Government plays an important role in R&D investment through spending on the military, but some have questioned whether this spending has real benefits for innovation. A new paper shows that military spending, specially defense procurement from U.S. businesses, stimulates more R&D and more patents than sales to civilians. The military buildup in the 1980s spurred innovation and defense cuts in the 1990s slowed it down. Unfortunately, recent budget cuts are likely to hurt innovation even more.
