By Kari Williams
From the November/December 2023 Issue
The U.S. civilian and military aerospace and defense industry is confronting workforce shortages stemming from the COVID-19 pandemic—up to 3.5 million vacancies are expected by 2026, according to a recent PwC report.
Still, the report, “Global Aerospace and Defense: Annual Industry Performance and Outlook: 2023 edition,” forecasts overall growth worldwide. And communities with a military presence—or that create a strategy to attract defense-related companies—could be poised for success, according to various economic development and defense industry officials.
Barry Albrecht, President and CEO of Strategic Location Services, said he has seen “more and more” requests for proposals in the technology field looking for locations with three primary requirements—agricultural history in the region, a major university or large college, and a defense or military installation within a 30- to 40-mile radius.
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“What those three requirements [are] telling me is they’re looking for a workforce with the ethics that an agriculture and military provides,” Albrecht said, “Because agriculture and military, they don’t put their pencil down at 4:30. They’re there for the mission.”
Plus, military installations and defense spending support local economies through government purchasing and contracting for goods and services on base; capital investments into base infrastructure; and hazard mitigation on or around bases, according to the NADO Research Foundation report, “Economic Development Districts and Military Installations: Partnerships for Future Planning and Community Cooperation.”
Benefits Of An Established Military Presence
Jared Chalk, Chief Business Development Officer for Virginia’s Hampton Roads Alliance, said the state has the largest military concentration “anywhere on the planet.” With 15 military bases throughout the region, economic development benefits start with the Port of Virginia, he said.
Virginia is the No. 1 state in defense spending at $62.7 billion, followed by Texas ($58 billion), California ($56.2 billion), and Florida ($30.2 billion), according to the U.S. Department of Defense’s Office of Local Defense Community Cooperation (OLDCC) report “Defense Spending By State: Fiscal Year 2022.”
Chalk said the region is “well-positioned” in the war for talent with roughly 14,000 service members transitioning out of the military annually in Hampton Roads and about half remaining in the area.
Two veteran employment centers also are connected to transition programs at area military bases, according to Shawn Avery, President and CEO of the Hampton Roads Workforce Council.
“When they establish those training capabilities with universities and colleges, the companies will come. Workforce is the incentive.”
— Barry Albrecht, President and CEO,
Strategic Location Services
“We want to retain our transitioning service members, their families, and any veterans that are in the region,” he said. “Retain them, understand what skills that they have, and then really make those matches to the employers that are currently in the market, but also expanding businesses, new businesses that are coming town.”
Rick Dwyer, Executive Director of the Hampton Roads Military and Federal Facilities Alliance, said good, high-paying jobs are an incentive for transitioning service members to remain in a particular area.
“That is, I think, an attractive aspect for any employer, whether defense related or other industries, to say they have such a readily available pool of veterans every year,” Dwyer said. “They’re well disciplined. They’re used to getting up and coming to work on time. They’ve got security clearances if they are in those defense industries, which is a bonus. Generally, they can pass a drug test and all those kind of things that are very attractive, obviously, to employers that are looking for a well-educated, hardworking labor pool.”
Albrecht said there’s a labor shortage in cybersecurity, but communities can expand their capabilities, education, and training—so long as they understand the needs of the industry.
“When they establish those training capabilities with universities and colleges, the companies will come,” Albrecht said. “Workforce is the incentive.”
Developments & Growth
Jeff Troan, Managing Director of Vista Site Selection, said the defense community is “always looking for available infrastructure.” There’s even a Defense Community Infrastructure Pilot Program intended to “address deficiencies in community infrastructure, supportive of a military installation, in order to enhance military value, cadet training at covered education institutions, installation resilience, and military family quality of life,” according to OLDCC.
A few key areas in Texas have done a “great job” of attracting the defense industry, Albrecht said, noting San Antonio for cybersecurity and Texas A&M’s RELLIS campus.
“Communities have got to show the long-range plan for developing the workforce,” Albrecht said. “And that’s where military communities have that advantage.”
Lockheed Martin, a leading aerospace and global security company, has had a presence in Arkansas since 1978 and operates its Precision Fires Center of Excellence out of Camden, AR. The aerospace and defense industries play a significant role in the state’s economy, according to an Arkansas Economic Development Commission case study, employing about 10,000 citizens across 180 companies.
