For governments procuring innovation, one choice is whether to specify desired products (a conventional approach) or allow firms to suggest ideas (an open approach). Using a US Air Force R&D grant program where open and conventional competitions were held simultaneously, we find that open awards increase both commercial innovation and technology
adoption by themilitary. In contrast, conventional awards have no positive effects on new technology but do create more program lock-in. We present evidence that openness matters over and above inducing differential selection, for example, of less well-established firms. These results suggest benefits from open approaches to innovation procurement.
Sabrina T. Howell, Jason Rathje, John Van Reenen and Jun Wong
1 November 2025
Journal of Political Economy 133(11) , pp.3605-3651, 2025
DOI: https://doi.org/10.1086/737235
https://www.journals.uchicago.edu/doi/10.1086/737235
This work is published under POID and the CEP's Growth programme.