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​In the world of defense innovation, “it’s really about the challenges, not the technology,” according to Pierre Chao, founding partner at Renaissance Strategic Advisors. Instead of beginning with a new technology and looking for military applications, Chao said, the Department of Defense needs to approach industry partners by saying “this is my No. 1 problem, you go figure out how to solve it.” Chao made his remarks Friday at a Center for Strategic and International Studies conference. The two most important tools in addressing the problems the Defense Department faces, Chao said, are analytics and incentives. Without complex analytics, it is impossible to correctly identify problems. And incentives are necessary to motivate industry to work on solutions. Chao said that the Defense Advanced Research Projects Agency and the Defense Innovation Unit Experimental (DIUx) challenge and award programs were moving in the right direction on incentives. “A $1 million prize generates $195 million” in research and development spending from industry in order to solve a specific DOD problem. This sort of efficiency, he said, “is a very clever way of doing it.”