In February, Sen. Mitt Romney joined my organization — The Utah Aerospace and Defense Association (UADA) — for a wide-ranging event that included discussion of the ways the aerospace, defense and cyber industry segments of Utah’s economy can help secure America’s interests. Like Sen. Romney, we believe that, in an increasingly volatile world, our nation will need to re-engage on critical national security and defense issues to secure our future — and that Utah’s companies are playing a leading role in that effort.
Why does this industry cluster matter?
The aerospace and defense industry has a significant economic footprint in Utah. The state is home to several global companies, including players like Boeing, Northrop Grumman, Lockheed Martin, Raytheon, among others. According to a report by the Utah Governor’s Office of Economic Opportunity, the aerospace and defense industry is one of the largest and fastest-growing sectors of Utah’s economy. In 2019, the industry employed more than 35,000 workers in the state, with an average annual wage of $81,000, which is significantly higher than the statewide average.
This industry also plays a critical role in our national security efforts. The state is home to several military installations, including Hill Air Force Base, which is the largest single-site employer in the state, and the Utah Test and Training Range, which is the Department of Defense’s largest overland test range.
Defense companies face challenges in working with federal government
These challenges can range from navigating complex regulations and requirements to dealing with budget constraints and shifting priorities. Here are some of the current challenges that defense companies face:
Compliance with regulations and standards: Defense companies must comply with a wide range of regulations and standards, such as ITAR (International Traffic in Arms Regulations) and DFARS (Defense Federal Acquisition Regulation Supplement). These regulations can be complex and time-consuming to navigate, and noncompliance can result in severe penalties.
Budget constraints: The federal government’s budget for defense spending can be unpredictable and subject to political pressures. Defense companies must be able to adapt to changes in spending levels and shift their focus accordingly.
Security clearances: Many defense contracts require security clearances, which can be difficult and time-consuming to obtain. This can be particularly challenging for new or smaller companies that may not have the resources to invest in the clearance process.
Meanwhile in China…
China’s military technology is growing rapidly due to a combination of factors. Some of the key drivers of China’s military technology growth include:
Increased investment: China has significantly increased its investment in military technology in recent years. The country’s defense budget has grown by an average of 7.5% annually over the past decade, and it is now the second-largest military spender in the world, behind only the United States.
Rapid technological development: China’s technology industry is growing rapidly, with the country becoming a global leader in areas such as 5G wireless technology and artificial intelligence. This has provided the Chinese military with access to cutting-edge technologies that it can leverage for military purposes.
Industrial espionage: China has been accused of engaging in industrial espionage, or the theft of intellectual property from foreign companies, in order to gain access to advanced technologies. This has allowed China to rapidly acquire technologies that it may not have been able to develop on its own.
One important solution
The acquisition processes the federal government follows to acquire and fund new innovative technology is antiquated. Like, really antiquated. This process can take many, many years — sometimes even more than a decade — to complete for companies hoping for funds and purchase orders. Additionally, our slow federal permitting process also stymies investment, economic growth, and job creation, which further diminish our strength as a nation and our ability to defend our shores, infrastructure, and citizens.
The Department of Defense and the Pentagon need a permitting process that is streamlined and efficient, one that allows for the timely support of small businesses.
Our senators and members of Congress have been champions of federal permitting reform in the past. I urge them to continue with these efforts by working with his colleagues to get bipartisan permitting reform passed during this Congress.
Aaron Starks
Aaron Starks serves as CEO of the Utah Aerospace and Defense Association (UADA).