Industrial Base Hackathon 1: Deep Dive
Results Report
Our report is broken into two Substack articles. This is the Deep Dive.
Start with our introduction: Industrial Base Hackathons: An Underwriting Layer for Reindustrialization.
Deep Dive
Circling Back To Munitions Manufacturing: Testing is a Dead Zone for Armed Drones
The team then returned to another critical bottleneck: testing.
For munitions-integrated drones, testing must happen repeatedly throughout the design process, before final assembly is complete. Yet viable domestic testing pathways are nearly nonexistent.
Why?
FAA approval is required for flight.
ATF approval is required for explosives.
The FAA and ATF operate in silos, with no joint licensing, coordination mechanism, or clear lawful pathway for domestic armed-UAV testing.
This legal gray area forces startups into untenable choices:
deliver partially integrated systems that cannot be fully validated,
wait a year or more for scarce Department of Defense range access, or
conduct testing overseas—often in active conflict zones—exposing intellectual property and national security risk.
Large incumbents can absorb this friction. Smaller, cost-effective startups stall here.
Proposed Testing Solutions
The team converged on a two-track solution addressing both immediate capacity constraints and longer-term regulatory failure.
Short-Term: Enclosed Private Testing Ranges
Construct fully enclosed, privately operated testing facilities that leverage FAA allowances for enclosed airspace. The proposed “roofed Topgolf” model envisions a ~200m × 500m range with controlled detonation zones and overhead netting—enabling flight and munitions testing without open-air clearance.
Potential locations: rural Texas or other isolated land
Revenue model: $15,000–$20,000 per test
Time to deploy: 6–12 months
Requirements: private capital + ATF explosives licensing
Even a limited number of these facilities could relieve a testing backlog exceeding one year. The team also noted startups already expanding drone-testing capacity that could accelerate deployment.
Long-Term: Armed UAV Operator License
Advocate for a formal armed-UAV testing license that bridges FAA and ATF jurisdictions, enabling domestic testing at designated sites.
Timeline: 18–36 months
Pathway: executive + congressional engagement
Potential support: Department of Defense sponsors and industry coalitions
This would replace ad hoc approvals with a durable, scalable regulatory framework.
Alternative Sites: Superfund Locations
Contaminated sites awaiting cleanup could serve as isolated testing grounds, minimizing risk to surrounding communities while accelerating innovation. With appropriate licensing and interagency coordination, this approach could be implemented within 12–24 months using existing federal land inventories.
Why This Case Matters
This team surfaced a system that:
repeatedly evaluates the same technical questions,
fragments demand and approvals, and
blocks deployment through coordination failure.
Most importantly, the underlying data and coordination solution is not specific to drones. It can be applied across other procurement and testing regimes—potentially shortening timelines across multiple critical supply chains.
Case Study 2: Access to Rare Critical Minerals and Materials
Team Composition
This group included participants from critical minerals startups, nuclear fuel and waste companies, battery companies, nuclear investors, logistics startups, Army logistics, and the Naval Nuclear Lab. The team examined nuclear energy as an integrated system spanning materials, fuel, logistics, regulation, finance, and deployment.
Coordination Challenges Identified
Participants described a recurring chicken-and-egg dynamic:
banks seek regulatory certainty or guaranteed off-take,
regulators require completed studies before permitting, and
developers struggle to advance projects far enough to satisfy either requirement.
Regulatory Process and Timelines
Permitting timelines were identified as a major constraint. Participants cited:
NEPA environmental impact statements extending to thousands of pages,
judicial actions that can halt projects after significant capital deployment, and
a growing backlog of delayed projects across nuclear, solar, and wind.
For nuclear specifically, participants noted heightened conservatism driven by public perception and institutional risk tolerance.
Financing Observations
While support for nuclear energy was described as widespread, participants emphasized that financing remains difficult to secure. Banks were characterized as unwilling to commit capital without:
off-take agreements,
government guarantees, or
risk-sharing mechanisms.
Absent these elements, projects often remain stalled in late-stage development without progressing to construction.
Midstream Constraints
The group emphasized that uranium availability is not the binding constraint. Instead, participants identified limitations in:
refining,
conversion, and
enrichment.
Domestic capacity in these midstream segments was described as insufficient, increasing reliance on foreign processing and limiting scalability.
Department of Energy Capacity
Participants discussed DOE’s competing mandates—waste management, legacy stockpiles, R&D, and emerging reactor technologies—which were described as diluting focus and slowing deployment-oriented initiatives.
Key Observation from the Group
Participants agreed that no single institution is accountable for deployment at scale—prompting discussion of establishing an Energy Deployment or Efficiency Office outside DOE, with an explicit mandate focused on delivering energy capacity.
This entity was described as potentially responsible for:
coordinating regulators and developers,
supporting off-take arrangements, and
aligning financial institutions with deployment objectives.
Supporting Actions Discussed
Additional ideas included:
limiting the scope and duration of environmental review documents,
using government off-take agreements to reduce financing risk,
incentivizing upstream and midstream investment, and
aligning stakeholders through a consortium and supporting white paper.
Participants emphasized measuring success by deployed capacity rather than process metrics.
Why This Case Was Considered Relevant
Participants viewed nuclear energy as a representative case where technical capability and demand exist, but progress is constrained by coordination, permitting, and financing failures—not technology readiness.
Case Study 3: Workforce Shortages Across Critical Manufacturing
Problem Statement: Demand Far Outpaces Supply
Across nuclear, energy, defense, and advanced manufacturing, participants stated that workforce demand significantly exceeds supply. Shortages span:
skilled trades (welders, machinists, electricians and more),
engineers,
designers, and
construction and EPC talent.
