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Aerospace, Defense & Security Industry in Arizona: Options for Advancing the Aerospace, Defense and Security Industry

September 24, 2011 Prepared by: L. William Seidman Research Institute W.P. Carey School of Business Arizona State University Tel: (480) 965-5362 Fax: (480) 965-5458 www.seidmaninstitute.com Prepared for: Science Foundation Arizona This project was supported by the Governor’s Office of Economic Recovery and Science Foundation Arizona.

Aerospace, Defense & Security Industry in Arizona: Options for Advancing the Aerospace, Defense and Security Industry

Seidman Research Institute | i

1. Executive Summary

Arizona’s Aerospace, Defense and Security (AD&S) industry faces several challenges to its continued

growth thanks to an increasingly competitive economic landscape and the changing technological needs

of the military.

The current report commissioned by Science Foundation Arizona (SFAz) and supported by the

Governor’s Office of Economic Recovery:

• Identifies a series of common themes and gaps in the AD&S industry;

• Analyzes best practices in competitor states that support their industry;

• Examines the issues surrounding collaboration among firms;

• Recommends activities for an organization to best support the AD&S industry in

Arizona.

In-depth interviews were conducted with five industry and government leaders to identify the major

themes representing concerns and gaps in the industry. The following six themes were identified:

• There is currently no clear single point of contact for the AD&S industry in the State.

• The needs of the industry are not being adequately addressed by the State’s federal

delegation.

• Existing organizations in the State do not represent the specific needs of the AD&S

industry.

• Arizona has a reliable supply of engineers and some types of skilled workers, but firms

have difficulties convincing senior hires to relocate due to perceived deficiencies in the

State.

• Firms in the State are concerned with lowering the cost of maintaining a reliable supply

chain.

Seidman Research Institute | Executive Summary ii

• AD&S firms in the State generally favor the establishment of an organization such as a

trade association in support of the industry and believed it would have a significant

positive effect.

A comparison with three competitor states (Alabama, Florida and Virginia) is also made to provide

further insight into best practice, highlighting the importance of organizations serving as a centralized

focal point for their industry. The following best practices were identified:

a) Balancing the needs of the entire membership with those of sub-groups within the organization.

b) Assisting federal delegations through education and lobbying.

c) Connecting member firms with each other.

d) Educating the public and their membership about pertinent industry.

e) Providing a single point of contact facilitating engagement with outside parties who want to do

business in the state.

f) Marketing the state as a superior place to do business.

g) Setting up an organization as an industry- led, focused and funded entity.

h) Educating small businesses and suppliers with the knowledge necessary for doing business with

the federal government.

i) Providing a mechanism for effective and clear communication between research, industry,

government and military entities.

j) Creating an organization that serves as a focal point for the industry.

Seidman Research Institute | Executive Summary iii

An in-depth literature review was conducted highlighting the issues surrounding collaboration among

firms. The research revealed that companies can maximize their collaborative efforts by:

• Facilitating communication among its members;

• Creating an open-membership model to create a large, efficient alliance; and

• Developing disclosure rules for member-provided data that foster incentives for individual firms

to share their business information with the association.

Collating the gaps in the industry with best practices from competitor states that fill those gaps, this

report draws the following conclusions:

1. A single point of contact for AD&S is necessary in Arizona to allow out-of-state firms and entities to

easily engage and do business with firms in the industry.

2. The AD&S industry would benefit greatly from having an organization dedicated to addressing its

concerns with government representatives at the state and federal level.

3. Existing organizations in the State do not focus specifically on the needs of the AD&S industry, or

they deal mostly with policy matters and are not structured to provide comprehensive services to

industry members such as lobbying activities.

4. An organization in Arizona is needed to connect local suppliers and manufacturers.

5. The establishment of an AD&S trade association in Arizona would effectively meet the industry

needs outlined in this report.

6. The success of an AD&S trade association depends in part on its ability to:

• Facilitate communication;

• Create an open-membership model; and

• Develop disclosure rules that foster incentives for individual firms to share their business

information with the association.

Table of Contents

1. Executive Summary .......................................................................................................................... i

2. Introduction .................................................................................................................................... 4

3. Interviews ........................................................................................................................................ 5

3.1. Summary of Interview Responses ............................................................................................. 6

3.2. Single Point of Contact ........................................................................................................... 10

3.3. Addressing concerns at the State and Federal level: ............................................................... 11

3.4. Other organizations in the State: ............................................................................................ 11

3.5. Workforce: ............................................................................................................................. 14

3.5.1. Hiring Issues ................................................................................................................... 14

3.5.2. Workforce Supply ........................................................................................................... 16

3.6. Connecting with suppliers: ..................................................................................................... 19

3.7. Activities in Support of AD&S Industry: ................................................................................... 20

4. Competitor Strategies .................................................................................................................... 21

4.1.1. Alabama ............................................................................................................................. 21

4.1.2. Virginia ............................................................................................................................... 22

4.1.3. Florida ................................................................................................................................ 24

4.1.4. Best Practices ..................................................................................................................... 27

5. Literature Review .......................................................................................................................... 30

5.1. Communication ...................................................................................................................... 31

5.2. Structure ................................................................................................................................ 32

5.3. Sharing Information ............................................................................................................... 33

6. Conclusion & Recommendations ................................................................................................... 34

Bibliography .......................................................................................................................................... 35

Authors ................................................................................................................................................. 37

Seidman Research Institute | Executive Summary 3

List of Tables

Table 1: Industry Stakeholder Interview Exploratory Framework of Questions ....................... 5 Table 2: Organizations Supporting Industry in Arizona .............................................................. 12 Table 3: Arizona’s Four Lead Research Entities ............................................................................ 16 Table 4: Arizona’s Schools & Technical Colleges ........................................................................... 17 Table 5: Best Practices vs. Industry Gaps Matrix ........................................................................... 28 Table 6: Literature Review Publications ........................................................................................ 30

Table of Figures

Figure 1: Overall NAEP Scores for Low-Income Children (2009) ................................................ 15 Figure 2: Change in NAEP Scores for Low-Income Children ......................................................... 15 Figure 3: Specificity of Needs vs. Size of Organization .................................................................. 24

Seidman Research Institute | Introduction 4

2. Introduction

The Aerospace, Defense & Security (AD&S) industry is an integral part of Arizona’s economy. It

contributes $8.8 Billion in gross state product to the local economy and is responsible for creating over

93,800 jobs in the State (Seidman Research Institute, 2010a). With large U.S. Department of Defense

budget cuts looming, many in Washington, D.C., including Arizona Senator, John Kyl, have expressed

grave concerns about the future of the United States’ national defense (Clark, 2011). As the economic

landscape continues to change and the requirements of national defense and homeland security evolve,

how can Arizona best position itself to succeed in this industry?

