The impact of procurement-driven technological change on U.S. manufacturing productivity growth

David Saal

Defence and Peace Economics, 2001, vol. 12, issue 6, 537-568

Abstract: As we enter the 21st Century, technologies originally developed for defense purposes such as computers and satellite communications appear to have become a driving force behind economic growth in the United States. Paradoxically, almost all previous econometric models suggest that the largely defense-oriented federal industrial R&D funding that helped create these technologies had no discernible effect on U.S. industrial productivity growth. This paper addresses this paradox by stressing that defense procurement as well as federal R&D expenditures were targeted to a few narrowly defined manufacturing sub-sectors that produced high tech weaponry. Analysis employing data from the NBER Manufacturing Productivity Database and the BEA' s Input Output tables then demonstrates that defense procurement policies did have significant effects on the productivity performance of disaggregated manufacturing industries because of a process of procurement-driven technological change.

Keywords: Productivity; R&D; Procurement; Manufacturing; United States; Technological Change (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (12)

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DOI: 10.1080/10430710108405002

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