A brain drain, red tape, and pinched budgets could turn the $8 billion network of defense labs into a scientific backwater
At the U.S. Army's Aviation Systems Command in St. Louis, helicopter designer Roger Smith was faced with an important career move. The Army was transferring its helicopter-design activities to San Francisco, a much more expensive place to live. But Smith's salary was set by federal law and couldn't be raised to reflect the higher cost of living on the West Coast.

Looking at an opportunity that he couldn't afford to accept, Smith sent his resume off to several civilian helicopter companies. Within a short time he was hired by McDonnell Douglas in Mesa, Ariz. "They also gave me a pay raise," notes Smith. His two closest colleagues on the project had to go through similar soul-searching, with the same result: they left the Army and received more money upon...

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