In the mid 1960s when I was most active in military intelligence, the United States’ internal orientation was reflected in its R&D expenses—more than 90% of private R&D expenses in the United States were for internal operations, and the tools and techniques for technology management were applied inside the R&D lab.
However, between 1965 and 1995, R&D managers in other nations (such as Japan, Germany, France, the Netherlands, and Finland) vastly improved the positions of their firms, at least in part, by focusing more on technical intelligence. The success of these efforts is evident in industries such as automobiles, specialty-chemicals, textiles, electronics, and pulp and paper. Responses by United States businesses began shifting R&D expenditures: in 1995, Industrial Research Institute estimates were that only about 60% of private U.S. R&D dollars were for strictly internal operations. U.S. firms continue to increase their commitment to alliances, joint ventures, and a variety of external networking mechanisms and scanning activities. This trend is a sign cant adjustment in the attitudes and outlook of technology development managers from the previous century.
The graph to the left is for Federal R&D spending, but it is certainly in line with the extramural spending on the part of firms worldwide. What percentage of the extramural dollars spent on legitimate research versus intelligence gathering, as is not surprising, is hardly reported by anyone.
In the past, formal methods for monitoring R&D in competitor organizations were not considered necessary because scientists and engineers could learn about advances informally from colleagues and other professionals. But in today’s global world, informal watching of the players, developments, and trends is usually not sufficient. What is needed is often called competitive technical intelligence (CTI)—systematic methods carried out by professionals to collect, analyze, and communicate (to relevant users) action-oriented information on external S&T threats and opportunities.
This distinction between external and internal attention is critical. CTI addresses the future needs of decision-makers and analysts from a uniquely external viewpoint to complement each organization’s tendency to focus inside the organization. One way to understand the shift from internal technology development to external technical intelligence is to examine the United States’ response to the R&D strategies of firms from other nations
 Figure 1 is from ScienceDirect, “Technological Forecasting and Opportunity Assessment,” by Gert T. duPreez and Carl W. I. Pistorius (19 August 1999), downloaded May 4, 2015
Historically, most commercial technology development has been focused inside the firm. In research and development (R&D) laboratories and company test sites, new technology was expected to emerge from internal sources. Company attention was therefore directed at day-to-day management of in-house ideas, projects, and technical operations. Now these behaviors are changing and R&D laboratories are seeking more information about developments outside their walls. Market competitors (such as General Electric and Westinghouse or IBM and Apple) are now becoming R&D competitors, often pursuing similar technical objectives for improved products and processes. Company laboratories and development centers recognize that technology is available from many parts of the world and that gaining an R&D edge requires more attention to exploiting the know-how developed by others. No matter where new technology comes from, the first firm to commercialize an advance is likely to capture the significant returns.
Therefore, no one should be surprised that such recognition is not limited to the United States.
“Top Official Admits F-35 Stealth Fighter Secrets Stolen” By Sydney J. Freedberg Jr. on June 20, 2013 at 2:21 PM
At a subcommittee hearing attended by just half a dozen Senators, the Pentagon’s top weapons buyer made a blunt admission: The military’s most expensive program, the stealthy F-35 Joint Strike Fighter, has been hacked and the stolen data used by America’s adversaries. Under Secretary Frank Kendall didn’t say by whom, but the answer is almost certainly China, a cyber superpower whose People’s Liberation Army Air Force has recently rolled out some suspiciously sophisticated stealth fighter prototypes of its own. The Russians also have skilled hackers and “5th Generation” stealth jet programs, but they’re not suspected of such direct copying, at least not yet.
 By Sydney J. Freedberg Jr. at Breaking Defense (June 20, 2013). Downloaded May 1, 2015