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weapons systems. Lot sizes and production rates for milta systems are low and budget cuts
often lower rates still further as production is stretched out over a longer period. Commercial
products are typicaly built in larger quatities and at higher rates, although many commercial
products are produce in far smaller quantities than the consumer electronics devices and cas
that are often held out as "typica" commercial products.
Finally on this list, defense procurement policy has enforce a separtion between a system's
R&D and its production: to prevent contractors from deliberately underestimating R&D bids in
the seure knowledge that they could recver their costs and then some in the subseuent
procurement, legislation has decree that milta production contrcts be recompute once the
R&Dhas been complete. In the commercial world, however, a company does not go through
the effort of designing a new product without some expetation that the product wil eventualy
be manufactured. Furtermore, R&D does not stop once the system is in production; market
competition promotes continued redesign and improvement.
Differences between ~ Interests of National Security Policy an Economic Competitiveness
Policy
In addition to the strctural differences between defense and commercial activities described
above, dual-use tehnology policies also must accunt for those areas where milta seurity
interests cal for policies that differ from, or even conflct with, policies for improving this
countr's international ecnomic competitiveness. Such differences or conflcts might make it
preferable to decuple cert fields of milita tehnologies from their commercial counterpars,
for example, or to limit the Deparment of Defense's role in commercial technology policy.
Conflcting Goals
A well known example where the goas of seking milta superiority and of promotig
America high-tehnology industr collde is the issue of export controls. Limiting the export
of high-tehnology products or components in order to limit the tehnologica development of
potential adversaes inherently conflcts with attempts to promote ths countr's export saes and
improve its balance of trde.
Differences in Critica Technologies
Although many dual-use technologies ca be identified that are vita to both milta and
commercial activities, other areas of technology do not find equaly strong support in both
setors. For example, DoD is heavily involved in the aerospace and the electronic industres,
with the federa government estimated to fund 82 percent of the former industr's R&o.and 43
percent of the lattr's for 1989. Other industres are oriente much more strongly towards the
commercial setor. For example, the government wil fund only an estimated 3 percent of the
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