This is a description and analysis of the diffusion of publicly-funded (US government performed and sponsored) aeronautical research and development based on studies conducted under the NASA/DoD Aerospace Knowledge Diffusion Research Project. The first section describes how our technology and information policies interact to influence the US aerospace industry. The second section presents the findings of the authors' empirical research. The final section offers comparisons with other national systems, analyzes the STI models used by selected federal agencies and presents a revised technology policy and STI model.