Opening up military innovation: causal effects of 'bottom-up' reforms to U.S. defense research
Organizations investing in R&D must decide whether to solicit specific technologies or allow innovators to suggest ideas. Using administrative data, we study the 'Open' reform to U.S. Air Force R&D procurement, which invited firms to suggest any new potentially useful technology. The new program was run simultaneously with the traditional top-down 'Conventional' program. Our regression discontinuity design offers the first causal evaluation of a defense R&D program. We document benefits from winning an Open award for VC funding, military technology, and innovation, and no benefits from Conventional, which instead fosters incumbency. The bottom-up approach appears to help explain Open's success.
Sabrina T. Howell, Jason Rathje, John Van Reenen and Jun Wong
13 April 2021 Paper Number POIDWP004
This POID Working Paper is published under the Programme on Innovation and Diffusion.