The wellspring of this prosperity is not just the Defense Department’s vast payroll, nor just the fat profit margins of its contractors. It is also the Pentagon’s unmatched record in developing technologies with broad public benefits — like the Internet, jet engines and satellite navigation — and then encouraging private companies to reap the rewards.
And as the Pentagon confronts the prospect of cutting its budget by about 10 percent over the next decade, even some people who do not count themselves among its traditional allies warn that the potential impact on scientific innovation is being overlooked. Spending less on military research, they say, could reduce the economy’s long-term growth.
“If catalyzing innovation is going to be an important part of our economic strategy, then we better be careful how we handle” the military budget, said Daniel Sarewitz, director of the Consortium for Science, Policy and Outcomes at Arizona State University. “I’d like to see a lot less weapons and a lot less focus on them, but it’s not all about that.”
In the political debate over Pentagon cuts, the potential effect on innovation has been largely ignored. Pentagon officials and their allies have instead warned that a sharply smaller military budget would expose the nation to harm, and that such cuts would result in a large and immediate rise in unemployment.
Independent economists and analysts say that concern about the short-term economic impact is largely misplaced. While reducing the Pentagon’s budget would cause considerable economic pain — some workers would lose their jobs; some contractors would lose their most important customer — research suggests it would be less painful than cutting other kinds of government spending, like education or transportation.
A significant portion of the military budget, including the wages of armed forces personnel, is spent abroad. And military spending in this country, like building a new runway at a domestic Air Force base, tends to bring fewer spillover benefits than many other forms of government spending, like a new runway at a commercial airport.
“As a source of job creation, military spending is not particularly good,” said Robert Pollin, an economist at the University of Massachusetts, Amherst. “You can argue for the benefits in geopolitical terms, but if we’re talking about jobs and the economy, it doesn’t make sense.”
The one exception may be Pentagon spending on research and development.
The Pentagon spends about 12 percent of its budget in that area, about $81.4 billion during the most recent fiscal year. That is roughly 55 percent of all federal spending on research and development.
Administration officials, members of Congress and Pentagon planners could choose to spare the research budget when making cuts. Historically, however, significant reductions to the Pentagon’s budget have led to reductions in research spending, too. Through both flush and lean times for the Pentagon, research spending has accounted for a roughly similar share — between 9 and 13 percent — of the overall budget.
It is a pot of money with a remarkable record of success. The Navy, which started budgeting for research in 1946, counts 59 eventual Nobel laureates among the recipients of its financing, including Charles H. Townes, whose pioneering work in the development of lasers laid the groundwork for compact discs and laser eye surgery. The other armed forces claim similar numbers of laureates, albeit with considerable overlap.
The results of this research played a key role in the blossoming of high technology as a driver of the nation’s economic growth. In northern Virginia, many of the largest companies continued to work for the Pentagon while also pursuing private contracts.
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