Opening up military innovation: causal effects of 'bottom-up' reforms to U.S. defense research

Sabrina T. Howell, Jason Rathje, John van Reenen and Jun Wong

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: 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.

Keywords: innovation; defense; R&D; procurement (search for similar items in EconPapers)
JEL-codes: H56 H57 O31 O32 O38 (search for similar items in EconPapers)
Date: 2021-04-13
New Economics Papers: this item is included in nep-ent, nep-ino, nep-ppm, nep-sbm and nep-tid
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Citations: View citations in EconPapers (4)

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Working Paper: Opening up Military Innovation: Causal Effects of 'Bottom-up' Reforms to U.S. Defense Research (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1760

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