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

Author

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

Abstract

For governments procuring innovation, one choice is whether to specify desired products (a "Conventional" approach) or allow firms to suggest ideas (an "Open" approach). Using a U.S. Air Force R&D grant program, where Open and Conventional competitions were held simultaneously, we find that Open awards increase both commercial innovation and technology adoption by the military. In contrast, Conventional awards have no positive technology effects, but do create more program lock-in. The Open program attracts new types of applicants (e.g. start-ups), but openness also has a differential impact beyond inducing selection. These results suggest benefits from open approaches to innovation procurement.

Suggested Citation

  • Sabrina T. Howell & Jason Rathje & John Van Reenen & Jun Wong, 2021. "Opening up military innovation: causal effects of reforms to U.S. defense research," POID Working Papers 004, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:poidwp:004
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    Citations

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    Cited by:

    1. 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.
    2. Leonardo M. Giuffrida & Emilio Raiteri, 2023. "Bureaucratic Frictions and Innovation Procurement," CESifo Working Paper Series 10775, CESifo.
    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.
    4. 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.
    5. Chiappinelli, Olga & Giuffrida, Leonardo M. & Spagnolo, Giancarlo, 2025. "Public procurement as an innovation policy: Where do we stand?," International Journal of Industrial Organization, Elsevier, vol. 100(C).
    6. Pallante, Gianluca & Russo, Emanuele & Roventini, Andrea, 2023. "Does public R&D funding crowd-in private R&D investment? Evidence from military R&D expenditures for US states," Research Policy, Elsevier, vol. 52(8).
    7. Sarah M. Rovito & John Kamp & Amir Etemadi, 2025. "Exploring Department of the Navy SBIR Phase III awards and corresponding public sector commercialization success factors," The Journal of Technology Transfer, Springer, vol. 50(4), pages 1363-1395, August.

    More about this item

    Keywords

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    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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