(image credit: NASA (triptic) D. Wood (panel))

Encouraging Innovation in Technology-intensive Government Organizations

The engineering systems required for space and defense applications are typically technologically complex and expensive, with long development times and short production runs. They are designed to the specifications of a particular customer, whose needs often exceed the current technological state-of-the-art. However, despite this implicit requirement to innovate, it is debatable whether traditional government acquisition practices are achieving this goal. While impressive technological feats are unquestionably being achieved, the question remains whether the exorbitant price tags that have become commonplace are truly required to achieve the rapid advances in system functionality. Or, whether there exist more efficient approaches to encouraging innovation in the monopsony (one-buyer) market structure, characteristic of government acquisition.

Although innovation dynamics in general have been studied extensively, little work has been done to understand the fundamental dynamics underlying complex product innovation in a government monopsony, the typical scenario in government acquisition. This poor understanding can lead to an inappropriate choice of mechanisms and approaches for encouraging innovation and, ultimately, to an environment that does not foster successful innovation. Our research seeks to fill that gap, bringing insights from the fields of organizational behavior, economics, technology innovation management and systems architecture to bear on the challenge of encouraging innovation in this unique market structure and product context.