1. Office of Economic Adjustment Defense Industry Adjustment Program Building New Capacities for Defense Contractors June 21, 2016 Capital Hilton

3. New England’s Defense Industry Major contributor to the economy as a region and individually in each of its six states. In Connecticut, more than 1,100 firms and institutions (> than 21% of all contractors in New England) receive contracts to provide essential equipment, supplies, and technical services, representing ~$34B in purchases: about 10% of total defense and homeland security contracts. Significant driver for regional economic growth over the last decade, with DoD contracting responsible for more than 300,000 jobs and a payroll of more than $22.6B (~32% in CT); overall direct, indirect and induced economic activities generated by defense contracting in New England exceeds $62B.

4. 2010-2013: Town of East Hartford, in partnership with CCAT (local impacts of weapon systems contract cancellations) Framing of a workforce development model to address the impact of P&W F-22 program cancellation, expanded to include data on the regional supply chain. 2013-2014: RADE, Phase I – State of Connecticut (Department of Economic & Community Development, in partnership with CCAT (state governments where a “substantial portion of the economic activity is dependent on defense expenditures.”) Extend the work done under prior grants with additional planning to create and support a New England defense cluster via an innovative regional infrastructure. 2014-2016: RADE, Phase II Continue/expand the work of Phase I Connecticut and OEA

5. RADE Goals Assist businesses and workers, support adjustment and diversification programs, and align regional assets to fortify the sector. Develop an organizational model to facilitate collaboration among key partners and effective communication among state stakeholders. Create a robust New England defense community informed by data and supported by the dissemination of resources and best practice models.

6. RADE Tasks 1.The Economic Modeling Platform, a web-based, graphical, interactive tool for analyzing and assessing the dependency of the region on DoD spending. 2.The New England Defense Cluster, a network of stakeholders who will drive policy consensus in order to maintain and grow the industry in the region. 3.The Industry Commons, a web-based portal unique to the industry designed to share information, facilitate collaboration, and represent a collective voice for the sector. 4.The Virtual Workforce Toolkit, a collection of resources and services that provide best practices and model programs to respond to industry challenges and changes. Phase II: Addition of a CT-centric manufacturing technology innovation task to support DoD’s interest in the F135 and assist in diversification of the industry to commercial markets.

7. tal The RADE Defense Contract Economic Modeling measures the impacts of DoD contract spending in the New England states and graphically presents supply chain relationships.

8. Facts rather than anecdotal information enable companies and communities to make informed decisions. Using contract spending information from the EMP shows how this data can support economic development efforts for business attraction, retention and expansion. The prime-subcontractor relationships in the visualizations show where large contracts are performed and the economic impact of this on local economies. The data on supply chain leakage can help focus resources on keeping (or returning) business to the region that is currently being outsourced to other locations. Using the Model

9. 1.Increase opportunities for local companies The prime-subcontractor supply chain data identifying the products/services purchased can help local companies learn what they can potentially sell to primes via new subcontracts. 2.Target sector marketing Analyzing spending by industry data can help inform strategic development for specific industry sectors. 3.Support business retention and expansion Data obtained from the EMP can help prioritize business outreach efforts. 4.Guide strategic workforce development activity The Alternative Scenario can be used to identify the number of workers by 6-digit Standard Occupation Classification that are now or will soon be needed to meet contract obligations. Business assets

10. Workforce Toolkit A suite of resources for stakeholders to prepare and respond to federal budget decisions and program/ policy priorities impacting their workforce. Includes strategies, programs, and services to ensure continuity and retention of the skilled defense talent base.

11. Strategic Workforce Planning A web-enabled tool for small-medium sized defense manufacturers to help consider workforce needs within the context of strategic planning. Provides forecasting, planning, and analytics required to anticipate talent needs Estimates and quantifies future workforce requirements by occupation Informs partners about demand for recruitment, hiring and training support Guides program design and investment of public resources

13. RADE Industry Commons A web-based portal to facilitate social network mapping and resource sharing, further supporting the development of a unified regional defense cluster

14. PENNSYLVANIA DEFENSE INDUSTRY ASSISTANCE INITIATIVE – BACKGROUND

15. Sources: PA Military Enhancement Commission: 2015 Pennsylvania Military Installation Reference Manual (http://www.newpa.com/download/pmcec-installation-reference-manual/?wpdmdl=62765);http://www.newpa.com/download/pmcec-installation-reference-manual/?wpdmdl=62765 DoD/OEA: Defense Spending by State, FY2014 (http://www.defense.gov/Portals/1/Documents/pubs/FY2014_Defense_Spending_by_State_Report.pdf)http://www.defense.gov/Portals/1/Documents/pubs/FY2014_Defense_Spending_by_State_Report.pdf

