Examines how two countries with large defense industries have succeeded in integrating defense and commercial technology. Explores ways for the U.S. to use their lessons learned to preserve U.S. defense capabilities in the face of budget cuts. Photos, charts, and tables.

The Office of Technology Assessment, at the request of the Congress, has conducted a series of assessments of the Nation's ability to provide for its future national security technology and industrial needs. In the most recent report, Assessing the potential for Civil- Military Integration, OTA examined the potential for making greater use of common technologies, processes, labor, equipment, material, and/or facilities to meet both defense and commercial needs. This effort, often termed civil-military integration or CMI, is believed by many observers to be an essential element of a successful U.S. national security strategy. OTA's assessment found that greater CMI is possible, and confirmed the potential for cost savings and increased technology transfer as the result of increased integration. The assessment noted that CMI appears essential if defense is to take advantage of many rapidly developing commercial technologies.

Owing to the expected nature of combat in 2010, U.S. military forces face a pressing need to transform themselves for rapid response to an unpredictable threat. Rapid advances in commercial technology (particularly in electronics), coupled with the easy access to commercial technology enjoyed by potential adversaries, will compel DOD and defense contractors to excel at integrating commercial technology into defense systems. This integration of commercial and military manufacturing (ICMM) has begun on a small scale. By 2010, it needs to increase substantially if U.S. forces are to retain a technological edge. This report assesses the opportunities for increased ICMM in 2010 and beyond, identifies barriers, and recommends strategies for overcoming them.

An assessment of the pros and cons of CMI. Includes chapters on: 3 CMI strategies (readjustment, reform, and restructuring); an overview of integrating technology and the industrial base; buying commercial goods and services; integrating processes for goods and services; and continued segregation. Appendices: selecting a representative industrial sample, data collection, and more. Maps, charts and tables.

Technological innovation is essential to the future well-being of the United States. The ability of the nation to sustain economic growth, increase its standard of living, and improve human health and the environment depends, in many ways, on its success in developing and commercializing new products, processes, and services. The growing capabilities of competitors in Europe, Asia, and elsewhere around the world increasingly challenge the ability of U.S. firms to convert the nation's science and technology base into a competitive advantage. Such concerns have prompted much debate about the proper role of government in encouraging innovation and the commercialization of new technologies. To date, however, the debate has been hampered by an incomplete understanding of the ways in which firms develop and market new products, processes, and services and the barriers they must overcome in the process.

Fortifying China explores the titanic struggle to turn China into an aspiring world-class military technological power. The defense economy is leveraging the country's vibrant civilian economy and gaining access to foreign sources of technology and know-how. Drawing on extensive Chinese-language sources, Tai Ming Cheung explains that this transformation has two key dimensions. The defense economy is being reengineered to break down bureaucratic barriers and reduce the role of the state, fostering a more competitive and entrepreneurial culture to facilitate the rapid diffusion and absorption of technology and knowledge. At the same time, the civilian and defense economies are being integrated to form a dual-use technological and industrial base. In Cheung's view, the Chinese authorities believe this strategy will play a key role in supporting long-term defense modernization. For China's neighbors and the United States, understanding China's technological, industrial, and military capabilities is critical to the formulation of economic and security policies. Fortifying China provides crucial insight into the impact of China's dual-use technology strategy. Cheung's "systems of innovation" framework considers the structure, dynamics, and performance of the defense economy from a systems-level perspective.