1. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. U.S. SPACE INDUSTRY ‘DEEP DIVE’ A C OLLABORATION B ETWEEN THE DOC AND THE USAF, NASA, AND NRO F INAL D ATASET F INDINGS Brad Botwin Director, Industrial Base Studies AIAA: Engineering Global Space Leadership with STEM September 10, 2013 1

2. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. U.S. Space Industry ‘Deep Dive’ Assessment - Background Partnership with the U.S. Air Force, National Aeronautics and Space Administration, and the National Reconnaissance Office. The principle goal is to gain an understanding of the intricate supply chain network supporting the development, production, and sustainment of products and services across the defense, intelligence, civil, and commercial space sectors. Mandatory data collection authority under the Defense Production Act of 1950. Objectives: a) Map the space industrial base supply chain in unprecedented detail; b) Identify interdependencies between respondents, suppliers, customers, and USG agencies; c) Benchmark trends in business practices, competitiveness issues, financial health, etc. across many tiers of the industrial base; and d) Share data with USG stakeholders to better inform strategic planning, targeted outreach, and collaborative problem resolution. 2

3. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Survey Topics (Covers 2009-2012) Financials Research & Development Capital Expenditures Employment Mergers & Acquisitions Sales Areas of Potential USG assistance for Respondents Impacts of decreased USG demand 205 USG Space Programs Suppliers (U.S. & non-U.S.) Customers (U.S. & non-U.S.) Top competitors (U.S. & non-U.S.) Codes: DUNS, CAGE, NAICS, Inventory Rare Earth Elements and Counterfeiting Issues Challenges to Competitiveness This presentation only scratches the surface of our data. 3

4. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Respondents by Type of Organization Commercial Companies 3,585 Universities125 Non-Profit Organizations 49 U.S. Government Agencies 21 Total3,780 Overview of Respondents Respondents by Average Annual Net Sales (2009-2012) Very Small (Less than $10M) 1,648 Small ($10 – 50M) 929 Medium ($50 – 250M) 498 Large ($250M – 1B) 234 Very Large (Greater than $1B) 165 No Sales306 62% of respondents are small businesses, as defined by the Small Business Administration 4 611 respondents declared that they were dependent on current USG space programs for their continued viability.

5. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. 5

6. 6 * Commercial organizations only

7. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Current Workforce and STEM-Related Issues in the Space Industrial Base 7 I. Fluctuations in Engineers, Scientists, and R&D Staff II. Aging workforce III. Lack of proper skills/qualifications IV. Geographic issues V. Others…

8. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue I: Fluctuations in Engineers, Scientists, and R&D Staff Very Large respondents constituted the majority of decreases in employment for those dependent on current USG space programs. 838 respondents decreased their engineers, scientists, and R&D staff from 2009-2012. 2009-2012 Change in Engineers, Scientists, and R&D Staff: Universities: +9,958 Small businesses: +4,762 Respondents that worked on Space Shuttle/Constellation: -7,955 Respondents with no space-related sales: +13,788 Respondents with >35% space-related sales: -6,307 8

9. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue II: Aging Workforce * Excluding universities 9

10. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue II: Aging Workforce (cont.) * Based on 2,841 respondents that provided data, excluding universities. 32% of respondents have 50%+ of these FTEs over the age of 50. 10

11. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue II: Aging Workforce (cont.) Aging workforce issues are of particular concern to smaller respondents. Larger respondents are attracting a greater portion of the limited supply of young engineers, scientists, and R&D staff. 11 Respondent Size % of Respondents with 50%+ of Engineers, Scientists, R&D Staff Over 50 Very Small42% Small28% Medium21% Large15% Very Large17%

12. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue III: Lack of Proper Skills/Qualifications Respondents cited lack of proper skills/qualifications as the most prominent issue. Within their explanations, respondents cited particular difficulty finding qualified engineers, machinists, and programmers/developers. 12 Respondents identified how many unfilled vacancies they currently have for the following positions: Engineers, Scientists, and R&D Staff Production Line Workers Testing Operators, Quality Control, & Support Technicians 1,234 respondents (33 percent) currently have 24,836 vacancies for these positions.

13. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue III: Lack of Proper Skills/Qualifications (cont.) Sample Comments: “Difficulty in finding fully qualified, experienced candidates in specific areas of mechanical and electrical engineering” – Small company. “Due to the skill set required for our employees, there have been times it has been difficult to find them. Therefore, we have had to hire individuals that are not US citizens and require sponsorship” – Medium company. “Difficulty is mostly in finding engineers/scientists/R&D staff with the right combination of aerospace skills, software development experience, security clearances, with ability to be ‘customer-facing’” – Large company. 13

14. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue IV: Geographic Issues 92 respondents specifically cited geographic issues as the reason they are having difficulty filling vacancies for skilled positions. Based on the number of unfilled vacancies, the top five state locations are Tennessee, California, Pennsylvania, Texas, and Colorado. 36 percent of these vacancies were with very large-sized companies; 21 percent were with large-sized companies. Geographic issues primarily relate to: a) Difficulty finding qualified and/or experienced workers within a specific area; and b) Inability to find workers willing to re-locate to a specific area. 14

15. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Issue IV: Geographic Issues (cont.) Sample Comments: “The manufacturing location of the company is not a desirable place to live for some candidates” – Medium company. “Many of our available skilled positions are located in production facilities that are in remote rural areas. It is difficult to find candidates that are qualified for these positions that are willing to relocate to these locations” – Large company. “Geographic locations of manufacturing facilities limit the talent pool. Qualifications of candidates in these remote locations are not to standard for technical requirements” – Large company. 15

16. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. Other Workforce/STEM-Related Issues Lack of experience in areas of the workforce Competition for employees Citizenship issues Security clearances More information will be available on this topic and others in our final reports. 16

17. Source: U.S. Department of Commerce, Bureau of Industry and Security, U.S. Space Industry Deep Dive Assessment, September 2013. BIS/OTE Contacts Brad Botwin Director, Industrial Base Studies (202) 482-4060 brad.botwin@bis.doc.gov Christopher Nelson Trade and Industry Analyst (202) 482-4727 christopher.nelson@bis.doc.gov Jason Bolton Trade and Industry Analyst (202) 482-5936 jason.bolton@bis.doc.gov http://www.bis.doc.gov/DIB Find us at Booth #103. For further results from this assessment, see: www.bis.doc.gov/SpaceDeepDiveResults www.bis.doc.gov/SpaceDeepDiveResults 17