I am not saying all development stops, I am not saying all innovation stops, if anything innovation increases and ideas that were previously seen as too radical or risky do get looked at and sometimes get up. What I am saying, and it has been seen over and over again, entering a war has a very different effect to preparing for a war, or watching and learning from someone else's war.
When the choice is between producing extra M1903s or not deploying units because you don't have enough Garands you produce extra M1903s, when the choice is between finalising the design and building the Iowas, which likely will not be ready in time, or ordering additional South Dakotas, you build the existing design. When the choice is between producing P-39s and P-40s, or designing, developing, testing and then producing P-51s you go for the in production type.
When your hull is holed you don't stand there deciding which shipyard to go to or worry about whether you weld a patch over the hole or pull the ship out of the water to remove and replace the damaged plating, you hammer wooden chock in the hole and seal it as best you can until the ship is safe, then you worry about the wheres and hows of fixing it.
Its a very simple concept, one that has been demonstrated over and over again, when wars start you use what you have and only produce what you can usefully get to the front in your time of need. As wars drag on and lessons are learned existing systems are evolved and new ones are introduced, but they are very different to those that would have been developed had you not been at war.
There is massive investment in production, there is massive investment in R&D, but the priorities are set by the strategic situation. Battleships and carriers are great and needed but when the enemy.s submarines are devastating your merchant fleet you need to invest escorts. Bombers are great but when you are being bombed you need fighters. Amphibious assault vehicles are great but when you are fighting in the desert you need land vehicles. R&D is necessary but when an ally gives you tech and design data for something better than you have (but maybe not as good as what you are developing) you produce that.
Because the US had an extra couple of years to prepare and was physically removed from the industrial disruption of being bombed and starved of raw materials, manpower etc, they were able to design and develop many (or even most) of the war winning systems used from 43 onwards. Had they joined tha war earlier they would have been in a situation more similar to the UK than not, and the effects would have been similar. With more time for R&D and testing the British tanks would have been much better, bug ironed out of the better designs, the bad designs (ordered of the drawing board) identified and cancelled before production. With more time and less pressure the Cromwell would have been more like the Comet and the Churchill would have been superseded by something like the Centurion. The Crusader would have had thicker armour and a 6pdr from the start, as well as being more reliable. The Lions would have been built, Hood and Repulse would have been rebuilt, there would have been more large cruisers, the L and M type destroyers would have been perfected and standardised instead. Westland Whirlwind (and the Peregrine) would have been fully sorted and in full production, along with one of the twin Merlin heavy fighters being developed. I could go on.