A Brave Leap or a Gradual Climb? The Dynamics of Investment in R&D of Integrative Technologies

Our paper explores the optimal investment in integrative technologies (such as command and control systems), which are a major part of defense R&D at the beginning of the 21st century. Employing a dynamic optimization framework, we find that under linear development costs, it may be optimal or nearly optimal to build military forces using a myopic, short-termed, approach. In such cases, it would be optimal to transform an armed force into a network-centric environment within just a few years. When development costs are convex however, early investment in technological infrastructure is required, extending the transformation period over more than a decade.

Setter, Oren & Asher Tishler, 2006. ‘A Brave Leap or a Gradual Climb? The Dynamics of Investment in R&D of Integrative Technologies’, Defence and Peace Economics 17(3): 201-222.