Economic Development for Defense Communities

ED 711- Economic Development for Defense Communities Group Exercise

You will work as a group on this exercise.

The final assignment consists of a PowerPoint presentation during the last online session on July 20 and a written report of findings due at the end of the course on July 27.

The final paper should not exceed 15-20 pages in length (double space) using the same margins and fonts as used in the individual exercise.

The final PowerPoint should include audio for each slide.

The presentation should be condensed to 10-12 minutes in length. Longer presentations will receive lower grades. One of the skills the exercise is designed to teach is how to condense your findings into the most relevant material. Each group should appoint a leader.

The leader will be the single communication link between the instructor and the group. Any questions or clarifications should come through the group leader. The group leader should identify themselves to the instructor via Canvas email. All members of your group have collected data on the same community in the first exercise.

The instructor advises that you share your papers with the other group members to provide a common factual basis for the remainder of the assignment.

Make sure you have a common basis of factual information for the rest of the assignment before proceeding to the other steps in the exercise. The final paper and presentation involves further analysis on the community and an investigation of the opportunities and threats that the community faces from changes in procurement policy and programs at DOD. The following list provides the tasks that teams should complete before writing the report and presentation: 1).

Estimate the correct level of direct employment and payroll in the community from DOD spending. This step could involve estimating the proportion of employment within identified NAICS codes that is not DOD related. As an example, employment in the aerospace NAICS could include military or civilian aerospace spending. If so, estimate the share from DOD spending using a valid economic development method. EMSI data and their Impact Assessment Tool will make this step much easier. 2).

Estimate the indirect and induced employment, payroll and spending from the DOD spending calculated in Step #1. The combination of direct, indirect and induced impacts are the total impacts of DOD on the economy of the community.

You should determine what percent of the total economy stems from defense spending. You should also look at the DOD spending per person as another metric of how sensitive the economy is to shifts in DOD procurement policy. This type of information is not relevant unless compared to some yardstick. The best yardsticks to use are DOD spending per person in the same state and nationally. This information is shown in the Defense Spending by State report. 3).

Use the EMSI data to determine other economic drivers in the community. Determine how important these drivers are in the economic health of the community relative to DOD spending. 4).

Determine how future changes in DOD procurement spending will affect the economic health of the community. This step must involve more than a recitation that employment and spending goes up if the DOD budget rises.

Threats stem from policy changes where future DOD spending will decline for an activity that is done within the community. Opportunities are the opposite. Shifts in the National Defense Strategy and in the Industrial Capabilities Report, and data on trends in procurement spending, are sources for the strategic assessment. Communities may see the same change as either an opportunity or a threat.

For example, the 1995 BRAC round was a threat to San Antonio because DOD was going to outsource aircraft maintenance to airframe companies and consolidate Air Force logistics centers. Oklahoma City, another AFLC site, saw the change as an opportunity to capture more of the AFLC workload as depots closed.

Leaders in Oklahoma City saw the change as an opportunity while leaders in San Antonio saw it as a threat. The difference in assessments could stem from the relative strengths and weaknesses for this kind of economic activity in San Antonio and Oklahoma City. This kind of competitive assessment should be incorporated into your group paper.

The group should investigate the specific DOD procurement and operational activities that will affect the community under investigation. If the industrial base in the community, for instance, is tied closely to aircraft procurement or maintenance, the group should identify changes in aircraft acquisition and maintenance policy as one of the points of vulnerability for the community.

The Annual Industrial Capabilities report and the National Defense Strategy are good sources to examine to identify future opportunities and threats for the community under investigation. Materials from trade associations and other course materials will enrich the presentation and paper.

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