Having seen “unprecedented growth” with its Missiles and Fire Control sector, Lockheed Martin in 2019 selected the Arkansas site for a $142 million capital investment project that employed 1,000 Arkansans, according to the study.
“Lockheed Martin’s ongoing partnership with Southern Arkansas University Tech to maintain a skilled workforce, in addition to competitive incentives from the state of Arkansas, made Camden the natural choice for the investment project,” the study stated.
The top defense contractor, Lockheed Martin spent $44.5 billion in FY 22, with Raytheon Technologies next in line at $25.4 billion, according to the OLDCC’s “Defense Spending By State: Fiscal Year 2022” report.
Raytheon—the world’s largest aerospace and defense company—made its third expansion in Mississippi since 2013 with the September groundbreaking at its Consolidated Manufacturing Center.
The $50 million investment is expected to create 100 jobs over the next five years, supporting the “production, development, and integration of Next Generation Jammer Mid-Band pods for the U.S. Navy, Australian government, and airborne radar programs,” according to the Mississippi Development Authority (MDA).
Meanwhile, northwest Florida, home to six military bases, has nearly 500 companies in the aerospace and defense industries, ranging from maintenance and manufacturing to research institutions. In July, Leonardo Helicopters broke ground on a 113,000-square-foot customer support center at Whiting Aviation Park in Milton, FL.
Infrastructure & Investment
The OLDCC also offers a Defense Manufacturing Community Support Program, which aids long-term community investments “that strengthen national security innovation and expand the capabilities of the defense manufacturing industrial ecosystem.”
In September, six grants, totaling roughly $30 million, were issued through the program for projects ranging from an energy storage and battery manufacturing project to a workforce pipeline project focused on engineers and tradespeople skilled in digital advanced manufacturing technologies.
Most recently, OLDCC awarded Hawai’i’s Department of Business Economic Development and Tourism (DBEDT) a $3.2 million grant to establish a military and community affairs office.
Every branch of the U.S. military has a presence in Honolulu, HI, and the state houses “the largest geographic combatant commander,” U.S. IndoPacific Command.
“Hawai’i’s defense economy provides more than 20,000 civilian jobs and 31,000 contractor jobs to our community,” DBEDT Director James Kukane Tokioka said in a news release. “Military related spending makes the defense sector the second-largest of our state’s economy and accounts for 8.3% of Hawai’i’s GDP.”
In addition to OLDCC, the Association of Defense Communities has a database of more than 100 resources for defense communities and installations. It also annually recognizes Great American Defense Communities (GADC), taking into consideration community building efforts, support, and collaboration with nearby installations.
Greater Omaha (Nebraska) was among the 2023 recipients. Randy Norwood, AVP of Military Aff airs & Strategic Partnership for Greater Omaha, said personnel from Off utt Air Force Base, located in Sarpy County, NE, nominated the community—a first for the awards.
“I think that is a really good example of not only how much the community appreciates the service members, but how much the service members appreciate the community,” said Norwood, himself a 24-year Air Force veteran.
The GADC designation shows that Omaha is a “good place to be” for military families and spouses, which Norwood said then leads to transitioning service members staying in the area.
“I think it really highlights not just that we are military friendly, but that we’re military supportive,” Norwood said.
As it relates to economic development, Norwood said the GADC designation helps.
“If the DOD is looking at basing a new mission, with that comes multiple millions, if not billions, of dollars to the area,” Norwood said.
Albrecht said that many times economic development organizations are created outside of military installations, but the people involved don’t know the “most efficient way” to leverage resources an installation can provide.
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“It’s always my recommendation to EDOs to ensure they have the right people working and advising the EDO that has previously worn the uniform or previously worked in the defense industry,” he said.
Fred Meurer, Chair of the Monterey Bay (CA) Defense Alliance, is one of those people. Meurer, an Army veteran and ADC Past President, has been MBDA’s chair since he retired from a 23-year career as Monterey’s city manager. His work with the city formed most of the relationships he has at MBDA.
In 1993, the Army tried to close Presidio of Monterey, prompting Meurer to make an “unsolicited proposal” for the city oversee day-to-day management rather than shutter the base.
“That was really the birth of the idea of what is now called intergovernmental support agreements,” Meurer said. “We initially had the authority to demonstrate this capability in Monterey.”
For more information or resources to support or develop a defense community, visit defensecommunities.org.