The purpose of this report, commissioned by Science Foundation Arizona, is to identify the major issues

and currently unmet needs of the AD&S industry, and recommend an effective strategy for meeting

those needs in the state.

The objectives of this report are to:

• highlight key issues and needs currently not addressed by Arizona’s AD&S industry;

• identify and examine best practice pursued by competitor states; and

• recommend a strategic roadmap to effectively address the challenges and issues faced by the

AD&S industry in Arizona.

To meet these objectives, Section 3 presents a series of common themes or needs of relevance to the

AD&S industry in Arizona, drawn from a series of interviews with industry leaders. An assessment of

best practice in competitor states is presented in Section 4. Section 5 addresses the issue of

collaboration via an in-depth literature review. The final analysis, conclusions and recommendations are

then presented in Section 6.

Seidman Research Institute | Interviews 5

3. Interviews

To address the question of how best to support the AD&S industry in Arizona, it is useful to examine the

areas in which the industry’s needs are not being met. To that end, five semi-structured interviews

were held with industry and government leaders, recommended by Science Foundation Arizona. The

leaders were:

• Eileen Klein – Chief of Staff – Office of the Governor, State of Arizona

• Bob Lepore – Vice President of Engineering – Raytheon Missile Systems

• Colleen Niccum – Director, Community and Government Relations – Raytheon Missile Systems

• Mark Ogren – Vice President, Business Development – Orbital Sciences Corp.

• R. Glenn Williamson – Chairman of the Board – KinetX, Inc.

Additionally, non-structured discussions were held with stakeholders at various companies aligned with

AD&S. The comments from these discussions closely mirror those from the structured interviews. Prior

to the interviews, a list of nine exploratory themes was prepared. These themes, illustrated in the table

below, served as a guide while allowing the interviewer to offer follow up questions to specific

comments that presented themselves during the interviews. The themes were:

Table 1: Industry Stakeholder Interview Exploratory Framework of Questions 1. If an out-of-state firm wanted to do business relating to AD&S in Arizona but did not know the individual firms

in the state, who would serve as their first point of contact? 2. Are the needs of the Arizona Aerospace, Defense & Security industry currently being represented at the state

and federal level? How important is this type of advocacy to your organization? 3. Is there an organization in Arizona that facilitates networking activities for members of the AD&S industry?

Do you feel there is a need for one? 4. Do any organizations in the State currently have workforce development programs for the AD&S industry?

How important are these efforts to your organization? 5. How do you currently find suppliers in the State? Would a central repository or database of Arizona suppliers

be useful to your organization? 6. Would it be beneficial for your firm to belong to an organization that included some of your competitors?

What circumstances would improve the effectiveness of such an organization? 7. Has your firm had any experience with business associations, economic development agencies or similar

organizations in other states? Were they positive or negative? Do any of them stand out as exemplary models of organizations that effectively support their industry?

8. If an industry association or similar organization existed in Arizona that met your needs, would you be willing to pay to become a member? What kind of dues structure would you be most comfortable with?

9. If an organization designed to support the Aerospace, Defense and Security industry existed in Arizona, what functions would you expect it to perform? How would these functions benefit your firm?


3.1. Summary of Interview Responses

A summary of the various responses to these themes is listed below:

Q1 If an out-of-state firm wanted to do business relating to AD&S in Arizona but did not know the

individual firms in the state, who would serve as their first point of contact?

• Currently there is no single point of contact in the State for out-of-state firms looking to do

business with AD&S companies in Arizona.

• For entities seeking information on policy issues, a Chamber of Commerce is a good start, but

for inquiries directly relating to Aerospace, Defense & Security, people would eventually make

their way to the Arizona Aerospace & Defense Commission.

• Many organizations representing various industries already exist in the state including1:

i) Arizona Technology Council (AZ Tech Council)

ii) Tucson Regional Economic Opportunities (TREO)

iii) Arizona Aerospace and Defense Commission (AADC)

iv) Greater Phoenix Economic Council (GPEC)

v) Arizona Chamber of Commerce and Industry

vi) National Defense Industrial Association – Arizona Chapter (NDIA)

vii) Maricopa Association of Governments (MAG)

viii) National Association of Manufacturers (NAM)

• Each of these organizations operates independently, and there is currently little cooperation

between them. Additionally, some degree of competition between these organizations has

prevented them from working together in the past.

1 Detailed descriptions of these organizations’ activities are outlined in Table 2

Table 2 on page 12.


• Except for the Arizona Aerospace and Defense Commission (AADC), these organizations are not

specifically focused on the AD&S industry and its needs. While the AADC supports the industry

in matters of policy, a different type of organization is needed in the State that can engage in

activities outside the realm of government entities.

• Most manufacturers in Arizona have existing relationships with out-of-state firms.

• Most major manufacturers in Arizona are regional business units that belong to a larger

enterprise with a headquarters out-of-state. A lot of business is done through the home offices

in other states.

Q2 Are the needs of the Arizona Aerospace, Defense & Security industry currently being represented

at the state and federal level? How important is this type of advocacy to your organization?

• There is a need for a unified voice for the Arizona AD&S industry in Washington, D.C. Currently,

there is no entity in the State specifically advocating for the AD&S industry.

• Advocacy at the state and federal level is very important to the AD&S industry. General issues

like tax credits are already being addressed through the efforts of existing organizations.

• The interests of private AD&S firms should be advanced by the federal delegation as vigorously

as those of military bases and installations in the state.

Q3 Is there an organization in Arizona that facilitates networking activities for members of the AD&S

industry? Do you feel there is a need for one?

• Most of the major players in the industry have developed relationships by interacting through

existing entities such as university boards and the Arizona Technology Council, but networking

activities are not the main concern for AD&S firms in Arizona.

• Small businesses approach the main manufacturers directly with proposals.

Q4 Do any organizations in the state currently have workforce development programs for the AD&S

industry? How important are these efforts to your organization?


• Several organizations in the State have programs aimed at workforce development in general,

but more efforts are needed to meet the workforce needs specific to the AD&S industry.

• While AD&S firms have been able to find and hire engineers from the local and state colleges

and universities, a qualified technical workforce with no university degree has been difficult to

obtain.

• Enticing senior-level hires to relocate to Arizona has also presented a challenge for firms in the

AD&S industry. Some of the reasons cited include:

i) Arizona K-12 education ranked 45th in the nation (Ladner, LeFevre, & Lips, 2010);

ii) the tarnished reputation of the State due to controversial issues such as gun laws and immigration;

iii) the reduced mobility of potential employees who are unable to sell their current homes due to the recession and current state of the housing market; and

iv) a lack of minority professional communities in the state.

