The defense innovation machine: Why the U.S. will remain on the cutting edge

Author: Eugene Gholz and Harvey M. Sapolsky


American security policy discussions commonly warn that the United States is falling behind technologically, especially vis-à-vis China. However, the U.S. military remains at the cutting edge because of its well-developed defense innovation system. No nation (or combination) comes close to U.S. investment in defense R&D. Unmatched political concerns about avoiding casualties, inherent rivalry among participants in the U.S. defense innovation system, and traditional American openness to immigration and new ideas drive the investment. The overly alarmist warnings come from a thriving threat assessment system that continually searches for potential military dangers and technological challenges. The warnings feed the defense innovation system.


The United States is the most powerful nation in the world.1 It has the most powerful military, the biggest economy, and the most dominating culture. It is the world’s leader in science, engineering, and medicine. Its universities are the most admired. Its corporations are the richest and most successful. People eat Big Macs, drink Coca Cola, fly on Boeings, use their iPhones, and watch Hollywood movies around the globe. Everyone knows the name of the American president, what the CIA does, and who you should call if there is trouble on your border.

The United States is also a very secure country. It is surrounded by two big oceans and two unthreatening neighbors. Its surveillance systems scour the globe looking for dangers. It has nuclear weapons, a Navy and Coast Guard on constant patrol, an Air Force on high alert and with a global reach, and an Army and Marine Corps second to none in capability and recent combat experience.

But many Americans believe that this is all slipping away, that America is becoming vulnerable and losing its power and dominance. They cite internal and external sources of the vulnerability. American power, they claim, is being frittered away by a dysfunctional Congress, an incompetent president, and a bloated, slow moving, gold-plating acquisition bureaucracy that cannot keep up. Indecision and gridlock have seemingly become the American Way of government. Meanwhile, some fear that agile rival nations, specifically including China, can tap fast moving commercial technology to build modern weapons that will defeat the United States.2

Here we examine these concerns that the American military advantage in the Post-Cold War era has dissipated in large part because the Defense Department lags behind in developing advanced technologies. Our judgment is that the American defense research and development system, as honed during the Cold War and expanded since, is fully capable of handling any military challenge. It is a gigantic technology-generating, innovation-producing, war-fighting machine. U.S. ‘hard’ innovation capabilities – ‘input and infrastructure factors’ like R&D facilities, human capital, access to foreign technology, and availability of funding – far outstrip those of its potential rivals, even though those factors are the ones often thought of as easier for catch-up countries to obtain.3 Despite warnings that the United States no longer spends enough on R&D and that Chinese R&D spending is surging, the reality is that the United States dramatically leads in military innovation investment. In functional terms, the United States dominates all other countries, including China, in ‘input factors,’ starting with resource allocations to defense research and development.


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