In Texas alone, participants cited projected nuclear workforce needs exceeding 10,000 workers within 3–5 years, excluding semiconductors, defense manufacturing, and energy infrastructure.
Root Causes Identified by the Group
Participants cited structural failures:
absence of a clear long-term demand signal,
lack of stable centralized funding to scale proven programs,
fragmented local initiatives with no coordination layer,
no shared reality baseline defining the true scope of shortages, and
weak integration between industry, labor, and education systems.
As one participant noted, without a shared “reality baseline,” the problem is difficult to communicate, finance, or scale.
Missing but Required Actors
Participants noted that critical stakeholders are often absent from planning discussions:
trade unions and labor organizations,
community colleges and vocational schools,
workforce development agencies, and
universities engaged in applied engineering.
As one participant summarized: workforce discussions frequently occur about trades and labor, rather than with them.
Proposed Solutions Raised During the Session
Federal Office of Integrated Manufacturing: a coordinating body aligning workforce policy, funding, and demand across critical industries.
Centralized Funding with Cost Share: pooled funding tied to demonstrated market demand, replacing disconnected grants.
National Teacher and Industry Externship Programs: embedding educators in industry and industry experts in education to align curricula with real needs.
Digital Knowledge and Demand Platform: a shared system documenting training pathways, outcomes, and demand across regions.
Cultural and Awareness Gaps
Participants also cited awareness gaps:
many potential workers are unaware of available opportunities,
trades and manufacturing lack sustained, modern advocacy, and
inspiration efforts are fragmented and short-lived.
Examples included documentaries, advertising campaigns, and institutional partnerships that made industrial work visible and aspirational.
Why This Case Matters
Participants emphasized that shortages persist not because solutions do not exist, but because they do not scale—without a shared reality baseline, stable funding, and an accountable coordinating entity.
Case Study 4: Maritime Infrastructure and Port Innovation
The Problem: Innovation Inside Legacy Ports Is Structurally Constrained
This group was limited with expertise from these areas however, participants identified constraints common to legacy ports:
ports are geographically landlocked,
infrastructure is aging and difficult to retrofit,
labor and operating processes are highly structured,
technology adoption requires prolonged negotiations, and
failed pilots carry long-term consequences.
As one participant noted, innovation efforts often get “one shot every ten years,” creating rational risk aversion.
Consequence: Innovation Moves Elsewhere
Because experimentation inside active ports is difficult, innovation stalls before deployment. Startups struggle to validate technologies for:
container loading and unloading,
sorting and internal movement of goods,
transfer between ship, rail, and truck, and
autonomy and automation in logistics operations.
The constraint is the absence of viable environments to test and prove it.
Proposed Near-Term Alternatives
Participants proposed:
Experimental or Secondary Ports: smaller facilities designed for testing without disrupting primary operations.
Right-to-Work Test Environments: sites enabling rapid prototyping without immediate labor renegotiation.
Civil Innovation Programs for Maritime Systems: SBA- or DIU-style programs for controlled maritime pilots.
Data Infrastructure Proposal: Container Tracking
Participants outlined a visibility system leveraging:
camera-based recognition on highways, rail lines, and port facilities,
existing container serial numbers, and
image recognition to track container movement end-to-end.
The objective: a national map of how goods move through U.S. logistics—enabling route optimization, throughput improvements, and infrastructure planning. Participants framed this as feasible within 6–18 months using existing technologies.
Why This Case Matters
The maritime discussion reinforced themes heard across the hackathon:
innovation stalls when testing environments do not exist,
legacy systems are poor environments for experimentation, and
near-term, deployable infrastructure matters more than long-range visions.
Participants emphasized smaller, faster, revenue-generating experiments as the practical path to modernization.
Closing Observation
By the end of the hackathon, the same structural patterns surfaced again and again.
Capital Is Misaligned, Not Scarce
Companies stalled not because capital was unavailable, but because the wrong capital was being applied. Venture equity was expected where structured debt, off-take agreements, guarantees, or project finance were more appropriate.
The same misalignment appeared in workforce development: proven programs exist, but without coordination and a centralized funding driver tied to real demand, they do not scale.
Regulation and Procurement Create Dead Zones
Innovation repeatedly stalled in the gaps between institutions:
FAA vs. ATF
DoD vs. EPA
DOE vs. procurement offices
In each case, progress was blocked not by explicit denial, but by the absence of coordination—creating gray zones where testing, deployment, or financing could not proceed.
Infrastructure Is the Hidden Bottleneck
Across teams, innovation moved faster than the physical systems required to support it. The same near-term fixes emerged repeatedly: enclosed testing facilities, shared midstream capacity, and deployable infrastructure that could generate revenue and relieve bottlenecks within 6–12 months.
Fragmented Demand Weakens the Entire Supply Chain
Companies source independently, undermining scale and deterring domestic investment. Fragmented demand prevents suppliers from receiving bankable signals to invest.
Teams proposed brokerages, consortia, and shared databases to aggregate demand, standardize components, and translate fragmented needs into investable pipelines.
The Underlying Failure: No Shared Visibility
Across every case, effort and capital stalled for the same underlying reason: lack of shared visibility into:
where knowledge and capacity do or do not exist,
where demand is aggregating,
where approvals are duplicative rather than additive,
where workforce shortages are real versus perceived, and
where regulatory or procurement friction sits in the process.
The conclusion was consistent across teams: the core constraint is not innovation, regulation, talent, or capital. It is coordination without visibility.