The current major defense trends affecting optical technology include increasing reliance on commercial components to reduce costs, use of lower-risk technology to cut system development time in half, and pursuit of only those technologies judged to have the greatest potential impact on national defense (Defense News, 1996). The cost advantages of using commercial components for niche military applications arise from their large market base and designs for minimal product cost. For example, the use of commercial computer displays in military field equipment could result in considerable savings, provided the displays are fully functional in the military environment. A grand challenge for developers of military systems is the incorporation of commercial designs, components, and test capabilities into military systems that must not only work in extreme conditions, but also interoperate reliably with other military equipment. Economic considerations also favor small suppliers with lower overhead costs and in some cases the use of technology developed with government support. These are profound changes for system acquisition.

Even in this age of reduced threat levels, there is still an overriding requirement for DOD to invest in technology that provides unique military advantages. Some argue that the return on R&D investment, in this time of declining defense budgets, is larger than for any other investment and essential for DOD to preserve its edge. This argument would tilt investment to new technology to preserve the U.S. edge, since the use of commercial components in current systems levels the playing field for our competition. Systems and system components must meet military field requirements; these are severe environments in which commercial equipment often experience high failure rates because commercial design requirements do not encompass severe stress conditions. There is little overlap between optical systems for defense and commercial markets. Commercial industry has little incentive to include DOD requirements in its designs since DOD makes up a small part of its market, particularly when the changes would increase product cost. Compounding the problem are reductions in R&D funding discretion by the services, with greater reliance on work at small commercially oriented firms funded through the Small Business Innovative Research (SBIR) program.

Optics has matured during the past 30 years to the extent that it is now on a par with electronics and microwaves in defense systems. Optics is the nucleus of entirely new systems and system concepts that are essential to U.S. national defense. Measuring the stature and effectiveness of a technology is always problematical. Since fieldable (operational) military capability is the "bottom line" for the military, implementation of a technology is one measure of its effectiveness. Figure 4.1 is a broad depiction of the impact of optical technology

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