A newly published economic report estimates the space industry’s contribution to Washington state’s economy at $1.8 billion and 6,200 jobs in 2018 — and goes on to suggest ways to boost the industry to a higher orbit.
“The central Puget Sound region is already a worldwide leader in aerospace and information technology, and we plan on being a world leader in the space industry as well,” Terry Ryan, a member of the Snohomish County Council and president of the Puget Sound Regional Council’s Economic Development Board, said today in a news release.
The regional council’s 60-page report, titled “Washington State Space Economy,” may be the first economic study of the Evergreen State’s aerospace industry that doesn’t lead off with Boeing.
Instead, the study highlights the role of Blue Origin, the space venture created by Amazon billionaire Jeff Bezos in 2000. Blue Origin’s workforce has already reached past the 1,500-employee mark, and Bezos has said he spends $1 billion annually to support the venture. (It should be noted, however, that much of that money goes toward development work in Texas and Florida.)
The report says Blue Origin “is now the largest regional employer in the space sector.”
“The founding of the Blue Origin headquarters in Kent has helped to boost the central Puget Sound region as a major location for space-related activities in the nation and across the world,” it says.
The report considers the economic contributions from Boeing Defense, Space and Security, which has employees in Kent, Tukwila and Everett — but not from Boeing Commercial Airplanes, which has a much larger presence in Washington state. Past studies have estimated the wider aerospace industry’s overall contribution to Washington state’s economy at nearly $70 billion annually, with Boeing accounting for much of that activity.
In addition to Blue Origin and Boeing, today’s report highlights home-grown space ventures such as Spaceflight Industries and Planetary Resources, as well as companies that are based elsewhere but have a significant presence in the state, such as SpaceX and Aerojet Rocketdyne. Stratolaunch Systems, the space venture created by Microsoft co-founder Paul Allen, also comes in for a mention even though most of its development work is done at California’s Mojave Air and Space Port.
The study notes that the Puget Sound region has had a long history of involvement in space activities — thanks to Boeing as well as Aerojet’s Redmond facility, which was originally known as Rocket Research. And it notes that the pace of commercial space activity is quickening.
“This expansion of ‘NewSpace’ or ‘Space 2.0′ has also broadened competition in areas traditionally reserved for governments and multinational corporations,” the study says.
That competitive shift, coupled with the software expertise fostered at Seattle-area companies such as Microsoft and Amazon, provides additional opportunities for Washington state.
“Washington state and the central Puget Sound region are positioned to lead commercial space exploration and development,” the study says.
The lack of a spaceport in the state may limit some of the opportunities for growth, “but it is not a constraint to the regional space economy overall,” it says. The study says the region would do well to specialize in other aspects of the space economy, such as rideshare management (which is one of Spaceflight Industries’ specialties) or satellite development and manufacturing (which is the focus of SpaceX’s Redmond operation as well as the recently announced LeoStella joint venture).
The study laid out several steps to bolster the region’s space economy:
- Provide state tax credits to support spacecraft and satellite manufacturing: Similar incentives have gone toward the airplane manufacturing industry in the past. Boeing recently disclosed that its tax savings amounted to $227 million in 2017, even as the company shed more than 6,000 jobs in the state. Such tax credits don’t currently apply to spacecraft and satellites. Measures that would do so have languished in Washington’s Legislature since 2015. The current version, SB 6411, “should be approved to support state and local businesses involved in space,” the study says.
- Support space-related startups with incubator / accelerator services: The report notes that all new companies need access to sufficient venture capital and supporting services, but space startups often have needs for facilities, capital and services that aren’t typical for the tech community — such as dealing with federal regulations governing space activities. For what it’s worth, the Techstars Seattle incubator program brought in its first space startup, Kepler Communications, in 2016.
- Develop and expand supplier relationships: Washington state’s aerospace companies, and particularly Boeing, have benefited from a highly developed supply chain. The report urges exploring opportunities to link upper-tier manufacturers with existing lower-tier suppliers, and to attract new suppliers that can address growing demands for a space-related supply chain.
BERK Consulting conducted the analysis for the Puget Sound Regional Council’s report, with support from Blue Origin, the Suquamish Tribe and several cities and counties in the Puget Sound region.