The U.S. Department of Defense is the largest consumer of advanced technology and technical services in the world, awarding $400 billion in contracts each year. You’d think all that demand would be a source of strength for U.S. manufacturers. After all, $400 billion is a quarter of the value of all manufactured goods produced in the U.S. in a typical year, and the vast preponderance of military procurement dollars are spent within U.S. borders. However, the way the Pentagon goes about making technology investments minimizes the benefits of the defense budget for the broader economy. That’s bad news at a time when the Treasury is running out of ideas for stimulating the economy and military outlays are one of the few tools left for creating new jobs. I have written a commentary on that subject for Forbes.com that can be found here.
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