Q5 How do you currently find suppliers in the state? Would a central repository or database of

Arizona suppliers be useful to your organization?

• Currently, suppliers in the State do not have a clearly defined channel for reaching AD&S

manufacturers other than direct contact with individual manufacturers.

• Major manufacturers have national and international supply chains, and suppliers are found by

researching firms who can produce the desired products at the highest quality and for the

lowest price.

• It is expensive to maintain a large number of suppliers due to the quality assurance processes

and certifications often required by U.S. Department of Defense contracts. The ability to find

local, high-quality suppliers would benefit manufacturers in the State by helping them lower the

costs associated with maintaining their supply-chains.


Q6 Would it be beneficial for your firm to belong to an organization that included some of your

competitors? What circumstances would improve the effectiveness of such an organization?

• Yes. AD&S firms often compete for contracts and collaborate on issues that benefit the entire

industry.

• An example of this type of collaboration is exemplified by the membership of several Arizona

AD&S firms in national and local trade associations such as: the Aerospace Industries Association

and the Arizona Technology Council.

Q7 Has your firm had any experience with business associations, economic development agencies or

similar organizations in other states? Were they positive or negative? Do any of them stand out

as exemplary models of organizations that effectively support their industry?

• In general, the interviewees responded favorably to the value of a trade association for the

AD&S industry.

• Although many of firms interviewed belong to trade associations in other states, it is important

to keep in mind that their experiences in those states may be very different due to their unique

situation. In Arizona, for example, businesses like Raytheon Missile Systems have a large

presence, contributing almost 12,000 jobs (Seidman Research Institute, 2010a). This affords the

company a larger voice in Arizona than in other states where either their presence may be

smaller or the market is more crowded. This makes the case for belonging to a trade association

very different, depending on the particular firm’s situation in that state.

Q8 If an industry association or similar organization existed in Arizona that met your needs, would

you be willing to pay to become a member? What kind of dues structure would you be most

comfortable with?

• All interviewees were open to the idea of some sort of association for the AD&S industry in the

state, but the benefits of belonging to such an association would have to be demonstrated to

justify any membership dues.

• Paying dues to become a member of an organization can be a complicated process for a firm.

This is especially true if the organization engages in any political activities such as lobbying as


strict rules must be followed to ensure that federal contract funds are not spent on political

activities.

Q9 If an organization designed to support the Aerospace, Defense and Security industry existed in

Arizona, what functions would you expect it to perform? How would these functions benefit your

firm?

• Suggestions from the interviewees for the role an organization designed to support the AD&S

industry include:

i) gaining federal support for contracts;

ii) helping to attract high-tech firms to Arizona to support the industry;

iii) supporting research;

iv) supporting education through technical training, strengthening relationships between

schools and industry, and supporting STEM programs in public schools;

v) advancing Arizona as a hub for Unmanned Aircraft Systems (UAS) research and testing;

vi) educating and informing the State Legislature about the benefits of the industry for the

state;

vii) partnering with other organizations and agencies in the state to create synergies;

viii) assisting small businesses to obtain the necessary certifications to participate in military

contracts;

ix) facilitating joint operations between industry and the military in the state; and

x) promoting Arizona firms at national and international trade shows.

These in-depth interviews provided a current perspective on the issues facing the AD&S industry in the

State, and several discernable themes surfaced which are outlined in the following sub-sections:

3.2. Single Point of Contact

Currently, there is no clear single point of contact for the AD&S industry in Arizona. Out-of-state firms

who want to do business with Arizona companies usually pursue an independent research process and


make direct contact with the local companies through existing channels. This does not necessarily imply

a need for more channels of access to AD&S companies doing business in Arizona. It simply speaks to

the lack of a unified identity for the industry in the state.

Arizona firms have identified potential benefit from a representative organization that could promote

individual, locally-based companies at high-profile venues such as national and international trade

shows.

3.3. Addressing concerns at the State and Federal level:

One of the most common concerns voiced during the interviews was the Arizona federal delegation’s

lack of support for the AD&S industry. The AD&S industry needs an organization that could serve to

elevate its profile and educate government representatives about the benefits it brings to the state.

At the state level, issues such as tax incentives are already being addressed by various economic

development agencies and existing trade associations. The AD&S industry shares these types of

concerns with many other businesses in the state, and is currently reliant upon independent

organizations such as the Arizona Aerospace & Defense Commission, the Arizona Technology Council

and similar government or public-private organizations taking up the mantle on their behalf.

3.4. Other organizations in the State:

There are several organizations in Arizona that currently perform activities beneficial to the AD&S

industry. Some of these entities are listed in Table 2:


Table 2: Organizations Supporting Industry in Arizona Organization Name Description of Organization and Activities Arizona Technology Council (AZ Tech Council)

• Established in 2002 after the Arizona High Tech Industry Cluster (HTIC) merged with the Arizona Software & Industry Association (AZSoft.net).

• Over 600 members including technology companies, service providers, government agencies, non-profit organizations and academic institutions.

• Engages in public policy initiatives that promote the technology industry’s interests to elected officials.

• Provides educational forums, networking opportunities and company-showcase events that connect and educate the technology community

Tucson Regional Economic Opportunities (TREO)

• Public-private economic development agency founded in 2005 with public funds. Currently receives 54% of its funding from private businesses.

• Focused on economic development of the Tucson area and its surrounding community partners.

• Provides regulatory and training assistance, new business leads, competitor analysis, technology advances and marketing assistance to local employers.

• Works to attract new businesses through advertising and marketing in the following business clusters: 1) Aerospace & Defense, 2) Biotechnology, 3) Solar, and 4) Transportation & Logistics.

Arizona Aerospace and Defense Commission (AADC)

• A state-sanctioned organization established under the Arizona Commerce Authority.

• Tasked with providing technical support, developing goals and objectives, recommending legislation and providing direction regarding Arizona's aerospace and defense-related commerce.

• As a policy-focused entity, it annually submits a strategic plan to the Governor, the President of the Senate, the Speaker of the House of Representatives, the Secretary of State and the Director of the Arizona State Library, Archives and Public Records.

• This plan includes four strategies: 1. Improve Arizona’s Business Environment 2. Create a Robust Pipeline of Business and

Entrepreneurial Opportunities to Fuel Growth 3. Build Arizona’s Research Competitiveness 4. Attract, Educate, Retain and Retrain Arizona’s Skilled

Workforce Greater Phoenix Economic Council (GPEC)

• Established in 1989, GPEC is a public-private economic development partnership dedicated to the task of attracting new businesses to Greater Phoenix.

