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Can the Northwest compete in the coming space race?

The booster of Blue Origin’s New Shepard rocket prepares to land in western Texas July 18, 2018. Jeff Bezos' Blue Origin rocket is based in Kent. (Blue Origin via AP)

The Puget Sound region is experiencing a literal “get in on the ground floor” moment as the space economy begins to warm up, and is expected to take off very soon.

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A study from the Puget Sound Regional Council concludes that “Washington state and the central Puget Sound region are positioned to lead commercial space exploration and development.” The next space race may very well be a regional competition as cities and states compete to become a hub for the space economy.

While the industry appears healthy in the Northwest so far, the report also notes that the need for skills and talent in the region will grow in the years ahead, especially for fields involving science, technology, engineering, and math. The region already boasts a bevy of aerospace companies and tech talent. But the report also argues that schools will need to ramp up programs in these fields if locals are to participate in the evolving industry.

Northwest space economy

The PSRC says that Puget Sound companies have spent 50 years growing the industry with research, development, and manufacturing across “a diverse pool of local and international companies providing a range of space-related services.”

“Focusing on the core elements of the space economy, including original equipment manufacturers, launch service providers, and satellite support services, these business are currently responsible for $1.8 billion in economic activity, with about 6,221 jobs supported across the entire economy,” the study reads, further noting that the Washington space economy constitutes $65 million in state and local taxes. The payroll for such companies adds up to about $610 million.

For example, Amazon CEO Jeff Bezos has a side company in Kent called Blue Origin. The aerospace manufacturer and spaceflight services company employs about 1,100 people and is expanding.

PSRC notes that Elon Musk’s Space X company — headquartered in Hawthorn, Calif. — has moved offices into Redmond and Seattle to support satellite and broadband initiatives. Not to mention a range of others — Boeing, Vulcan Aerospace, Spaceflight industries, Aerojet Rocketdyne, and Planetary Resources.

The PSRC report points to regional companies that supply: parts and components; upper-tier suppliers with original components; launch services; and products derived from spacecraft, satellites and launch vehicles. Also, businesses supported by space activities.

Investment bank Morgan Stanley estimates that the space economy will be worth $1.1 trillion or more in revenue by 2040. Others estimate that revenue will reach $3 trillion over the coming 30 years.

Labor market

Aerospace employment in the Puget Sound region peaked in the 1990s, but that employment fell by 2004, according to the PSRC. Projections show that this labor force will “remain stable” at around 77,300 employees in 2026.

There are a few points that will greatly affect the labor figure that the region needs to address, the report argues:

  • An aging workforce: The report calls this a “silver tsunami.”  Baby Boomers will retire, leaving their positions in the aerospace industry. “It was estimated in 2016 that nearly 23 percent of aerospace workers were eligible for retirement, and that nationwide over the next decade up to 190,000 workers will need to be replaced,” the study states.
  • Automation: The costs of producing products will encourage automation to bring costs down. These systems could eliminate some manufacturing positions.
  • There are gaps in supply and demand for software development and industrial engineering.

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