Defence: Innovation keeps space sector aloft

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Southern California used to be the undisputed king of the defence and aerospace centres – the biggest companies were based in the area – but then the Cold War ended and they left. Or so many people outside California seem to believe.

But it is a popular misconception that Los Angeles’s once thriving defence sector has ceased to exist. The industry has certainly contracted, following the waves of consolidation in the 1990s as the US came to grips with being the world’s only superpower, but the region around Los Angeles and southern California continues to be the acknowledged world leader in defence, thanks to an expertise in space technology design and development.

“California lost aircraft manufacturing but the space industry has become very strong,” says Michael Gruntman, a professor of astronautics at the University of Southern California.

He adds that about half of all US satellites are designed, developed and manufactured in the region.

The consolidation of the industry when the Cold War ended meant thousands of aerospace manufacturing jobs were lost. The industry now employs about 38,000 people locally, according to Los Angeles County Economic Development Corporation, compared with about 130,000 in 1990.

In spite of the industry’s smaller size, Los Angeles and southern California continue “to be the main aerospace centre in the US”, according to Jerry Nickelsburg, an economist at the UCLA Anderson School of Management.

“Manufacturers realised that metal-bending and riveting could be done elsewhere,” he adds. “The design, development and innovation stayed here but a lot of the assembly work went to other places.”

Space technology is driving much of the innovation in the industry, whether it is the Nasa scientists at the Jet Propulsion Laboratory in Pasadena or the defence engineers at Raytheon’s space and airborne business, which designs electronic warfare and next-generation radar systems.

All of the biggest defence companies continue to have substantial operations in or around Los Angeles: Boeing, Raytheon and Northrop Grumman are all based there, as is the Aerospace Corporation, a federally funded research and development centre that supports US national security, civil and commercial space programs.

Aerospace Corp has been based in El Segundo close to Los Angeles International Airport (LAX) for 50 years and provides technical support to the US Air Force Space and Missile Systems Centre, which is close by.

The group pioneered the first global positioning system (GPS) for satellite navigation, which came to public prominence in the first Gulf War and has become widely used in mobile phones and car navigation systems.

“It was developed for the military,” says David Gorey, senior vice-president of Aerospace Corp’s space systems group. “And 10 or 15 years later, there probably isn’t an individual who is unfamiliar with that system.”

Aerospace has a long and glittering history in California. The first space missions were planned in the state, inspiring a generation of engineers and technicians. “They were testing rocket engines [for the first space missions] near my home when I was a child,” says Jon Jones, president of Raytheon’s space and airborne systems business.

California has “always been a place that spawned and supported innovation”, he adds. “There have been a lot of innovators. People like Howard Hughes, [Donald] Douglas and Jack Northrop all started companies here.”

Military contracts continue to be the primary source of revenue for the city’s defence companies. “Thirty or 40 years ago this industry was primarily about building aircraft,” says Frank Flores, vice-president of engineering at Northrop Grumman.

“The products that we are developing today are very different. They’re not just air-vehicles ... they’re much more integrated and have more functions.”

The entrepreneurial spirit embodied by aerospace industry pioneers such as Hughes and Douglas continues in Los Angeles where new companies, such as Space X, are challenging established business models.

Based in Hawthorne, near LAX, the company was created by Elon Musk, the founder of PayPal. It is developing cheaper launch vehicles with the aim of reducing the cost of firing commercial satellites into orbit.

Recent international developments, such as the Russia-Georgia conflict and the recent downing by China of a weather satellite, are new challenges for companies that rely on US defence contracts.

“Space [technology] will play a big role in responding to these changes in the geo-political environment,” says Prof Gruntman of USC.

But the industry faces a looming challenge. During the consolidation era of the 1990s, many graduates chose to avoid the sector in favour of other technologically sophisticated industries, such as telecoms or IT.

Although that trend has since been reversed, the industry continues to suffer from a skills shortage.

Northrop Grumman, one of the largest aerospace employers in Los Angeles, is currently looking to fill more than 1,000 positions. “We have to develop a new generation of aerospace professionals,” says Mr Flores.

“The challenge we face is similar to the telecoms industry in terms of complexity. But the big difference is our products have to work first time.

“There’s no beta test for us ... with our products, lives are at stake.”

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