ABSTRACT
Much commercial innovation is incremental as businesses build on their core competences. This means that much market activity is prone to path dependency. By contrast, military institutions are not tied to any commercial trajectory nor competitive advantage. They operate outside the market. This can be a benefit if their technologies have commercial application. Their new technologies can create new markets, new trajectories and new sources of economic growth. This chapter examines how the military in the United States and Israel have kept their nations at the technological frontier. In Israel, the military actually act as an incubator. Both countries benefit from a highly educated labour base and systems that support entrepreneurship.
