Despite the current negative news surrounding sequestration, Charleston’s defense sector hit USA Today headlines as a model for how the nation may cope with looming industry cuts.
Home to the U.S. Coast Guard, U.S. Department of State, Space and Naval Warfare Systems Atlantic (SPAWAR), Lockheed Martin, BAE Systems, General Dynamics/Force Protection and Joint Base Charleston, our region also hosts more than 250 defense contractors—all dependent on defense work, until now.
In last week’s article, “Charleston’s economy girds for leaner defense budgets,” USA Today’s economics correspondent, Tim Mullaney, explains that Charleston’s key to fighting sequestration is diversification—for both our target industries and the defense contractors themselves.
Mullaney goes on to report how the Charleston region is expanding its existing industries such as aerospace, information technology and computer security, renewable/wind energy and biomedicine in addition to housing major players such as Boeing, SPAWAR Atlantic, Medical University of South Carolina and the Clemson Energy Campus (CURI).
Charleston contractors featured in the article, UEC Electronics and Geocent, showcase how the region’s highly skilled defense workforce has allowed contractors to shift from government based contracts to the private sector. For example, UEC Electronics is pending on a contract with Boeing to produce Dreamliner parts. Similarly, Geocent, who makes applications for government security and the Veterans Administration, is using the same technology to develop consumer and company mobile apps.
Last month, our industry leaders were also profiled in National Defense Magazine’s piece, “Charleston Contractors Show Optimism in Face of Budget Cuts” as being “prepared for looming austerity,” while the editor’s letter in Security Products stated: “An interesting lesson learned while in Charleston, is that most of the companies represented at the summit are comfortable wearing many different hats.” Both pieces note the innovative applications of regional contractors such as Scientific Research Corporation (SRC), Science Applications International Corporation (SAIC), SPARC and more.
In the USA Today article, Mullaney points out that this is not the first time Charleston has faced an economic challenge head on. The region experienced a similar threat in the nineties when BRAC closed the Navy base—resulting in an unemployment rise from 2.6% to 7.1% from 1990-1993.
Mullaney’s piece goes on to show how Charleston has added nearly 18,000 jobs in the past three years and now sits in the top 15% of U.S. metros for economic vitality, according to Moody’s analytics. “The outlook for Charleston is pretty good” remarks director of regional economics at Moody’s Analytics, Steve Cochrane. Twenty years later, Charleston’s current unemployment rate of 6.3%, stands well below the national rate, and its economy is diversified.