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FY 2015 Defense Spending By State report now available for download.

Arizona Diversification Initiative

Purpose: 

Regional Background

Arizona is home to more than 1,200 companies specializing in space, aviation, security, and defense. Together, these companies support an estimated 150,000 jobs and the Aviation and Defense (A&D) sectors account for up to 8 percent of the state’s GDP while contributing $8 billion to the local economy. In early 2012, DoD released a proposed Fiscal Year 2013 budget that contained significant procurement cuts which resulted in the elimination and reduction of several weapons systems manufactured in Arizona. These procurement cuts were the catalyst for the Arizona Commerce Authority (ACA) intervention to retain the state’s high-quality, knowledge-intense A&D jobs and develop new growth markets, especially for small and medium-sized supply chain firms that were deemed most vulnerable.

Project Overview

DoD’s Office of Economic Adjustment issued a Defense Industry Adjustment grant to ACA to assist in the rebuilding of Arizona’s A&D job market by identifying emerging markets and potential gaps to be filled. The project is made up of two distinct parts:

  • Part One: ACA launched the Arizona Diversification Initiative (ADI) to work with individual companies to create new business ventures and diversify clientele as a way to bolster Arizona’s A&D job market. The ADI pilot program provides technical assistance such as one-on-one coaching, intensive workshops and training, and roundtable peer meetings over a one-year period. These services are designed to help the companies create and implement new business development models that generate value and promote business expansion. ADI selected seven companies to participate in the pilot with the hope that they will develop products and applications that address the regional market’s needs.
  • Part Two: ACA is expanding its supply chain database and industry analysis to help local companies by matching them with business opportunities and for future planning for economic diversification. This effort will leverage ACA’s existing A&D database of over 1,000 companies and expand its depth of the information. This database is a compilation of information originally gathered from ACA outreach and interviews, partner companies, and community partners such as Arizona State University.

Projected Outcomes

The function of this program is to assist in the rebuilding of Arizona’s A&D job market by identifying emerging markets and potential gaps to be filled. Lessons learned from working with individual companies will be captured and used to fuel Arizona’s overall defense adjustment strategy. The ACA supply chain interactive database and industry analysis will serve as a resource to match local companies with business opportunities and for future planning for economic diversification. The database will also be beneficial to lowering unemployment rates, as the state’s job seekers will be able to utilize it to identify firms that are looking to hire employees with certain skill sets and certifications.

State:
AZ