16. – BACKGROUND Source: DoD/OEA: Defense Spending by State, FY2014 (http://www.defense.gov/Portals/1/Documents/pubs/FY2014_Defense_Spending_by_State_Report.pdf)http://www.defense.gov/Portals/1/Documents/pubs/FY2014_Defense_Spending_by_State_Report.pdf RANKS… in TOTAL defense spending $14.2 BILLION in total defense CONTRACT spending $11.8 BILLION

17. – BACKGROUND $5.9 MILLION AWARDED TO PA FOR A 2.5 YEAR TERM, WHICH INCLUDES: Analysis and mapping of Pennsylvania’s defense supply chain and workforce; On-the-ground assistance in five regions covering 39 of 67 counties statewide; Market diversification planning, implementation, and technical support services to assist defense-dependent businesses; Lay-of aversion programs, career ladder development, job clubs, and retraining for displaced workers to facilitate transition into other employment and promote entrepreneurship; International export development and foreign direct investment support to open up the global market to Pennsylvania defense suppliers; Innovation and commercialization activities to drive advances in product and/or process improvement; and Stakeholder engagement and data-driven strategic planning related to Pennsylvania’s defense economy. – PROJECT COMPONENTS

18. – LEVERAGING ROBUST PARTNERSHIPS AND PROGRAMS PREP is a statewide network of partners designed to work in concert to deliver vital business assistance across the state.

19. – INTERNATIONAL BUSINESS DEVELOPMENT

20. – BACKGROUND Foreign market research assistance – INTERNATIONAL BUSINESS DEVELOPMENT http://www.newpa.com/business-assistance/international/

21. Sue Suleski Director of Strategic Initiatives Pennsylvania Department of Community & Economic Development ssuleski@pa.gov | 717-214-5329 www.newpa.com – CONTACT INFORMATION

23. ​John Stovall Defense Industry Outreach Coordinator Military & Federal Affairs O: 410-767-3701 M: 443-388-6137 john.stovall@maryland.gov

24. Military in Maryland 20 military facilities offer boundless opportunities for education, innovation, R&D, simulation, testing and evaluation. Home to 12 major installations, including Aberdeen Proving Ground, Ft. Meade, Joint Base Andrews, Ft. Detrick, and NAS Patuxent River. 8,580 aerospace and defense businesses annually generate $32.82 billion. The $57.4 billion economic impact from military installations represents 17% of Maryland’s total output. https://www.youtube.com/watch?v=rIpMpGXrFqU

25. Economic Diversification of Maryland’s Defense Industries Office of Economic Adjustment (OEA) Grant Maryland is ranked in the top five among U.S. states for defense spending - this grant recognizes this dependence on defense and federal spending and responds to the need for strategic economic diversification. This project will examine the extent of the impact of defense dependency throughout the State and will find strategies to minimize negative impact on regional Maryland economies.

26. Economic Diversification of Maryland’s Defense Industries Task 1 Creation of a database that will provide an understanding of the small business dynamics in defense contracting and the impact defense budget cuts have on their community. This database will take the form of an interactive mapping tool which will help users better understand the depth and breadth of the state's reliance on DoD spending, as well as identify opportunities for growth and ​diversification.

27. Economic Diversification of Maryland’s Defense Industries Task 2: SWOT Analysis of Defense Communities An analysis that will lead to the identification of industry areas that are most conducive to economic diversification. Serve as a springboard for economic diversification strategic planning and implementation.

28. Economic Diversification of Maryland’s Defense Industries Task 3: Industry Cluster Analysis An analysis that will result from the two previous tasks and lead to a series of regional studies targeting industry clusters by region that are identified as strong growth markets for the community.

29. Southern Maryland Tech Transfer Pilot Program As several naval facilities and related defense jobs are heavily concentrated in Southern Maryland, the local economy is at risk of being adversely impacted with a decline in defense spending. In 2006, federal funding from OEA was used by the Tri-County Council for Southern Maryland to produce a strategic economic diversification plan for Southern Maryland. SMTTPP is intended to implement the recommendations of that plan and fund "forward focused" research to diversify the region's economy through the commercialization of defense technologies.​

30. Economic Diversification of Maryland’s Defense Industries Your Involvement is Critical to Success Visit our informational website to read more about the program. Sign up for our E-Newsletter. Participate in upcoming stakeholder meetings. http://commerce.maryland.gov/about/economic-diversification-of- defense-industries http://marylanddefensenetwork.org/