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Northrop CEO: Low DoD R&D Spending Puts US Tech Superiority at Risk

Sep. 16, 2013 - 03:45AM   |  
Aerospace Industry Leaders Urge Gov't To Find Solu
Northrop Grumman CEO Wes Bush warned a Washington audience on Monday that cuts to research and development — by both government and industry — puts US national security at risk. (Getty Images)
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NATIONAL HARBOR, MD. — Decades of slow Defense Department research and development (R&D) spending could harm US national security, as companies encounter difficulties recruiting top talent and early-stage research that yields significant innovation is reduced, Northrop Grumman CEO Wes Bush said on Monday.

Speaking at the Air Force Association’s Air & Space Conference, Bush described how DoD R&D spending had declined as a percentage of gross domestic product (GDP) going back to the 1960s, from about 1 percent of GDP to 0.25 percent of GDP in current projections.

“These ever thinner R&D budgets are insidious for many reasons,” Bush said. “Apart from the opportunity cost to our nation of pure technological breakthroughs, they also create a very dangerous risk aversion.”

While the cuts risk the development of technology, it’s the impact on recruiting that has Bush most concerned.

Roughly half of the defense industry’s technical workforce is of retirement age, he said, meaning heavy recruiting is required just to avoid a collapse of the talent pool. Typically, the sell to recruits is focused on the unique technology the defense industry develops.

“What advantage does our industry have over others? Well, quite simply, we do cooler stuff than they do,” Bush said. “Even that advantage that we have in selling ourselves is not assured, especially in these times.”

The cuts to R&D, and the shift of spending toward the fielding of more developed technologies and away from more fundamental research, can deter potential recruits from joining the industry, he said.

“When we’re risk-averse, that sends a very dangerous message to young engineers as they decide on their career paths,” Bush said.

In the past month, several DoD officials have vocalized their concerns regarding R&D spending, but much of their attention has been focused on company spending. A Defense News analysis published last month showed that top defense contractors reduced R&D spending as a percentage of sales over the past decade.

But Bush, who also chairs the Aerospace Industries Association’s board of governors, said industry is doing its best to protect its own spending in the defense downturn.

“Of course industry, for our part, we need to invest [in] our own R&D as well,” he said. “I know I can speak for most of the companies in our industry, the intention is to try as hard as we can to maintain that R&D investment as we go through this more difficult environment.”

Bush cautioned that it’s important that those making decisions not use the sequester as an excuse to allow R&D spending to decline.

“As much as we may want to sit back and say, ‘That’s the way it is,’ it’s a decision,” he said. “It’s a decision about our future.”

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