The Imperative of Productive R&D

In 2019, the United States spent $55 billion on defense R&D. We know surprisingly little about what that funding has achieved. We have no way of measuring its productivity

A couple of weeks ago- April 22, 2021, George Mason University’s Government Contracting Center held a webinar “Measuring R&D Productivity” that sought to explore not only the concept, but how well the defense industry measured up. I found this topic particularly timely just as there are more and more questions around whether DoD is spending enough on R&D or not.

A key question I wrestle with is, “Do we need to be spending more on R&D and how would we know?” The conventional measures of R&D are all inputs — # patents, # PhDs, etc. What about outputs? What is good R&D productivity?

Ann Marie Knott who created a measure of research productivity was joined by Byron Callan of Capital Alpha Partners, a financial analyst, and Kevin Fahey former Assistant Secretary of Defense for Acquisition. We invited Anne Marie Knott to panel because the metric she created — Research Quotient — allows firms to measure their R&D productivity and compare themselves with benchmarks from within their industry sector. It’s the closest objective measure we have, at least for…