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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. 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. Teichgraeber, Andreas & Van Reenen, John, 2022. "A policy toolkit to increase research and innovation in the European Union," LSE Research Online Documents on Economics 117801, London School of Economics and Political Science, LSE Library.
    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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