• Recruits potential businesses through various forms of advertising, and then works with various public and private partners to encourage relocation to the Greater Phoenix area.

• Focus differs from a chamber of commerce as they seek to


Organization Name Description of Organization and Activities recruit new businesses, rather than develop and expand ones already located in Greater Phoenix.

Arizona Chamber of Commerce and Industry

• Established in 1974, the Arizona Chamber of Commerce and Industry functions as a statewide business advocate at the Arizona Capitol and with the Arizona congressional delegation.

• Provides local businesses access to policymakers through programs, events and committee meetings.

National Defense Industrial Association – Arizona Chapter (NDIA)

• Established in March 1997, this is a non-partisan, non-profit, educational association with national offices in Arlington, Virginia.

• Provides a professional forum to drive the interchange of ideas among the government, industry, and academia in Arizona.

• Provides networking opportunities and facilitates mutual understanding and relationships between government and Arizona industry.

Maricopa Association of Governments (MAG)

• Established in 1967, MAG was developed as a nonprofit corporation to act as the vehicle to address areas of common interest for the metropolitan Phoenix area.

• Provides regional planning and policy decisions in areas of transportation, air quality, water quality, and human services.

National Association of Manufacturers (NAM)

• Founded in Cincinnati, Ohio in 1895, NAM is the nation’s largest industrial trade association.

• Advocates for its members’ interests on issues ranging from health care reform and labor relations to energy and the environment to trade policy and taxes.

These organizations provide services and activities that benefit a wide variety of industries, including the

AD&S industry. The industry leaders and stakeholders who participated in these interviews

acknowledged that even in this crowded arena, there is still room for a separate organization to act as a

single voice for the AD&S industry.

In order to add value to the industry, a new trade association, economic development agency, public-

private partnership or advocacy group must play a distinct role separate from the functions of existing

organizations. Moreover, strategic relationships must be established with existing organizations to

leverage the strengths of each entity and avoid duplication of efforts.

Entities like the Arizona Aerospace & Defense Commission attempt to address the unique issues facing

the industry but are limited in the types of activities they can engage in due to lobbying and gifting

statutes in the state. The Arizona Technology Council can freely engage in lobbying and advocacy


activities, but its wider appeal and target market encourages a focus on the most common and generic

issues affecting members, rather than issues specific to the AD&S industry.

3.5. Workforce: The A&D industry requires a steady supply of Engineers and Scientists supplied by Arizona’s four leading

universities, alongside skilled technicians, machinists and other trades proficient in Science, Technology

Engineering & Math (STEM) from Arizona’s technical schools and community college system.

3.5.1. Hiring Issues

Having a reliable supply of skilled workers is essential, whatever the industry. Arizona’s AD&S

companies hire from a variety of sources including local colleges and universities. However, they are

particularly concerned by the diminishing appeal of Arizona for out-of-state senior hires, compared to

previous years.

One reported factor contributing to the diminished appeal of Arizona is its education system. Arizona’s

K-12 education is currently ranked 45th in the nation (Ladner, LeFevre, & Lips, 2010), with many children

under-performing in reading and mathematics. Moreover, there has been little improvement in results

between 2003 and 2009.

Figures 1 & 2 illustrate the 2009 scores for children in Arizona and their gains/losses on National

Assessment of Educational Progress (NAEP) fourth- and eighth-grade reading mathematics exams from

2003 to 2009.


Figure 1: Overall NAEP Scores for Low-Income Children (2009)

Source: (Ladner, LeFevre, & Lips, 2010)

Figure 2: Change in NAEP Scores for Low-Income Children

Source: (Ladner, LeFevre, & Lips, 2010)

200

220

240

260

280

300

320

340

4th-Grade Math 4th-Grade Reading 8th-Grade Math 8th-Grade Reading

NAE

P Sc

ores

Basic Arizona Proficient Advanced

0

50

100

150

200

250

300

4th-Grade Math 4th-Grade Reading 8th-Grade Math 8th-Grade Reading

NAE

P Sc

ores

2003 2009


Additional factors that represent a challenge in recruiting senior hires to the state include:

• Arizona’s tarnished reputation due to controversial issues such as gun laws and immigration;

• the reduced mobility of prospective employees, unable to sell their current homes due to the

economic recession and state of the housing market; and

• a lack of minority professional communities in Arizona.

Many organizations in the state are currently addressing these issues, and the contributions put forth by

an organization serving as a focal point for the AD&S industry would certainly help bolster these efforts.

3.5.2. Workforce Supply

Although some AD&S firms report having issues enticing senior new hires to relocate to Arizona, other

areas of hiring do not suffer the same challenges. The State offers a healthy supply of engineers and

skilled workers with varying degrees of education and expertise through its universities, technical

schools and community colleges. The following tables list these institutions and their programs and core

competencies.

Table 3: Arizona’s Four Lead Research Entities

INSTITUTION CORE COMPETENCIES

Arizona State University (ASU)

• Aerodynamics and fluid mechanics, • Helicopter Electromagnetics • Nanofabrication • Control Systems • Combustion Dynamics • Planetary Sciences • Aeronautical Management Technology • ADRC • Security & Defense Systems Initiative (SDSI)

University of Arizona (UA)

• Optics • Spacecraft Design • Aerodynamics • Aircraft structures • Manufacturing


• Sensors & Actuator Design • Propulsion Systems • Signal Processing • Telecommunications • Modeling & Simulation

Northern Arizona University (NAU)

• Environmental • Ecosystem • Sustainable Energy

Embry Riddle Aeronautical University (ERAU)

• Flight Engineering • Space Physics • Global Environment & Management • Global Security & Intelligence Studies • Computer Science • Aviation Business Administration • Meteorology • Safety Science • UAV • Autonomous Helicopters • Computational Fluid Dynamics • Airport Runways • Fatigue Analysis of Aircraft Structures

Table 4: Arizona’s Schools & Technical Colleges

INSTITUTION PROGRAMS OFFERED

Anthem College Business Management, Business Networking & Security, Computer Science, Computer Aided-Drafting, Electronics Technology, Information Systems, Management, Master of Business Administration

Argosy University Information Systems, Information Systems Management Arizona Automotive Institute

Advanced HVAC and Basic Refrigeration, Automotive Service Technology, Diesel - Heavy Truck, HVAC and Basic Refrigeration, Combination Welding

Brookline College(Phoenix, Tempe or Tucson)

Business Technology Specialist (Diploma)

Brown Mackie College Information Technology College America Phoenix Computer Science (BS), Computer Programming (Associates), Computer

Technology & Networking (Associates) DeVry University (Glendale, Mesa or Phoenix)

