In recent decades, US defence R&D seems to have lost its lustre. To combat the declining innovation, in 2018 the US Air Force reformed its contracting procedures to allow applicants more freedom to suggest projects with potential military benefits. This column uses data on applications and winners from such competitions to assess the effects of the reform. It finds that the 'open' programme attracts new and younger firms, increases future venture capital investment, and increases patenting. Government R&D could thus benefit from more bottom-up, decentralised approaches to promote innovation in the public sector.
Sabrina T. Howell, Jason Rathje, John Van Reenen and Jun Wong
8 May 2021
VoxEU
https://voxeu.org/article/opening-military-innovation
This work is published under POID and the CEP's Growth programme.