Civil and Military R&D Spending

This paper on the numerically controlled (NC) machine tool industry is part of a broader study conducted by the RAND Graduate School's Civil and Military Technology Workshop led by Dick Neu. The class efforts were directed towards analyzing the relationship between research and development (R & D) investment in the military and civilian sectors of the U.S. economy. That is, we addressed the topic of how military R & D investments might have a synergistic or spillover effect upon the civilian economy, or relatedly, how military investments might be used to overcome existing market failures in dual military/civilian industries. Additionally, we looked for evidence to suggest that military investments have had a negative impact on civilian technological development, by crowding out civil investments and raising the market prices of inputs. Each student wrote a substantial case study of an industry to evaluate the governments's role in its success or failure. Besides NC machine tools, the industries included airframes, parallel processing, the early development of computers, and semiconductors. (kr).