Recent research from the Center for Strategic and International Studies (CSIS) raises some important questions about the direction and focus of Defense Department research and development funding.

According to Andrew Hunter, head of CSIS’s Defense Industrial Initiatives Group, recent data documents a nearly 50 percent drop in spending on systems design and development (SDD) — a critical part of the R&D continuum — amounting to billions of dollars in reductions over the last four or five years. Over the same time, CSIS’s research shows an almost dollar-for-dollar increase in spending on alternative acquisition methods, especially Other Transactions Authority (OTA) contracts and, to a lesser extent, so-called “mid-tier” acquisitions. Hence, the question raised by CSIS: Are we short-circuiting long-term research and development in favor of more immediate opportunities for capability advancement?

The question is an important one and has real ramifications for the nation’s long-term battlefield dominance. And while the data itself certainly does not prove a correlation or the existence of a problem, it offers a good jumping off point for a more intensive examination. It also offers an important opportunity to assess traditional views of systems development against the intersection of commercial technology development as they relate to future war-fighting capabilities.

At its core, the question is really a contemporary version of that which drove many of the acquisition reforms of the 1990s. Those reforms were, in part, an effort to address the fact that while the research and development landscape had fundamentally shifted, the government’s approach to R&D and the marketplace had not. By the mid-1970s, private sector investments in research and development had, for the first time ever, surpassed the government’s; and the gap between the two had consistently widened. Studies also showed that just the 75 largest technology companies were spending more annually on R&D than the entire defense department; and about 75 percent of them would not do business with the government, especially in R&D.