The role of military R&D in the civilian economy has been a controversial one. With rapid changes in the geopolitical power structure, the debate about the defence technology has assumed a higher level of significance. The defence sector has been a driving force in many new technologies, such as developments in micro-electronics, computers, semiconductors, aviation etc. While one can marvel at the contributions of these technologies on the growth of the civilian economy, one can argue about the effectiveness of defence R&D in producing and diffusing technology suitable for the civilian sector. This paper investigates the pattern of transfer of technology between defence firms and other organizations. Using eight large defence contractors, Boeing, General Dynamics, Grumman, Lockheed, Martin Marietta, McDonnell Douglas, Raytheon and United Technologies, as sample, we have analysed their patents. We have been particularly interested in the pattern of citations. By using patents as the 'tracer' in the technology interaction, we have been able to characterize the pattern, nature and effectiveness of the technology interactions between the defence and non-defence sectors. In the exchange of technological information between a firm and other organizations, we have defined technology input to a firm X as the citations of patents made by firm X. Similarly, technology output of firm X is defined as the number of citations received by its patents from other patents of other organizations. Once we know the identity of the organizations, we can observe the technology exchange between the defence and the non-defence sectors, between the US defence firms and foreign firms. The intensity and efficiency of transfer of technology are computed from these data.
