. We can grow past the government sector being such a large center of gravity in our midst. If we foster private innovation here and now, other cities would be hard pressed to offer a better business climate.
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