Defense Research Spending On Declining Path Till 2010

By Athanasia D. Baker

Non-defense science and technology spending is projected to exceed Defense Department research and development investments during the next five years, according to the Government Electronics and Information Technology Association (GEIA).

Spending on research and development by non-defense agencies and private industry steadily has increased since the early 1980s, said GEIA, in its recent forecast. By 2001, civilian research and development investments will be about the same as the Pentagon’s, approximately $40 billion. By 2005, non-defense investments in science and technology will approach $50 billion, according to the study.

Corporate research and development also is experiencing positive growth, while federal research and development is slowing. This trend, said GEIA, shows no indication of ending in the foreseeable future. By 2010, GEIA predicted that only half a percent of the gross domestic product will be spent on federal research and development, while industrial research and development will have grown to almost 3.5 percent.

The non-defense research and development efforts primarily are dominated by the National Institutes of Health. Other agencies that fund civilian research work include the National Science Foundation, the Agriculture Department, the Energy Department and NASA.

Within the Defense Department’s science and technology budget, the Army will see a 0.6 percent increase, the Navy almost 0.4 and the Air Force about 0.2 during the next decade. The science and technology funding is split into three different levels of programs: 6.1 for basic research, 6.2 for applied research and 6.3 for advanced technology development.

GEIA projected that 6.1 and 6.2 funding will increase at about the rate of inflation, while 6.3 will experience sporadic spurts of growth and periods of decline, as major Pentagon programs transition from development to acquisition.

The forecast for research and development levels out at $42 billion by 2010, while procurement increases from $63 billion to $70 billion. Military aircraft budgets will command about $20 billion.

In constant dollars, GEIA is forecasting an increase in the overall defense budget from $300 billion in 2001 to $333 billion by 2010. In current dollars, that becomes $411 billion. The budget increase is distributed as follows:


Information technology spending will increase from $43 billion to $51 billion by 2010, according to the study.

In the space arena, GEIA market projections for 2001 to 2010 show about approximately $180 billion in business opportunities. That amount is split between satellites–$130 billion–and launch services, at about $50 billion. Commercial satellites represent 44 percent of sales; military, 29 percent, and government civilian, 27 percent. For launch services, commercial work will constitute 51 percent of the market, 26 percent will be military, and 23 percent will be government civilian. By 2002, 70 percent of the world space market will be commercial, said GEIA.

The Air Force/Navy/Marine Corps joint strike fighter (JSF) will become a significant budget driver in the future, said GEIA. Hughes Petteway, of Honeywell Inc., said, the JSF "has a major impact on the future of all tactical fighter aircraft procurement for the next 20 to 25 years."

The 15 largest defense programs of the decade will comprise 70 percent of total funding, said GEIA. The F/A-18, the F-22 and the JSF will receive more funding then the remaining 12 programs.

During the next 10 years, research, development and procurement spending of $305 billion (between 2001 and 2010) will be dominated by new systems, which will take up 61 percent of the total. The remaining funds will go to modifications, upgrades, spare parts and support equipment.

GEIA projects that the start of a national missile defense program before 2002, and the fielding of various theater missile defense systems will drain funding from research and development accounts.

Ordnance and weapons will remain somewhat flat through the next 10 years.

Spending on military vehicles is expected to grow from $5 billion in 2001, to almost $7.5 billion in 2010. Seventy-one percent of that is for new vehicles. Twenty-seven percent will go to upgrades and modifications on existing armored combat vehicles.

For the Navy, GEIA predicts the submarine force structure will increase from the recommended level of 50 to 55. Surface ships will remain between 116 and 137. Aircraft carriers will stay at the current force level of 12.

The levels of force structure for each service will be among the focal areas of the upcoming Quadrennial Defense Review (QDR) of military strategy and requirements for the next four years.

Tom Davis, a GEIA member of the forecast team, who is employed by Northrop Grumman Corporation, said the QDR will address:

The debate about national security strategy also should be influenced by the fact that defense is not a top priority among the American public, said Davis.

He cited polls where 46 percent of the respondents thought defense spending is adequate today. About 78 percent supported a pay raise for military personnel.

Topics: Research and Development, Budget, DOD Budget

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