Can Defense Research Revive U.S. Industry?

By Berkowitz, Bruce D. | Issues in Science and Technology, Winter 1992 | Go to article overview
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Can Defense Research Revive U.S. Industry?


Berkowitz, Bruce D., Issues in Science and Technology


Probably not, but with better technology transfer it can at least contribute to commercial progress.

Even before the Cold War ended, public pressure was growing for the defense research and development (R&D) community to produce technologies with commercial applications. In part, these demands reflected the large investment that the United States has made in defense R&D ($39 billion funded by the Department of Defense |DOD~ in 1992, with an additional $3 billion spent by the Department of Energy for nuclear weapons research). These demands have intensified now that the Soviet threat has declined; commercial applications for defense R&D are commonly assumed to be part of the "peace dividend." Surely, the argument goes, the same minds that produced stealth technology and smart bombs can now help the United States win the trade wars in the international marketplace.

During the 1992 presidential campaign, Bill Clinton and George Bush both supported the idea of using defense research to improve U.S. competitiveness.

Yet experience suggests that converting defense R&D to civilian products and services may be more difficult than many believe. The defense community has been notoriously ineffective and inefficient in transferring technology to the private sector. And the evidence indicates that this performance has much less to do with the nature of defense technology than with the deep-seated organizational and cultural obstacles within the military that discourage and impede technology transfer.

An equally daunting impediment is the body of rules, regulations, standards, and specifications that govern the Defense Department's acquisition process. These policies make it virtually impossible for military products to be cost-competitive in commercial markets. They also prevent DOD from taking advantage of many commercial developments that would improve U.S. military capabilities.

The net result is that the commercial payoffs from defense R&D will never meet expectations unless we adopt policies to change the culture of defense research and facilitate the transfer of military technology to the commercial market. Defense spending may be falling, but the military will still consume a substantial share of U.S. R&D funding. The competitiveness of U.S. industry will depend greatly on whether we can transfer this know-how to the private sector. Defense officials will also find greater support for their R&D budgets if they can demonstrate significant commercial applications.

Past victories

Some defense technology has always found its way into civilian life. Certain innovations even provided the basis for entire industries. Canned food, for example, was originally used by Napoleon's armies, and more recently computers, jet engines, communications satellites, and jeeps were developed for the military.

Until recently, such spinoffs were considered fortuitous bonuses. It was understood that war--or in the case of the Soviet Union, conflict just short of war--often accelerated the rate at which technology evolved and that private industry could benefit. Yet there was little deliberate effort to introduce defense technology into the commercial arena.

Beginning in the late 1970s, some legislators began to argue that the government should promote, or at least facilitate, technology transfer. They were concerned that government-funded research was not producing enough return and that our global competitors--Japan and Germany in particular--would outpace U.S. companies in developing new products because such a large proportion of U.S. research spending was devoted to military work.

Table 1
Government-funded R&D: Where the money goes
(Percent, 1989)
                    U.S.    Japan   Germany   France   U.K.
Defense             65.5%    9.0      18.0     41.9    55.2
Health              12.9     4.8       5.2      3.7     6.2
Civil space          7. 

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