Engineering & Information Sciences, Electronics and Computer Technology (Associates), Network Systems Administration (Associates), Biomedical Engineering Technology (BS), Computer Engineering Technology (BS), Computer Information Systems (BS), Electronics Engineering Technology (BS), Electrical Engineering (Masters), Information Systems Management (Masters)


East Valley Institute of Technology

Marketing, Management, and Entrepreneurship; Automotive Technology, Collision Repair Technology, Diesel/Heavy Equipment Technology, Computer Service Technician/Networking, Electronics, Aviation Flight Training, Aviation Maintenance Training, Engineering Technology

Everest University (Online)

Computer Information Science (Associates), Computer Information Science (BA)

Fortis College Biotechnology (Associates) ITT Technical Institute (Central Phoenix, Tempe, Tucson or West)

Information Systems Security (BS), Information Technology - Computer Network Systems (Associates), Electronics and Communications Engineering Technology (BS), Computer and Electronics Engineering Technology (Associates)

Keller Graduate School of Management

Information Systems Management (Masters), Network & Communications Management (Masters), Biomedical Engineering Technology (BA), Computer Engineering Technology (BA), Computer Information Systems (BA), Electronics & Computer Technology (BA), Electronics Engineering Technology (BA), Game & Simulation Programming (BA), Multimedia Design & Development (BA), Network Systems Administration (BA), Technical Management (BA)

TechSkills (Mesa and Phoenix)

Information Technology - Cisco Certification, CompTIA Certification, Database Administration, IT Security, Microsoft Certification, Networking, Oracle

The Refrigeration School, Inc.

Refrigeration, AC, Heating, Electronic Technologies, Electro-Mechanical Technologies, Mechanical Maintenance

Universal Technical Institute Phoenix

Automotive Technology Training Program (51 week program), Diesel & Industrial Technology Training Program (45 week program),

University of Advancing Technology

BS: Advancing Computer Science, Enterprise Software Development, Network Engineering, Network Security, Robotics & Embedded Systems, Strategic Technology Development, Technology Forensics, Technology Product Design, Open Source Technologies; MS Advancing Computer Science, Emerging Technologies

Arizona Western College Air Conditioning and Refrigeration, Automotive Technology, Biology, Chemistry, Computer Graphics, CIS, Computer Security, Environmental Sciences, Industrial Graphics, Logistics, Mathematics, Networking

Central Arizona College Fire Science Technology, Manufacturing Engineering, Microcomputer Business Applications, Operating Engineer, Plumbing Trades

Eastern Arizona College Biological Science, Chemistry, CNC Machining, CAD & Drafting Technology, CIS, Database Support, Electrical and Instrumentation Technology, engineering, Environmental Technology, Graphic Design, IT, Machine Shop Technology, Mathematics, Physics, Renewable Sustainable Energy, Welding Technology

Maricopa Community Colleges

Aircraft Maintenance Technology, Airline Operations, Airway Science Technology (Flight Emphasis), Architectural CAD Technology, Associate in Science, Automation Technology, Biotechnology, Broadband Telecommunications, CAD Technology, Civil Engineering Technology, Networking, Graphic Design, CIS, Programming, Electrical Technology, Electro/Mechanical Drafting, Electronics Engineering, Hydrologic Studies, Information Security, Manufacturing Engineering Technology, Military Leadership, Power Plant Technology, Systems Analysis, Surveying Technology, Web Development, Welding

Pima Community College Computer Aided Drafting, Computer Information Systems, Computer Software Applications, Digital Arts, Associate of Science, Biotechnology, Engineering, Astronomy, Biology, Chemistry, Geography, Geology, Mathematics, Physics


Mohave Community College

Electrical Technology, Industrial Electrical Maintenance, Welding Technology, Chemistry, Geology, Mathematics, Science, Computer Information Systems Administration, CIS Foundation, Computer Graphics & Web Design, Computer Support Services, Essential Computer Technology, Network Support & Security, Professional Applications, Programming & Gaming Development, Systems Administration

Yavapai College Computer Networking Technology, Computing Systems and Applications, Electrical Instrumentation Technician, Graphic Design, Gunsmithing, Industrial Plant Technician, Professional Pilot – Helicopter

Cochise College Geography, Mathematics, Chemistry, Computer Science, Engineering, Physics, Manufacturing Engineering, Professional Pilot Technology, Avionics Technology, Computer Applications, Computer Information Systems, Computer Programming, Electronics Technology, Game Design and Creation, Information Security, Intelligence Operations Studies, Counterintelligence, Electronic Intelligence analyst, General Intelligence Operations, Ground Surveillance Systems Operator, Human Intelligence Collector, Intelligence Analyst, Linguist, Military Intelligence Systems Maintainer, Morse Interceptor/Communications Interceptor, Multi-Sensor Operator, Signal Collector Analyst, Signals Collection/ID Analyst, Signals Intelligence Analyst, Interpretation and Translation, Logistics Supply Chain Management, Manufacturing Engineering, Network Technology, Unmanned Aerial Vehicle Flight Operator, Unmanned Aircraft Systems Technician, Welding Technology

3.6. Connecting with suppliers:

The firms that participated in the interviews did not report a gap in connecting with their suppliers. The

unique nature of the AD&S industry presents certain value chain challenges that are currently being

addressed by each individual company.

AD&S supply chains are unique due to their dealings with the U.S. Department of Defense. Maintaining

suppliers costs more than other industries due to the certification requirements and quality assurance

processes demanded by government contracts. As a result, AD&S manufacturers try to limit their

number of suppliers as much as possible, and take great care in vetting new ones.

The complexity of the products developed by the AD&S industry also demands a reliable supply chain

that can grow alongside a long development lead time. As a product moves from an immature

technology to a mature one, its supply chain must remain flexible and be able to change from a

qualitative process to a quantitative one. For this reason, “… physical location is becoming increasingly


less important as businesses seek strategic partnerships with global firms offering best-of-breed

technology” (Garber & Withrow, 2008).

3.7. Activities in Support of AD&S Industry:

The following list of activities was identified by the interviewees as potentially having the most

significant positive effect on Arizona’s AD&S industry:

• gaining federal support for contracts;

• helping to attract high-tech firms in the State to support the industry;

• supporting research and education;

• advancing Arizona as a hub for Unmanned Aircraft Systems (UAS) research and testing;

• educating and informing the State Legislature about the benefits the industry brings to the

State;

• partnering with existing organizations and agencies in the state to create synergies;

• assisting small businesses in obtaining the necessary certifications to participate in military

contracts;

• serving as a vehicle for new vendors to enter the market;

• facilitating joint operations between industry and the military in the state; and

• promoting Arizona firms at national and international trade shows.

