This thesis represents an attempt to explore critical issues in the national military literature and bring up findings for further studies by exploring military innovation,smart management of defense R&amp / D, critical and dual-use technologies concepts in detail. The study has two main components. The first part provides a conceptual and theoretical framework to discuss and understand military innovation, critical technology and dual-use technology. A military that fails to innovate when their contemporaries are innovating is destined to face its dire consequences. So the quest for change within military organizations is a rational and hopefully encouraged behavior. In this thesis the modes of innovation are at the center stage. However, the main intention focus is on technological innovation. As certain technologies are at the core of decisive military innovation, the initial step in innovation is normally to procure the new technology. A country that must purchase technology from abroad is arguably less likely to wield it as effectively as the country that is capable of inventing or manufacturing it, as the latter is usually better equipped to exploit and further refine technology. In order to insure the flow of technological innovations, a sound technology investment strategy must be formulated. A strategy built on a foundation of three integrated building blocks (optimal in-house R&amp / D, expanded collaborative efforts, and smart outsourcing) will enable the military to be an effective smart buyer and smart provider. The thesis proceeds with a brief discussion of critical technologies, specifically the ones that are critical for military and national importance, in order to provide guidance for identifying which technologies harbor the greatest payoff potential. Closely related to this discussion is the question of national economic growth based on technological developments in particular the development of technologies with potential for use in either the civilian or military sectors, and promotion of partnerships among actors / military, industry, academia. Such technologies are referred as dual-use technologies. The dual-use relationships among actors are spin-off, spin-on, venture capital model, and military support/pull model. The second part of the thesis develops a kind of empirical case study analysis based on a rotary-wing upgrade project about the importance of upgrade and system integration technology as a core capability. The last chapter concludes the thesis with the discussion of findings.