Opening up military innovation: causal effects of reforms to US defense research

Howell, Sabrina T., Rathje, Jason, Van Reenen, John ORCID: 0000-0001-9153-2907 and Wong, Jun (2025) Opening up military innovation: causal effects of reforms to US defense research. Journal of Political Economy. ISSN 0022-3808

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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 US 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 effects on new technology but do create more program lock-in. We present evidence that openness matters over and above inducing differential selection, for example, of less well-established firms. These results suggest benefits from open approaches to innovation procurement.

Item Type:	Article
Additional Information:	© 2025 The University of Chicago
Divisions:	Economics
Subjects:	J Political Science H Social Sciences > HB Economic Theory
JEL classification:	O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O32 - Management of Technological Innovation and R&D O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O38 - Government Policy H - Public Economics > H5 - National Government Expenditures and Related Policies > H56 - National Security and War H - Public Economics > H5 - National Government Expenditures and Related Policies > H57 - Procurement
Date Deposited:	10 Jun 2025 15:51
Last Modified:	06 Oct 2025 16:03
URI:	http://eprints.lse.ac.uk/id/eprint/128343

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