Out of Control Policy Blog

NASA and the Florida Job Creation Machine

An interesting if little noticed job creation drama is taking place on Florida's "Space Coast" (the Atlantic Coast in the middle part of the state) as NASA implements a 6,000 job downsizing. It turns out, Florida has some natural advantages for space operations and technology as well as a highly skilled and trained labor force, and private companies are stepping in as the government backs out. Indeed, recently NASA has decided to sell off some of its biggest assets at Kennedy Space Center to private companies, including Boeing, creating hundreds of jobs in the process. As an article from Time magazine (Nov 1, 2011) notes:

"In 2006, with the shuttle shutdown looming, the Florida legislature established a publicly chartered corporation called Space Florida to dangle the carrots and cut the deals necessary to coax those moves — and it has had some real successes. AAR, an aircraft maintenance and repair corporation, recently moved to Melbourne, Fla., not far from Cape Canaveral. Lockheed Martin, which is building NASA's multipurpose crew vehicle — a souped-up Apollo spacecraft that will be used for the eventual deep-space missions — has relocated its operations to an empty building on the grounds of the Kennedy Space Center. "The state spent about $35 million to refurbish the building," says Frank DiBello, president and chief executive of Space Florida. "But that investment has created about 385 jobs."

"It's the Boeing move, however, that has caused the most excitement, with its bigger jobs footprint and successful repurposing of so much Canaveral real estate. What's more, Boeing is not the only company in the commercial space game. California-based SpaceX has already set up operations at the nearby Cape Canaveral Air Force Station and successfully launched an unmanned version of its crew vehicle into orbit and recovered it safely. The company has inked a $1.6 billion contract with NASA for a dozen unmanned cargo runs to the space station, with the possibility of manned flights to follow.

"Three other companies, including Virginia-based Orbital Sciences, Washington-based Blue Origin and Nevada-based Sierra Nevada, are also battling for a slice of the commercial space pie. All of them could compete both for NASA's business and for any other enterprises that open up in Earth orbit — and all of them have Space Florida's attention. Only some of the young companies will thrive — that's the nature of the competitive beast — but that's not Florida's concern."

I think it's notable that Florida: 1) recognized that this could be an opportunity, and 2) established a private company to coordinate the redevelopment efforts. While the process has not been without subsidy--the state has made available about $34 million in tax breaks and incentives to companies interested in relocating--the redevelopment efforts are still largely privately led and the growth depends crucially on the development of a private, domestic space industry that takes advantage of Florida's existing labor force and infrastructure. Like the military base closings in prior years and in other states, Florida is finding that the private sector can step in when the government steps out.

Samuel Staley is Research Fellow


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