The defense industry has a long history of innovation. Government funding has fueled the industry's innovation engine, from advanced battlefield technologies to those ubiquitous to modern-day life. For decades, these innovations took place largely within contractors' four walls, but this model alone no longer works. After peaking in the late 1980s, research, development, test and engineering budgets had experienced a 20% real decline by the 9/11 attacks. The war on terror led to a temporary spending boom, but congressional budget restrictions and the need to recapitalize continue to put pressure on spending, just as emerging threats are driving the need to innovate.
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