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Federally funded, high-risk, capital-intensive research and development is critical to ensure the flow of innovation that provides the basis for a sustainable competitive advantage for U.S. vendors. The modern industry structure of aeronautics places a significant element of the vitality of the R&D enterprise with supply chain vendors. This issue paper describes changes in the commercial aircraft industry that have lead to an increased role of the supply chain in the R&D of aircraft components. It evaluates the allocation of federal R&D funding to the supply chain relative to the increased role of the supply chain in performing R&D. It also examines the roles that federal R&D agencies can play in overcoming inefficiencies in R&D that are inherent to a distributed supply chain.

The research described in this report was performed under the auspices of RAND's Science and Technology unit.

This report is part of the RAND issue paper series. The issue paper was a product of RAND from 1993 to 2003 that contained early data analysis, an informed perspective on a topic, or a discussion of research directions, not necessarily based on published research. The issue paper was meant to be a vehicle for quick dissemination intended to stimulate discussion in a policy community.

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