New Economy Initiative should create jobs, boost aerospace industry

By: Jessica Rousset & Chase Kassel

Diversifying Arizona’s economy away from the five C’s – copper, cotton, citrus, cattle, and climate – has made this state one of the largest manufacturing hubs in the nation with a deeply rooted aerospace industry. Our state currently generates over $11 billion annually in economic activity from aerospace and defense. To address the growing need for a continually diversified and modern workforce, the New Economy Initiative was signed into law, providing millions of dollars in state funding through the Arizona Board of Regents to invest in Arizona’s economic future.

This initiative aims to create 40,000 new jobs by 2041, increase economic output to $6.9 billion by 2023, and double the state’s investment in return, much of which can and should be generated within the space ecosystem. Arizona’s manufacturing and aerospace industry already gives our state a leg-up on achieving these ambitious goals.

According to a 2019 Deloitte study on Arizona’s competitiveness, Arizona is the only state with the capabilities to provide the five critical segments of the space economy – aerospace, launch services, manufacturing, metals and mining and R&D. That same report projects the global space economy will reach $1 trillion in economic activity sometime between 2030 and 2045. Through investment in the New Economy Initiative, Arizona is well positioned to meaningfully participate in this global economic activity by investing in both space and space-adjacent industries.

For fiscal year 2023, the New Economy Initiative will direct nearly $150 million in funding to the state’s public universities, Arizona State University, Northern Arizona University, and the University of Arizona, to accelerate the development of a skilled workforce and spur resilient and sustainable economic growth. The University of Arizona will allocate a significant portion of those funds to the space and defense sector. Arizona State University is putting $34 million toward academic, research, and training programs in five sectors that are critical to the space industry: energy and materials, human performance, extreme environments, advanced manufacturing, and future communications technologies.

With catalytic programs like the New Economy Initiative producing skilled workers, funding innovation, and access to infrastructures like ASU’s Innovation Zones that co-locate companies with talent and research labs, Arizona will increasingly see space companies moving to the region, just as Virgin Galactic and Blue Origin recently have.

As the space sector becomes more prominent in the Arizona business ecosystem, it will be important to understand how it intersects with other industry segments and how these other segments can benefit from a growing presence of space companies. This growth will have a significant upstream and downstream impact on the supply chain and strengthen our state’s overall economic growth. For example, Taiwan Semiconductor and Chang Chun Arizona are expanding operations in our state around the same time we are seeing new investments made by large space companies like Blue Origin and Virgin Galactic. With new upstream solutions come new downstream solutions, and vice versa.

With our economic development and business groups, including the Greater Phoenix Chamber strengthening Arizona’s space ecosystem and value chain, with our universities driving innovation, research, and workforce development, Arizona is poised to be a global strategic hub for the space industry.

Chase Kassel is portfolio manager for ASU’s Interplanetary Initiative and Jessica Rousset is deputy director of ASU’s Interplanetary Initiative.
This piece was originally published in the Arizona Capitol Times.

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