Aerospace in Pennsylvania: Opportunities in the Defense Sectors

Information on the state:

Pennsylvania, officially the Commonwealth of Pennsylvania, is a state located in the northeastern and Mid-Atlantic regions of the United States. The Appalachian Mountains run through its middle.

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Pennsylvania is the 33rd-largest, the 5th-most populous, and the 9th-most densely populated of the 50 United States. The state’s five most populous cities are Philadelphia (1,567,872), Pittsburgh (303,625), Allentown (120,443), Erie (98,593), and Reading (87,575). The state capital, and its ninth-largest city, is Harrisburg. Pennsylvania has 140 miles (225 km) of shoreline along Lake Erie and the Delaware Estuary.

Pennsylvania’s Defense Industries

Pennsylvania has a well-established and robust defense industry. Our expertise in manufacturing, critical mass of higher-education and research institutions, and location on the East Coast of the United States create a natural competitive advantage for our defense suppliers and prime contractors that work closely with the U.S. Department of Defense (DoD). Accounting for more than a third of global defense spending, the DoD is a key driver of our defense industry and its activity. In Pennsylvania, DoD contract obligations exceed $10 billion each year, not including personnel costs which account for another $2.5 billion annually.

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BAE System –  Bradley Fighting Vehicle System

According to a recent study conducted by Fourth Economy Consulting and released in August 2017, the DoD’s defense contract spending in Pennsylvania is concentrated in three significant sectors: Aerospace; Military Vehicles; and Research, Development, Testing & Evaluation (RDT&E). More than 50 percent of this spending is accounted for by six product categories including Drugs & Biologicals; Rotary Aircraft; Nuclear Reactors; Space Vehicles; Combat Assault & Tactical Vehicles; and Weapons Systems & Vehicular Accessories.

Strengths in Manufacturing and R&D

Pennsylvania’s specializations in Aerospace, Military Vehicles, and RDT&E are influenced by our history in manufacturing, strength in fostering innovation, and leadership in higher-education and research & development. We have supply chain clusters for Aerospace, Military Vehicles, and RDT&E across the state – particularly in the southern regions of Pennsylvania. Many of the most recognizable names in the defense industry have operations in Pennsylvania, including Lockheed Martin, Northrop Grumman, Boeing, and BAE, as well as many of their suppliers and contractors.

Top manufacturing industries in our defense supply chains range from metals manufacturing (steel and ferroalloy), to advanced technologies and parts manufacturing. Pennsylvania companies manufacture a wide array of defense-related products, including aircraft and engines, semiconductors and related devices, guided missiles and space vehicles, military armored vehicle and tanks (like the Bradley Fighting Vehicle System), and more.

On the services side, Pennsylvania has a large share of corporate and regional managing offices, and a wealth of firms offering engineering, scientific, and technical consulting services in support of the defense industry. DoD spending for RDT&E in Pennsylvania is nearly $1 billion annually, and forecasts by Fourth Economy anticipate strong employment growth in this sector.

Welcoming International Investment

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Pennsylvania welcomes investors of all sizes, including established multinationals, small or medium-sized enterprises, and high-growth startups. Home to more than 6,100 foreign-owned firms employing over 334,000 workers; the commonwealth has been providing quality assistance to international companies for more than 20 years. The Office of International Business Development (OIBD), housed within Pennsylvania’s Department of Community and Economic Development (DCED), offers customized services to help international companies looking to locate or expand in our state. OIBD’s network includes a team of global investment representatives covering more than 30 countries, regional and local government organizations, industry associations, and various other partners to engage international companies in Pennsylvania’s business community.

In June 2017, Governor Tom Wolf issued a proclamation: the Open Investment Policy Statement. This proclamation formally commits Pennsylvania to establishing a welcoming environment for investment from global companies, providing support to ensure success of companies investing in the state.

The governor’s proclamation underlines Pennsylvania’s consistent efforts to attract and retain international companies by engaging with businesses while showcasing the advantages Pennsylvania offers, including a skilled workforce, high quality of life, world-ranked academic and research institutions, and a strategic location in the heart of the East Coast.

Currently, the United Kingdom, Germany, Canada, France, Japan, and Switzerland round out the top six countries leading in foreign investment in Pennsylvania. However, we also have a growing number of Brazilian, Irish, Israeli, and Chinese firms in the state. Pennsylvania, the sixth-largest state in population, is the fourth-largest state for people working for international companies.

With a diverse base of businesses and the most cost-competitive business environment in the Northeast United States, Pennsylvania offers a skilled and trained workforce, one of the strongest supply chains in North America, and an optimal central location to help global companies succeed in the prosperous American market.

About the Author

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The author: David Briel

David Briel is the Executive Director for International Investment with the Office of International Business Development at the Pennsylvania Department of Community & Economic Development. For more information about international investment in Pennsylvania and opportunities to locate and expand in the state, contact David at dbriel@pa.gov or visit dced.pa.gov/intl.     

THANK YOU David!

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