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

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  • Sabrina T. Howell
  • Jason Rathje
  • John Van Reenen
  • Jun Wong

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.

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  • Sabrina T. Howell & Jason Rathje & John Van Reenen & Jun Wong, 2021. "Opening up military innovation: causal effects of 'bottom-up' reforms to U.S. defense research," CEP Discussion Papers dp1760, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1760
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    Cited by:

    1. Andreas Teichgraeber & John Van Reenen, 2022. "A policy toolkit to increase research and innovation in the European Union," POID Working Papers 025, Centre for Economic Performance, LSE.
    2. Daniel P. Gross & Bhaven N. Sampat, 2022. "Crisis Innovation Policy from World War II to COVID-19," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 1(1), pages 135-181.
    3. Chiappinelli, Olga & Giuffrida, Leonardo M. & Spagnolo, Giancarlo, 2023. "Public procurement as an innovation policy: Where do we stand?," ZEW Discussion Papers 23-002, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    innovation; defense; R&D; procurement;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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