Opening up Military Innovation: Causal Effects of ‘Bottom-Up’ Reforms to U.S. Defense Research

100 Pages Posted: 13 Apr 2021 Last revised: 24 Aug 2021

See all articles by Sabrina T Howell

Sabrina T Howell

New York University (NYU) - Leonard N. Stern School of Business; National Bureau of Economic Research (NBER)

Jason Rathje

Government of the United States of America - U.S. Air Force Academy

John Van Reenen

Massachusetts Institute of Technology (MIT)

Jun Wong

New York University (NYU)

Date Written: August 24, 2021

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.

Keywords: Innovation, defense, R&D, procurement

JEL Classification: O31, O32, O38, H56, H57

Suggested Citation

Howell, Sabrina T and Rathje, Jason and Van Reenen, John and Wong, Jun, Opening up Military Innovation: Causal Effects of ‘Bottom-Up’ Reforms to U.S. Defense Research (August 24, 2021). Available at SSRN: https://ssrn.com/abstract=3825034 or http://dx.doi.org/10.2139/ssrn.3825034

Sabrina T Howell (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States
212-998-0913 (Phone)

HOME PAGE: http://www.sabrina-howell.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jason Rathje

Government of the United States of America - U.S. Air Force Academy

John Van Reenen

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Jun Wong

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
259
Abstract Views
1,091
rank
161,578
PlumX Metrics