These activities represent current gaps not fully addressed by existing trade associations or economic

development agencies in the state. Section 4 will examine the AD&S strategies pursued by competitor

states and summarize their best practices.

Seidman Research Institute | Competitor Strategies 21

4. Competitor Strategies

Every state is different when it comes to their AD&S industry. Some states focus more on research and

development, while others have a large manufacturing base. Some states have a large military

presence, while others rely more on space flight or commercial aviation. To identify and describe best

practice outside Arizona, this report therefore focuses on three states that have a longstanding

reputation for effectively advancing the interests of their AD&S industry: Alabama, Florida & Virginia.

4.1.1. Alabama

Alabama’s aerospace industry is centered on the Marshall Space Flight Center and Redstone Arsenal in

Huntsville. It accounts for approximately 7,000 direct jobs in the state, and a payroll of $3.66 billion

(Encyclopedia of Alabama, 2010). The industry is made up of four primary business sectors:

• engineering, research & development;

• maintenance, repair and overhaul (MRO);

• information technology; and

• missile & space vehicle manufacturing.

These sectors represented over 80% of Alabama’s total aerospace and defense industry in 2008. The

following sectors employ fewer people but nevertheless play a significant role in the industry according

to a report prepared by the Center for Management & Economic Research at the University of Alabama

in Huntsville (Thompson & Yarbrough, 2010):

• missile & space vehicle parts manufacturing;

• aircraft parts manufacturing; and

• general manufacturing.

Over the last 20 years, Alabama has experimented with a variety of organizations aimed at promoting

the interests of the industry as a whole. Gaining insight through trial and error, it finally settled on an


industry led, focused and funded organization called The Alabama Aerospace Industry Association

(AAIA).

The AAIA represents three main AD&S sectors in Alabama:

• Defense: focused on aviation, R&D, command & control, and missile defense;

• Space: centered around the United Launch Alliance (ULA) facility in Decatur and the Marshall

Space Flight Center; and

• Commercial Aviation: dealing with general aviation (GA) and aircraft components.

The wide variety of companies that participate in these areas and the lack of commonalities across

sectors represent a challenge for the AAIA to offer services that benefit all of its members. For this

reason, the organization’s main focus is the promotion and dissemination of information about the

industry as a whole.

Although the AAIA does not participate in any sort of lobbying activities or host networking events, it

does promote growth of the Alabama’s aerospace industry through education, awareness of relevant

issues, and by connecting businesses to one another through an extensive members’ database.

4.1.2. Virginia

Virginia received the second highest amount of U.S. Department of Defense Prime Contracts ($38.8

Billion, FY 2009) behind California, and is home to major research and development assets, including:

• NASA’s Langley Research Center;

• Virginia Space Grant Consortium;

• Mid-Atlantic Regional Spaceport; and

• The Commonwealth Center for Aerospace Propulsion Systems (Virginia Economic Development

Partnership, 2011).

Virginia’s proximity to major government agencies and housing of important military installations makes

it one of the most important states for AS&D in the United States.


The Northern Virginia Technology Council (NVTC) is a key important trade association that satisfies the

needs of specific technology sector members, while still retaining a large, heterogeneous membership.

By combining large-scale “signature” events with more specific committee-level events organized by 15

committees and task forces, the NVTC reaches a wide audience and lessens the risk of alienating

individual groups within the technology industry.

For example, the “Business to Government – B2G” committee focuses on activities that help companies

engage in business with the Federal Government. The committee recently held an event called Breaking

into Government Sales – How Emerging Companies Can Begin Doing Business with the Government that

provided guidance for member firms looking to participate in government contracts (Northern Virginia

Technology Council, 2010). Although not directly aimed at AD&S firms, this kind of knowledge can be

very useful to new and emerging companies interested in doing business in the industry.

Some of the NVTC’s other activities include:

• networking opportunities with more than 80 events each year;

• a proactive political advocacy presence to support state policies that foster a pro-business

environment;

• education on subjects ranging from committee-level issues to broader industry trends and

breakthroughs;

• member benefit programs, including cost-effective insurance programs;

• collaboration with other technology industry organizations;

• resources for technology-focused startups and entrepreneurs;

• philanthropic activities; and

• international business opportunities developed through meetings, events and hosting foreign

delegations (Northern Virginia Technology Council, 2011).

The large number and variety of the NVTC’s activities demonstrate the challenge that associations with

less resources face when trying to meet diverse membership needs. It also emphasizes the tradeoff

between having a large association with greater influence that is less focused on the needs of individual

industries or firms, as opposed to a smaller organization with a narrow scope that is capable of

addressing specific membership concerns. This dichotomy is illustrated in Figure 3.


Figure 3: Specificity of Needs vs. Size of Organization

Larger organizations with many members from different industries tend to lose the ability to satisfy

specific needs of groups within their membership. Conversely, organizations with a very narrow scope

tend to have fewer members and thus sacrifice their ability to influence policy decisions.

4.1.3. Florida

Since 1969 when the U. S. Navy relocated its training facility from Virginia to the Florida, the state’s

AD&S industry has grown to nearly 450 companies, employing over 31,000 people (Enterprise Florida,

2000). Florida is host to the Kennedy Space Center and Cape Canaveral, providing spaceport capabilities

and billions of dollars worth of launch infrastructure that support a variety of space companies.

Similar to other states, the aerospace industry in Florida is comprised of three sectors:

0

1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

Spec

ifict

y of

Nee

ds

Size (Influence)


• space;

• commercial aviation; and

• defense.

One of the pillars of the AD&S industry in Florida is its Modeling, Simulation & Training cluster (MS&T).

The strength of MS&T within Florida today is attributed to a large extent to the following:

a. The State is home to the Naval Air Warfare Center Training Systems Division, plus the Army’s

Program Executive Office, Simulation Training and Instrumentation facilities.

b. The University of Central Florida offers leading graduate and postgraduate programs in

simulation and training systems, as well as founding the Institute for Simulation and Training – a

major source of internships, scholarships and grants for the MS&T industry.

c. Significant support is received from The National Center for Simulation, a non-profit

organization that promotes simulation technology both within the region and nationally.

d. Florida’s Center of Excellence for MS&T promotes modeling and simulation technologies across

commercial and military applications.

e. Research Park promotes collaboration through mere geographic proximity.

f. Florida Department of Commerce supports Research Park through building grants.

g. Florida’s congressional delegation has joined the MS&T Caucus.

