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Is War Necessary for Economic Growth? Military Procurement and Technology Development

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  • Ruttan, Vernon W.
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    Abstract

    New radical general purpose technologies have been the drivers of economic growth in the United States economy in recent economic history. In this paper I review the role of military and defense related research, technology development, and procurement in the development of the aircraft, nuclear power, computer, semiconductor, internet and the space communication and earth observing industries. The development of each of these industries would have been substantially delayed in the absence of support for research, technology development and procurement by the military and defense related agencies. Rates of productivity and output growth would have been substantially slower. By the early 1990's it was becoming clear that changes in the United States economy, of the defense industrial base, and in United States military and defense strategy meant that the defense and defense related industries would no longer play a prominent role in the development of new general purpose technologies. There has been a relative decline in investment in basic research and in early stage technology development in the private sector. The United States has yet to develop a coherent strategy for the public support of commercial technology development. My own sense is that when the history of United States technology development for the next half century is eventually written it will be characterized by incremental rather than revolutionary changes in both military and commercial technology. It will also be written in the context of slower productivity and output growth than the rates that prevailed in the United States during the first several post war decades or since the beginning of the information technology bubble that began in the early 1990s.

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    Paper provided by University of Minnesota, Department of Applied Economics in its series Staff Papers with number 13534.

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    Date of creation: 2006
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    Handle: RePEc:ags:umaesp:13534

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    Related research

    Keywords: International Development; Research and Development/Tech Change/Emerging Technologies;

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    1. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
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    1. Devon Swezey: In Defense of Bill Gates
      by Devon Swezey in huffington post business on 2010-08-04 21:58:35
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    Cited by:
    1. Naude, Wim, 2007. "Peace, Prosperity, and Pro-Growth Entrepreneurship," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    2. William Bonvillian & Richard Atta, 2011. "ARPA-E and DARPA: Applying the DARPA model to energy innovation," The Journal of Technology Transfer, Springer, vol. 36(5), pages 469-513, October.
    3. Philip A. Curry & Steeve Mongrain, 2008. "What is a Gang and Why Does the Law Care?," Discussion Papers dp08-04, Department of Economics, Simon Fraser University.
    4. Viktor Slavtchev & Simon Wiederhold, 2011. "The Impact of Government Procurement Composition on Private R&D Activities," Jena Economic Research Papers 2011-036, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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