Democracy's Arsenal: Creating a Twenty-First-Century Defense Industry

6. The Criticality of Research and Development

6 The Criticality of Research and Development After World War II and during the cold war, U.S. national security strategy was based on technological superiority. The secretary of defense from 1977 to 1981, Harold Brown, and the undersecretary of defense during that period, William Perry, decided to offset the Soviet Union’s quantitative military superiority not by building bigger armies but—because the cost of DoD labor went up greatly with the end of the draft—by investing in technology.1 This policy has not been universally accepted (especially by many in the military , who would much prefer forces in being), but its effectiveness was demonstrated in the 1991 Gulf War when the technology that was developed during that prior period clearly worked and helped U.S. forces achieve a rapid victory. In the 2006 Lebanon war, fighters in Hezbollah (a paramilitary organization based on Lebanon) fired on northern Israeli towns. For thirty-four days, the group fought Israeli defense forces (the strongest army in the Middle East) in northern Israel and southern Lebanon, using technology to match its irregular tactics and recognizing that it could not confront Israel directly with conventional forces.2 The insurgents in Iraq have been highly effective against the far more powerful coalition forces of the United States and its allies by using technology (such as secure communications, the Internet, and roadside bombs) with small forces and commercial technologies. Finally, small forces that acquire nuclear or biological weapons can dramatically affect future security—even with a limited number of forces. Thus, the United States and its allies must develop advanced technology, anticipate how advanced technology (military and commercial) will be used in the future and who will use it, and develop technological and or operational counters to each of these. For example, as Russia demonstrated when its troops went into the country of Georgia in 2008, cyberwarfare can be used against adversaries in a significant way. U.S. research must devote significant attention to cyberdefense. Overall, as technology spreads rapidly and globally, the United States needs to stay ahead (offensively and defensively) to maintain its future security. 254 Chapter 6 Fortunately, the importance of investing in research and development has been widely recognized since the end of World War II, and R&D investments have grown significantly since then (figure 6.1). Large investments in defense research and development are possible only when the economy is healthy. In constrained economic periods, long-term investments (such as research and development, particularly fundamental research) are usually postponed so that near-term needs can be funded. Not only do defense expenditures require a healthy economy, but R&D investments in defense and in nondefense have a synergistic relationship that is reinforcing in both directions. In the past, the U.S. economy has gained more from the spinoff of defense expenditures than the defense industry has gained from private R&D, but recently, defense has gained considerable benefits from commercial R&D expenditures (particularly, in the information-technology area). Because an increasing share of the U.S. national R&D expenditures are in the commercial world, the DoD needs to take full advantage of those investments (and not be hampered by regulatory or legislative restrictions). 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Expenditures (billions of FY 2006 dollars, adjusted for inflation) Research, development, testing, and evaluation (RDT&E) task-order agreement (TOA) RDT&E budget activity (BA) RDT&E outlay Figure 6.1 Research and development expenditures, 1947 to 2006 (adjusted for inflation). Source: National defense budget estimates for fiscal year 2006, Office of the Under Secretary of Defense (Comptroller), April 2005. The Criticality of Research and Development 255 There have been many spinoffs from defense technology to the commercial world: • Commercial aircraft One of the Wright brothers’ early planes was funded by the army as an R&D project. The Boeing 707 drew heavily on the Boeing military tanker (the KC-135) that was developed to provide in-flight refueling for strategic bombers. From 1945 to 1982, military R&D funding accounted for more than 74 percent of the total R&D investment in the commercial aircraft industry, and from 1985 to 2000, it never accounted for less than 70 percent of the annual R&D investments in this industry.3 • Jet engines...