University of California Institute on Global Conflict and Cooperation

Department of Defense concerns over an eroding technological and capabilityadvantage have spurred the development of the Third Offset Strategy to focus investments on areas of greatest US competitive advantage. However, flat defense budgets and rising operations and maintenance costs will continue to constrain procurement and research, development, test, and evaluation (RDT&E) spending within the US defense budget over the near and medium term. Later-stage RDT&E for the technological maturation of weapons systems and platforms in development will be more impacted. This brief outlines US defense budgetary trends for the overall defense budget and for RDT&E spending, highlights areas of particularrisk, and describes the potential impacts on US defense technological innovation.