Cities, counties and states offer grants, tax incentives, land, facilities and workforce training to convince space companies to move.
“California will still and forever remain the startup capital of the world just because of the venture capital ecosystem,” said Sean Casey, former Silicon Valley Space Center managing director and co-founder of the New York Space Alliance. “You’ll always pull them in based on Silicon Valley, but can you hold onto them?”
In many cases, the answer is no. Companies leave California to open offices and production facilities in states with plentiful engineering talent, proximity to government customers and a lower cost of living.
Like Alabama, Colorado, Florida, New Mexico, Texas and Virginia, California benefits from its extensive U.S. government space infrastructure and the billions of dollars in federal funds that flow into government space programs. Unlike the other states, California has no state commission supporting the sector.
“California’s aerospace industry boasts a gross domestic product exceeding that of the state’s film and television and agricultural industries combined, but does not have a state commission like other major industries in the state,” said California Assemblyman Al Muratsuchi, chairman of the Select Committee on Aerospace.
Other states have adopted space strategies that play to their strengths.
Space Florida welcomes new companies with financial packages tailored to their unique needs and offers facilities near the NASA Kennedy Space Center and Cape Canaveral Space Force Station.
SpaceX and Blue Origin are developing and launching rockets in Texas, a state known for less stringent regulation, generous relocation incentives and a lower cost of living than California, where SpaceX has its headquarters, or Washington, where Blue Origin is based.
The Michigan Aerospace Manufacturers Association wants to attract firms developing space and terrestrial technologies for 5G communications networks as part of a campaign that highlights the important role 5G networks will play in linking autonomous cars produced by state automakers.
The New York Space Alliance sees the state’s financial sector as a major resource.
“The way space gets financed is the existential question,” said Joseph Fargnoli, New York Space Alliance co-founder. “We want to get the institutional investors in New York conversant on the new space economy.”
Education is a key focus of many state and local organizations wooing space companies. Through visits with elected officials, citizens underscore the role space companies play in local economies, and the high salaries space jobs provide. In colorful brochures for companies considering a move, states tout their educated workforce, top-notch infrastructure and unique attributes.
The California Space Authority played a similar role before the nonprofit ceased operations in 2011. A bill before the California legislature would establish a California Aerospace Commission.
“California needs to maintain its competitive advantage in the face of increased competition from other states, changes to the industry and shifting aerospace priorities,” Muratsuchi, the bill’s author and primary sponsor, said by email.
This article originally appeared in the February 2022 issue of SpaceNews magazine.
In this series
- State Fight: A coast-to-coast battle to bring home the space jobs
- Virginia is for rockets
- Space sector is humming in Huntsville, Alabama
- Colorado wages international campaign in space sector
- SpaceX brings business to Brownsville, Texas
- New Mexico’s growing reputation as a space state
- Michigan economic plan emphasizes satellite communications
- Shoring up Florida’s Space Coast