In the mid-1990s, the Florida Legislature established Enterprise Florida, Inc. as a non-profit economic

development corporation. Utilizing private-sector and public-sector expertise, Enterprise Florida is

responsible for

• increasing private investment in Florida;

• advancing international and domestic trade opportunities;

• marketing the state both as a pro-business location for new investment and as a tourist

destination;

• revitalizing Florida’s space and aerospace industries, and promote emerging complimentary

industries;

• promoting opportunities for minority-owned businesses;

• assisting and marketing professional and amateur sport teams and sporting events in Florida;

and


• assisting, promoting, enhancing economic opportunities in the state’s rural and urban

communities.

Enterprise Florida, Inc. is governed by a 17-member board of directors chaired by Florida’s Governor.

Board members include government officials and private-sector individuals with expertise in

international business, tourism marketing, space and aerospace industry, or manufacturing. The board

of directors appoints a president, who serves at the pleasure of the Governor. Funding for the

corporation is provided as part of Florida’s Economic Development Programs and Projects budget entity

(Florida Office of Program Policy Analysis & Government Accountability, 2011). Since its inception,

Enterprise Florida, Inc. has served as a mechanism for the funding of a many of programs and entities

from a variety of industries throughout the state.

In May 1997, the Florida Legislature chartered the Florida Aviation Aerospace Alliance (FAAA), which

initially received two years’ seed funding from Enterprise Florida, Inc. in order to ensure the successful

launch of its programs and services. Since 1999, the FAAA has been fully self-funded primarily through

membership dues paid as a function of the size of the member organization. It is also subject to

favorable tax treatment due to its structure as a 501(c)6 corporation.

FAAA membership includes small, medium and large companies, academic institutions and a variety of

governmental agencies. Membership in the alliance is open to any organization doing business in

Florida related to aviation, aerospace or defense goods and services. To benefit the majority of its

heterogeneous membership, the organization focuses some efforts on specific bills related to the cost of

doing business in the State. Examples of the legislative action supported by the FAAA include:

• removing the sales and use tax on parts and repair of aircraft;

• modifying the sales tax exemption on electricity used in manufacturing; and

• securing a capital investment tax credit.

In addition, the FAAA supports its members by helping them obtain skilled workers. Activities in this

area include:

• developing an education and training action plan;

• obtaining funding for the Florida Space Institute; and

• entering into an agreement with the State Board of Community Colleges for the development of

specific technical training programs.


Members receive unlimited access to web pages on an FAAA website, where they can describe their

capabilities, interests and needs, and promote their wares to other members. They also receive

monthly emails and a quarterly newsletter, and are invited to semi-annual general membership

meetings or professional seminars.

4.1.4. Best Practices

An analysis of the activities performed by the various voluntary associations highlighted in the previous

section yields several important best practices.

k) Balancing the needs of the entire membership with those of sub-groups within the organization

is a challenge that must be met to continue receiving support from member firms.

l) Assisting federal delegations through education and lobbying activities improves the business

environment for member firms.

m) Connecting member firms with each other creates synergies that lead to collaboration.

n) Educating the public and their membership about pertinent industry issues raises awareness

and elevates the industry’s profile.

o) Providing a single point of contact facilitates engagement with outside parties who want to do

business in the state.

p) Marketing the state as a superior place to do business not only raises awareness of what the

state has to offer. It also facilitates getting the attention of policymakers.

q) Setting up an organization as an industry- led, focused and funded entity enables it to engage in

advocacy and lobbying activities not available to government agencies.

r) Educating small businesses and suppliers with the knowledge necessary for doing business with

the federal government will foster the growth of existing business in a state and offer an

attractive benefit to new businesses looking to relocate.


s) Providing a mechanism for effective and clear communication between research, industry,

government and military entities in a state fosters growth in the industry by enabling the state

to compete for bigger contracts.

t) Creating an organization that serves as a focal point for the industry enables it to effectively

engage with state and federal government agencies, other supporting industries, military

entities, research facilities, national and international industry organizations, and other industry

stakeholders.

These best practices provide insight into what organizations in other states have learned to do well.

They offer Arizona an opportunity to learn which activities work and discover how best to apply them to

the unique AD&S industry in the State.

By intersecting the best practices identified in this section, it becomes clear how these activities can help

address the issues/gaps revealed in Section 3. The table below illustrates these points of intersection.

Table 5: Best Practices vs. Industry Gaps Matrix

Best

Pra

ctic

es

Issues/Gaps in Arizona AD&S Industry

Support for Federal Contracts

Attraction of high-tech firms

Research & Education

UAS Research and Testing

Educating State Legislature

Partnering with existing organizations

Assisting small businesses

Facilitating joint operations

Trade show promotion

Balance between members

Lobbying activities Connecting & Collaboration Educating public Single point of contact Marketing Arizona Industry focused Education Services Communication within industry

Industry Focal Point


An analysis of the points of intersection between best practices and issues/gaps in the industry suggests

that the establishment of an AD&S industry trade association in Arizona is critical. Alabama, Florida and

Virginia are all successfully supported by AD&S trade associations that interact with different levels of

government and industry partners. These organizations also implement a flexible range of activities to

support AD&S stakeholders of every size and type.

An AD&S trade association would serve as a focal point for the industry and address the specific needs

of member firms. The success of such an organization greatly depends on enlisting the collaborative

efforts of its members. Through an in-depth literature review, Section 5 will examine how firms can

effectively collaborate through a trade association.

Seidman Research Institute | Literature Review 30

5. Literature Review

To create a general framework for the examination of industry collaboration, an in-depth literature

review has been implemented, encompassing economics, social psychology and political science. The

literature reviewed in this report is listed in Table 6.

Table 6: Literature Review Publications

This literature review revealed three main themes concerning effective means of collaboration within an

industry:

• Communication;

• Structure; and

• sharing of information.

Author(s) Publication

Lori Rosenkopf, Anca Metiu,

Varghese P. George

From the Bottom Up? Technical Committee Activity and Alliance Formation

Elinor Ostrom Building Trust to Solve Commons Dilemmas: Taking Small Steps To Test An Evolving Theory of Collective Action

Elinor Ostrom Collective Action and the Evolution of Social Norms

Robyn M. Dawes, Jeanne

McTavish, Harriet Shaklee

Behavior, Communication, and Assumptions About Other People’s Behavior in A Commons Dilemma Situation

Edella Schlager Resolving Common Pool Resource Dilemmas and Heterogeneities Among Resource Users

Xavier Vives Trade Association Disclosure Rules, Incentives to Share Information, and Welfare

Francis Bloch Coalitions and Networks in Industrial Organization

Michael J. Lenox, Jennifer Nash Industry Self-Regulation and Adverse Selection: A Comparison Across Four Trade Association Programs

Edna Tusak Loehman, Steve

Rassenti

Design of A Coordination Process for Cost Sharing

Alison J. Kirby Trade Associations as Information Exchange Mechanisms


5.1. Communication

In 1965, Mancur Olson proposed that no self-interested person would contribute to the production of a

public good without external influences and that “… rational, self-interested individuals will not act to

achieve their common or group interests” (Olson, 1965, p. 2). This theory has been challenged by many

political and social scientists. After all, observable evidence like people voting, not cheating on their

taxes and participating in voluntary business associations suggest otherwise (Ostrom, 2000).

