Defense R&D,General Purpose Technology and Economic Growth

Analysis of the impact of defense R&D on economic growth must take into account the theory of technology evolution. The history of technology development shows that the inventions of general purpose technology(GPT)in history often can be attributed to R&D endeavors of national defense departments. Although with the dual-use character, the GPT's technological trajectories in the defense and civilian sectors start with convergence, and then they will become more and more divergent as technology matures. Based on these insights, a formal GPT-driven model was constructed to analyze the impact of defense R&D on economic growth. Numerical simulation shows that due to a more balanced resources allocation between defense and civilian fundamental research sectors, civilian-military integration national science and technology resources allocation mode can achieve the best growth performance in the long term. Today, China is approaching the international technology frontier. To accelerate and smooth the transition into an innovation-driven economy, it is necessary for China to increase the defense R&D outlay continuously and build a well-functioning military-civilian integrated technology base.