WHOI-90-52

international ecnomic competitiveness -- accrding to such measures as balance of trade,
productivity growth and world market share -- is eroding.
These two problems -- fielding effective and affordable defense systems and producing
commercial products that are better or cheaper that their competitors -- are the ones that deserve
our focuse attention. Understading the dual-use relationship is interesting only if it helps us
solve the problems faced individually by our defense and commercial setors.
The Defense Deparment and Dual-Use Technologies Today
In the decdes following World War II, Deparment of Defense (DoD) investments in fields such
as jet aircraft, computers and industral electronics, advance the state-of-the-ar and contributed
to significat U.S. advantages in foreign trade. Notably, DoD procurement dollars were often
more effective than resech and development (R & D) dollars in stimulating these fields. The
United States dominated the world technologically and the Defense Deparment led U.S. industry
in severa areas of technology.
Since the 1950's and 1960's, however, other industrialized democracies have caught up with
and in places surpasse -- the United States. And technology in civilan high-technology industry
has caught up with -- and in places surpasse -- that in the defense setor. Since the 1960's, for
example, Japan and West Germany have spent a larger fraction of their Gross National Product
(GNP) on civilan R&D than did the United States. Since the 1970's, the fraction of GNP spent
on R&D in these countres has matched or exceeed the tota U.S. proporton, even when the
enormous U.S. defense R&D investment is included.
A vibrant and increasingly internationalized civilan high-technology industry exists today, with
DoD now being a minor customer in many areas (such as microelectronics) that it had originally
pioneered and for which it was for many yeas the dominant customer. To keep abreast of the
latest tehnologica advances, the Defense Deparment must be able to draw on commercial
technologies develope in corprations that may not nee, or even be paricularly interested in,
DoD's business. In some areas of technology, one might say that the tal has become the dog.
The Deparment of Defense finds itself attrcting increasing attention, much of it self-generated,
as the possible or principal agent for revitaizing our commercial technology base. This attention
is in par due to DoD' s historica role in pioneering advance tehnology; for better or worse,
the national seurity apparatus of this countr has becme the government's prime repository for
managing large-scae technologica enterprises. For others, noD's managerial experience is less
importt than its political expeience: national seurity provides a rationale for the federal
government to engage in activities it might not otherwise pursue, paricularly with respet to
involvement in commercial business. And there is always the lure of what Professor Lewis
Branscomb cals the "Wily Sutton" theory of industral policy, with the Deparment of Defense
being "where the money is. "
56