I keep seeing pictures of very creative German engineering from WWII, like this rocket propelled plane http://i.imgur.com/3NgCGJk.jpg. Why was Nazi Germany coming up with all these outside the box engineering ideas more often than the alllies?
The simple answer is they are willing to throw money on things which looks impressive regardless of their actual military value.
The Germans came up with a lot more "flashy" weapons but were pretty useless in actual combat. The V2 rocket was incredibly innovative but ultimately of very little military value in the war.
The sole exception that comes to mind is the Me-262, but the Americans/British were only a few months behind the Germans, see the British Meteor or the American P-80 Shooting star.
The allies had some significant technological lead over the Germans, the best examples is obviously the Atomic bomb. But here was also the time delayed proximity fuse which were significant improvement over German AA ammunition. There was also of course, the radar, ULTRA decryption, penicillin, Norden Bombsight, better electronic firing systems etc.
So basically the allies did have technological lead, they are just more practical than German designs.
