El Paso’s Role in Aerospace and Defense
As the El Paso community looks to build economic resilience in the wake of COVID-19, the El Paso Chamber (EPC) has been exploring innovative pathways forward for the borderland, in particular focusing on emerging sectors and their ability to drive new growth and employment across the region.
Among the developing industries EPC has been promoting has been the aerospace and defense industry, which is a rapidly growing sector and one El Paso is uniquely primed to attract. According to 2017 data from the Aerospace Industries Association, aerospace and defense across Texas accounted for more than 230,000 jobs, 95+ billion in sales revenue, and $39+ billion in value added. With an average salary of $93,000+, the aerospace and defense industry has the potential to be not just a powerful source of economic development for the region but for high-wage employment as well.
In order to provoke meaningful discussion and establish actionable items around how to cultivate this sector, the El Paso Chamber hosted two events centered on the aerospace and defense industry and El Paso’s role. The first event was a private briefing focused on manufacturing and small business development led by Dr. Ahsan Choudhuri (Department Chair of Mechanical Engineer at UTEP and Director of the Center for Space Exploration Technology Research) and attended by local City and County leadership. The second was a public event streamed via Facebook Live featuring Dr. Parimal Kopardekar, Director of NASA’s Aeronautics Research Institute, which centered on supply chain development.
Below, we highlight key takeaways.
Location, Location, Location
At the moment, manufacturing supply chains in the United States are struggling—the result of several decades of steady erosion. There is currently a heavy reliance on single domestic sources and foreign suppliers, the combination of which leaves supply chains vulnerable. However, there is expected to be a renewed investment in domestic manufacturing infrastructure in the near future, particularly as regards the defense industry. While Juarez cannot directly support these efforts, El Paso’s sister city affords regional knowledge on manufacturing (for example they currently produce printed circuit boards used in defense and aerospace), positioning El Paso as a versatile hub. Moreover, El Paso’s affordable labor rate and lower operating costs and taxes make it a favorable location both for new start-ups and for companies looking to relocate.
UTEP has emerged as one of the top universities for aerospace and defense engineering, providing the well-trained workforce necessary to support and sustain a robust industry. NASA grants for research and new testing facilities in Horizon, TX have all helped propel the status of the UTEP program. Last year alone, Lockheed Martin hired 101 UTEP graduates, a figure unmatched by any other university. Fueling this momentum, this fall Western Tech launched an Aerospace & Defense Technology Associate degree program aimed at growing the middle-skill workforce. It is the first program of its kind in Texas and one targeted at veterans and others transitioning out of the military. Meanwhile, UTEP is preparing to offer a new Aerospace Engineering Bachelor of Science degree program in 2021 to build up the high-skill workforce. By focusing on workforce, El Paso will help drive recognition and encourage interest in the area.
Areas for Growth
While talent production is an essential pillar of support, other areas needed to maintain a burgeoning industry are lagging. Perhaps the most foundational issue is that El Paso lacks a targeted incentive package to attract the aerospace and defense industry in a major way, and while the Fabens center has been hugely beneficial for UTEP’s research, there is a lack of the types of advanced R&D facilities needed to support larger scale production. Given the lack of capital and high-tech investors in El Paso, these kinds of structural shortcomings must be addressed before the industry can begin to make meaningful advances. Key areas for small business and supplier development initiatives must include conventional manufacturing, additive manufacturing, defense electronics components, software automation, R&D technical services, and test and evaluation. Initial efforts should focus on creating design centers and small business clusters.
Regional Collaboration Is Key
Both Dr. Choudhuri and Dr. Kopardekar stressed the importance of regional collaboration. While UTEP has so far led much of the way for aerospace and defense, support from the community is essential. Non-governmental organizations like the El Paso Chamber must come together with government to ensure the industry is well positioned for success.
To facilitate this type of regional collaboration, EPC is in the process of hiring a project manager to assist Dr. Choudhuri in developing a regional taskforce, one that would be charged with bringing together key stakeholders and resources. The manager will also assist with supplier development and ensuring economic structures are in place to support the continued growth of the aerospace and defense industry. Operating on a five-year outlook, initial focus will be on crafting entrepreneurship initiatives and economic incentives, in turn growing the regional capacity for high-tech and innovation-based businesses. As mentioned before, UTEP and Western Tech are already growing the workforces to support these businesses.
Past, Present, Future
While acting in the near-term is important in terms of driving immediate change and success moving forward, having an eye towards the future is equally essential. Huntsville, Alabama, for example, became “Rocket City” because it had a thorough understanding of where industry was headed and prepared accordingly.
In the long-term, artificial intelligence, robotics, urban air mobility, CisLunar economy, hypersonics, and additive manufacturing are all expected to be among the sectors that drive the next industrial revolution globally. Ensuring El Paso both is aware of these anticipated shifts and is prepared to act strategically is essential for the region’s long-term success. For example, as drone delivery becomes more common, there will be a major demand for drone maintenance. Exploring these types of long-term projections is not only exciting, it can can help support strategic resilience and encourage diversification. As many businesses have had to close amid the global pandemic, facilities involved in the production of aerospace and defense are considered essential and as a result have been able to remain open through the crisis.
While it is urgent to address the challenges and needs of the COVID-19 crisis, focusing efforts on new, high-powered sectors can help ensure that El Paso is better able meet these types of catastrophes in future.