Return on Investment on Naval Education & Research

The United States Navy and other military services send a large number of their officers to various military universities to obtain graduate degrees or perform academic research. These graduate education programs provide the officers with technical skills and nontechnical competencies highly valued in their respective billets. The cost of sending a Navy officer to a 1.5- to 2-year program for a master's degree may be upwards of $250,000 plus the opportunity cost of his or her lost services. In addition, a doctoral program may cost upwards of $500,000 per officer, plus their respective soft opportunity costs for being away for 3-4 years. The U.S. military's human resource environment is unique in that it is a closed internal hierarchical structure. For instance, an officer's pay is based on his or her rank and years of service, regardless of educational background. It can be argued that higher education may result in higher efficiency and productivity, thereby increasing the speed of promotions, but these are fairly difficult to quantify. Further, we see that 2 years after graduation, the retention rates are relatively high, ranging from 99.31% to 95.78% on average. This high rate of retention the first few years is to be expected as officers sent to graduate programs typically are required to "pay back" their education costs with guaranteed service for several years. The question is whether the benefits of such education and research are indeed greater than the cost incurred by the Navy. Another consideration is that naval research and education are not separate tasks but tend to coexist alongside the innovation engines of the country. The current research looks at various novel ways to value the monetary return on investment (ROI) of military education and research. The proposed methodologies apply theoretical constructs by using a systems approach to utilization; convolution methods to determine the frequency and quantity of use; and an analytical framework, empir