Defense Research Spending on Declining Path till 2010

By Baker, Athanasia D. | National Defense, December 2000 | Go to article overview
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Defense Research Spending on Declining Path till 2010


Baker, Athanasia D., National Defense


Non-defense science and technology spending is projected to exceed Defense Department research and development investments during the next five years,

according to the Government Electronics and Information Technology Association (GEIA).

Spending on research and development by non-defense agencies and private industry steadily has increased since the early 1980s, said GEIA, in its recent forecast. By 2001, civilian research and development investments will be about the same as the Pentagon's, approximately $40 billion. By 2005, non-defense investments in science and technology will approach $50 billion, according to the study.

Corporate research and development also is experiencing positive growth, while federal research and development is slowing. This trend, said GEIA, shows no indication of ending in the foreseeable future. By 2010, GEIA predicted that only half a percent of the gross domestic product will be spent on federal research and development, while industrial research and development will have grown to almost 3.5 percent.

The non-defense research and development efforts primarily are dominated by the National Institutes of Health. Other agencies that fund civilian research work include the National Science Foundation, the Agriculture Department, the Energy Department and NASA.

Within the Defense Department's science and technology budget, the Army will see a 0.6 percent increase, the Navy almost 0.4 and the Air Force about 0.2 during the next decade. The science and technology funding is split into three different levels of programs: 6.1 for basic research, 6.2 for applied research and 6.3 for advanced technology development.

GEIA projected that 6.1 and 6.2 funding will increase at about the rate of inflation, while 6.3 will experience sporadic spurts of growth and periods of decline, as major Pentagon programs transition from development to acquisition.

The forecast for research and development levels out at $42 billion by 2010, while procurement increases from $63 billion to $70 billion. Military aircraft budgets will command about $20 billion.

In constant dollars, GEIA is forecasting an increase in the overall defense budget from $300 billion in 2001 to $333 billion by 2010. In current dollars, that becomes $411 billion. The budget increase is distributed as follows:

* The Army, From $78 billion to $86 billion.

* The Navy/Marine Corps, $91 billion to $102 billion.

* The Air Force, $88 billion to $94 billion.

* Other defense agencies', $43 billion to $51 billion.

Electronics increasingly will garner more defense dollars, said GEIA. Spending on defense electronics is $51 billion in 2001 and will increase to $58 billion by 2010. Of that, $29 billion will be for procurement, $23 billion for research and development and $7 billion for operations and maintenance.

Information technology spending will increase from $43 billion to $51 billion by 2010, according to the study.

In the space arena, GEIA market projections for 2001 to 2010 show about approximately $180 billion in business opportunities. That amount is split between satellites--$130 billion--and launch services, at about $50 billion. Commercial satellites represent 44 percent of sales; military, 29 percent, and government civilian, 27 percent. For launch services, commercial work will constitute 51 percent of the market, 26 percent will be military, and 23 percent will be government civilian. By 2002, 70 percent of the world space market will be commercial, said GEIA.

Platforms

The Air Force/Navy/Marine Corps joint strike fighter (JSF) will become a significant budget driver in the future, said GEIA. Hughes Petteway, of Honeywell Inc., said, the JSF "has a major impact on the future of all tactical fighter aircraft procurement for the next 20 to 25 years."

The 15 largest defense programs of the decade will comprise 70 percent of total funding, said GEIA.

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