Research and Development (R&D) in the Department of Defense (DoD) is shaped by competition. Competition is a complex, interactive process that is difficult to predict and has significant effects on the value of R&D investments over time. Initially promising investments may ultimately result in little value, due to the actions of others in a competitive environment. This article models the interaction of competition with R&D decision-making and introduces a simulation-based methodology to determine effective decision-making behaviors for the distinctive competition dynamics of DoD applications. The approach is built on the insight that R&D decision-making can be optimized for the resulting Post-Competition Value (PCV) of opportunities, rather than for their initial value. The authors demonstrate the value of this approach in three diverse applications across the DoD, including a case of defense industry companies, government laboratories, and nonprofits. In all cases, optimized behaviors are identified that achieve significantly more average value than standard alternatives that do not account for competition. This creates an opportunity for DoD leaders to systematically account for competition in their decision-making and enhance the value of their R&D investments.

Research and Development (R&D) in the Department of Defense (DoD) is shaped by competition. Competition is a complex, interactive process that is difficult to predict and has significant effects on the value of R&D investments over time. Initially promising investments may ultimately result in little value, due to the actions of others in a competitive environment. This article models the interaction of competition with R&D decision-making and introduces a simulation-based methodology to determine effective decision-making behaviors for the distinctive competition dynamics of DoD applications. The approach is built on the insight that R&D decision-making can be optimized for the resulting Post-Competition Value (PCV) of opportunities, rather than for their initial value. The authors demonstrate the value of this approach in three diverse applications across the DoD, including a case of defense industry companies, government laboratories, and nonprofits. In all cases, optimized behaviors are identified that achieve significantly more average value than standard alternatives that do not account for competition. This creates an opportunity for DoD leaders to systematically account for competition in their decision-making and enhance the value of their R&D investments.