Defense innovation at any (out of control) cost? The stalemate of today’s R&D policy, and an alternative model

Renaud Bellais ()
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Renaud Bellais: European Defense and Security at Astrium, Paris and Department of Economics, École Spéciale Militaire St Cyr Coëtquidan

Economics of Peace and Security Journal, 2009, vol. 4, issue 1, 6-13

Abstract: Technological superiority is a key element to achieve defense effectiveness, and R&D spending is crucial to access leading-edge technologies. Nevertheless, the current defense R&D model seems to reach its limits, leading to an out-of-control burden: In spite of spending almost USD70 billion yearly, defense R&D in NATO countries does not produce the expected results. This low effectiveness leads to criticism about today’s model of defense R&D, especially the channeling of credits by large incumbents through the Lead System Integrator model. Spurring disruptive technologies and path-breaking innovation requires an alternative approach. It is then interesting to analyze the possible use of venture-capital mechanisms to complement the mainstream approach to defense R&D. Even though the article does not develop a full analysis of the relationship between defense R&D and the principles of venture capital, it identifies criteria for such an alternative approach.

Keywords: Defense burden; defense technology; R&D; disruptive innovation; lead-system integrator; venture capital (search for similar items in EconPapers)
JEL-codes: G24 H61 O32 (search for similar items in EconPapers)
Date: 2009
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