As part of the Central Intelligence Agency's growing trend of partnering with the private sector, the CIA announced Wednesday that it would be investing in Narrative Science, a Chicago-based startup that uses computers to make sense of data and present it in prose. Once a leader of technology innovation, the CIA recognized it could not compete for IT innovation and talent with private profit-driven firms. In one of the more impressive government adjustment to economic pressures, the CIA has changed the way the government creates IT innovation.
Beginning in the 1990s, the intelligence community started a fund to invest alongside private venture capitalists in innovative startups. In-Q-tel (IQT), the company that invests on behalf of the CIA, has served as a venture firm investing on behalf of the U.S. intelligence community since its creation in 1999. It is currently invested in just about 100 companies developing new information, communication, physical, and biological technologies.
One of these companies to receive funding from IQT is Narrative Science. The company's "robot writers" first got noticed when they began being used to create sports stories based on box scores. More recently though, Narrative Science has been used by financial services firms and other companies to sort through masses of data and create summaries and reports.
For example, Forbes uses Narrative Science to create automated earnings reports and previews, like this look-ahead at Smucker's day-to-day prospects. The ability of the software to make sense of large quantities of data makes it the perfect tool to make sense of all of the CIA’s data.
The need for IQT came from the realization that with the development of the world wide web the CIA could no longer able to keep up with innovation. Further, the CIA's mission was intelligence collection and analysis, not IT innovation. As the CIA website explains, "As is the nature of a market-based economy, the flow of capital and talent has irresistibly moved to the commercial sector, where the prospect of huge profits from initial public offerings and equity-based compensation has become the norm."
IQT is a not-for-profit organization guided by a board of trustees from the national security, finance, and technology worlds, and while IQT works in close cooperation with the CIA, it is largely independent in how it invests. Through the IQT Interface Center at the CIA, the organization develops its investment target to ensure that investments are meeting mission needs.
In this case, Narrative Science will support the intelligence community by developing a specialized version of its patented artificial intelligence engine, Quill, to help understand, analyze, and communicate intelligence data.
"Narrative Science's artificial intelligence platform analyzes data and communicates this information in a way that is easy to read and understand," said Steve Bowsher, managing partner at IQT. "We believe these advanced analytic capabilities can be of great value to our customers in the intelligence community."
To increase the agency's access to private sector innovation, IQT makes investments in commercially focused technologies that will provide benefits to the intelligence community within 36 months. In order to keep the cost to government low, IQT also looks for companies attracting significant private sector investment from top-tier venture capital firms. IQT then invests approximately one dollar for every nine invested by the venture capital community.
In this particular case, the intelligence community can look forward to having a much broader range of information available for a fraction of current cost. The CIA's investment in the private sector through IQT is a model that government should strive to adopt on a broader level: combining the sound investments of a not-for-profit independent organization with the resources of government to tap into the innovation only the private sector can offer.