A BRAVE LEAP OR A GRADUAL CLIMB? THE DYNAMICS OF INVESTMENT IN R&D OF INTEGRATIVE TECHNOLOGIES
Abstract: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.
Document Type: Research Article
Affiliations: Faculty of Management, Tel Aviv University, Tel Aviv, Israel
Publication date: 2006-06-01