BOSTON—An informal network of local and state activists is using economic rather than political arguments in a campaign to divert spending on military R&D to civilian projects.

The effort to reduce a local economy's dependence on defense con tracts and replace it with a variety of civilian R&D projects is known most often as economic conversion, although it goes by a variety of other names. Based on a desire to avoid the historical fluctuations in funding that have plagued communities whose scientists and engineers work chiefly for defense con tractors, the movement has gained support from those who seethe latest buildup in military spending coming to an end. But disagreement remains on the economic impact of such conversion efforts.

A bill passed June 2 by Connecticut legislators provides $12,000 in seed money for a permanent task force on manufacturing that hopes to offer incentives and capital to companies that switch...

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