Not surprisingly, it has been demonstrated that collective problem solving occurs most easily when

people are able to effectively communicate. Through social experiments, researchers have confirmed

that a key factor in determining the extent to which individuals cooperate lies in whether or not they

have a means to effectively communicate with each other (Dawes, McTavish, & Shaklee, 1977). In fact,

when given opportunities for engaging in meaningful communication, many people “… develop

ingenious strategies to use attributes of their environments to achieve high returns.” (Ostrom, 2008)

So, what does communication mean for firms within an industry?

Communication between firms not only means engaging in individual dialogue, although networking

often leads to collaboration even among heterogeneous firms (Rosenkopf, Metiu, & George, 2001); it

also means sharing information about similar challenges and building trust born out of an understanding

that their future profits are commonly affected by the same external factors.

Firms within an industry often find that collaboration through a voluntary business association yields

benefits not easily attained through independent actions. For example, as of August, 2011, the

Aerospace Industries Association has 151 full members and 188 associate members, collectively

representing 90% of the aerospace market, and providing support to an organization that offers them:

• interaction with industry and government leaders;

• access to the latest information about the industry;

• a presence at major trade shows; and

• research, financial analysis, & communications support (Aerospace Industries Association,

2008).


This national organization’s members benefit from its activities and in turn contribute to it through dues,

sharing of information and participation in events. Moreover, the association provides a means through

which individual firms can collaborate to advance the common goals of the industry even when they

have no incentives for engaging in quid pro quo relationships among themselves.

5.2. Structure

A common problem that industry groups face when collaborating lies in inherent differences among the

members. The Arizona AD&S industry is made up of a variety of companies focused on heterogeneous

fields from missile defense and delivery systems to command and control technologies. They vary in

many substantial areas such as:

• size;

• headquarter location;

• competitive advantage; and

• benefits received from collaboration.

These factors can affect the amount of resources a company has available to support the needs of the

group, and its willingness to participate in addressing issues shared by that group. The literature

suggests that an effective solution to the problem of heterogeneity in an organization is the formation

of sub-groups based on shared commonalities that allow for more effective collaboration (Schlager &

Blomquist, 1998).

Another concern of collaborative organizations is whether to encourage universal membership or

enforce some form of criteria-based exclusionary policy. One advantage of an exclusive membership is

that the benefits of an organization’s activities are shared by only a few. Exclusivity can also restrict

membership to firms that make a real difference to an organization such as those with existing

collaborative relationships. However, the literature suggests that this will not create the most effective

business environment:

“In models with open membership, a large, efficient alliance is formed whereas in models with exclusive membership a fragmented, inefficient structure with multiple competing alliances emerges.” (Bloch, 2002)


5.3. Sharing Information

The third issue addressed in the literature examines the willingness with which firms share information.

Traditionally, voluntary business associations engage in information sharing activities that are then

either distributed publicly or disseminated only to members. Typically, this process involves three steps:

1. collect individual company data, usually on production or demand;

2. compile the industry-wide totals; and

3. distribute aggregate reports to member firms and others.

To provide the most accurate totals for the industry, and thus the most valuable information, the

association is faced with the challenge of collecting information from the largest number of firms

possible. What the research suggests is that in a large market, non-exclusionary disclosure rules destroy

the incentives for individual firms to contribute their information to the pool (Vives, 1990).

Seidman Research Institute | Conclusion & Recommendations 34

6. Conclusion & Recommendations

Several key conclusions can be drawn from this report:

1. A single point of contact for AD&S is necessary in Arizona to allow out-of-state firms and entities to

easily engage and do business with firms in the industry.

2. The AD&S industry would benefit greatly from having an organization dedicated to addressing its

concerns with government representatives at the state and federal level.

3. Existing organizations in the State do not focus specifically on the needs of the AD&S industry, or

they deal mostly with policy matters and are not structured to provide comprehensive services to

industry members such as lobbying activities.

4. An organization in Arizona is needed to connect local suppliers and manufacturers.

5. The establishment of an AD&S trade association in Arizona would effectively meet the industry

needs outlined in this report by:

• balancing the needs of different sub-groups within the membership;

• advocating for the interests of the industry to state and federal delegations;

• connecting manufacturers to suppliers and fostering collaboration among member firms;

• educating the public and member firms about issues concerning the industry and thus raising

the industry’s profile;

• providing a single point of contact for the industry that facilitates engagement with outside

parties looking to do business in the State;

• marketing the State to outside businesses;

• offering education services to small businesses and suppliers that facilitate doing business in the

industry; and

• providing a mechanism for effective and clear communication between research, industry,

government and military entities in the State.

6. The success of an AD&S trade association depends in part on its ability to:

• facilitate communication among its members;

• create an open-membership model to create a large, efficient alliance; and

• develop disclosure rules for member-provided data that foster incentives for individual firms to

share their business information with the association.

Seidman Research Institute | <Bibliography 35

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Bloch, F. (2002). Coalitions and Networks in Industrial Organizations. The Manchester School , 70 (1), 36-55.

Clark, C. (2011, September 8). AOL National Defense: Strategy & Policy. Retrieved September 9, 2011, from AOL National Defense: http://defense.aol.com/2011/09/08/cut-defense-and-ill-quit-super-committee-kyl/

Dawes, R. M., McTavish, J., & Shaklee, H. (1977). Behavior, Communication, and Assumptions About Other People's Behavior in A Commons Dilemma Situation. Journal of Personality and Social Psychology , 35 (1).

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Garber, R., & Withrow, C. (2008). Integrated Value Chains in Aerospace and Defense: Managing Relationships and Complexity Up and Down the Value Chain. Chicaco, IL: A.T. Kearney, Inc.

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Ostrom, E. (2000). Collective Action and the Evolution of Social Norms. The Journal of Economic Perspectives , 14 (3), 137-158.

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Seidman Research Institute | Authors 37

Authors

Dr. Dennis Hoffman, Director of the Seidman Research Institute and Professor of Economics at the W. P.

Carey School of Business at Arizona State University

Alex Castelazo, Senior Research Associate with the L. William Seidman Research Institute at the W. P.

Carey School of Business at Arizona State University

L. William Seidman Research Institute

W. P. Carey School of Business

Arizona State University

www.seidmaninstitute.com

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