WASHINGTON — In an era of shrinking federal investment in research and development, heightened cooperation is needed to stimulate innovation in the national security realm, Northrop Grumman CEO Wes Bush said Tuesday.

Speaking at the Center for Strategic and International Studies in Washington, D.C., Bush noted that while the US still spends more than most countries on overall defense R&D, some countries — particularly China — are quickly closing the gap.

The US ranked sixth 6th in the world in the 2014 Global Innovation Index, with China far behind at 29th, Bush said. But from 2009 to 2012, China's defense R&D spending as a percentage of its GDP rose by about 18 percent annually as China's overall economy grew by 9 percent annually. Over the same period, the US GDP grew by a modest 1 percent, but defense R&D spending shrank by about 7 percent each year.

Commercial innovation, while valuable, cannot substitute for concerted defense R&D spending, largely because of the different business models in the private sector, he said.

"Commercial technology, quite correctly, follows the money wherever it leads," he said. If it stops being profitable, investment is discontinued. Additionally, there is little interest in developing stealth technology, or the ability to jam the radar of a hostile aircraft, or offensive cyber capabilities or advanced missiles in the commercial sphere, he said.

"The defense business model requires it to stand by the customer," just as Northrop Grumman continues to service the B-2 stealth bombers although they are no longer in production, he said.

Sequestration has hurt innovation, and not just through the reduced spending on R&D, he said. It is also hurting the workforce, particularly individuals drawn from science, technology, engineering and math (STEM) backgrounds, he said.

Higher education in the US is a magnet throughout the world, attracting many of the best and brightest STEM minds to study in the United States, he said.

"We've got to make sure that we value that asset in the US," he said.

But with the budget cuts to education funding under sequestration, the pipeline of qualified talent to advance innovation is running the risk of drying up, he said.

Sequestration "is having a devastating impact on R&D, on our research universities, and on the faculty," he said.

During a panel discussion with Bush, Dr. Arati Prabhakar, the director of the Defense Advanced Research Projects Agency, said that unlike engineers of her generation, today's STEM graduates are rarely interested in working in national security.

The ability to take technology and make it operational in the hands of the American war fighter has atrophied since the end of the Cold War, and particularly during the US' two ground wars in the Middle East, she said.

While the branches of the military are trying to improve their communication and coordination on R&D, the better goal is to deliver on the mission and change national security outcomes, she said.

Bush added that he is encouraged by DoD acquisitions chief Frank Kendall's recent statements that the Pentagon needs to do a better job of communicating with contractors and articulating its needs so that effort isn't wasted on programs that are not useful.

"I'm encouraged because I see something happening in our innovation communities: the recognition of the power of partnerships," Bush said. "To me, R&D is a partnership issue, and it's clear that Frank embraces the partnership model."

Email: aclevenger@defensenews.com

Twitter: @andclev

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