Employment and utilization of engineers among defense contractors

Defense contractors retain engineers for two reasons. First, engineers work on current-period production contracts. Second engineers conduct independent research and development (IR&D) and write bids and proposals (B&P) for future contracts. The amount of IR&D/B&P activity, however, understates the amount of effort devoted to learning that reduces the cost of future production. Even some engineers who work on current-period production may engage in learning, as a by-product of their efforts. This article develops and implements a model for estimating the volume of learning activity undertaken by four large manufacturers of military aircraft.