More than half of Northrop Grumman’s [NOC] tech professionals in many of its core disciplines are eligible for retirement, a challenge in an era of declining government research and development (R&D) funds, according to the company’s CEO.

“We have to have a compelling reason to have the best and brightest come work in our collective community, whether it’s industry or government or labs,” Northrop Grumman President, CEO and Chairman Wes Bush said yesterday at a Center for a New American Security (CNAS) conference in Washington. “If we don’t have a robust R&D program, we will not get the best. It’s that simple.”

Bush said Defense Department R&D investment has steadily declined since the 1960s, when  one percent of the United States’ gross domestic product (GDP) was spent on defense R&D. Bush said that amount was reduced to 0.75 percent in the ’80s and 0.5 percent in the last decade. Bush said current budget projections show defense R&D being reduced to 0.25 percent of GDP.

“Whether that’s an overt strategy or not, it’s a decision,” Bush said. “It’s a decision that we’re making about that investment in not only technological superiority, but the readiness of the industrial base.”

Bush said reduced defense R&D affects the readiness of the industrial base because it has to have the capacity to get things done at all times and have the human capital to do it. Bush said even if Northrop Grumman has to make tradeoffs, it will continue to invest in R&D because it’s the company’s engine.

But Bush said a big challenge going forward will be to replace that glut of retirements in key areas that will eventually hit the company.

“Our challenge, obviously, is to replace that technical talent,” Bush said. “Even in a downturn, we’re going to be hiring aggressively. Our peers in the industry are going to be hiring through a downturn to try and manage this human capital base we have to have so we can be ready.”

Adding to that challenge will be the global options for young engineers coming out of college, Bush said.

“We’re in a battle for talent,” Bush said.