01 Overview

02 Talent Pipeline

03 Industry Ecosystem

04 Labor Analysis

05 Operating Cost Analysis

06 Quality of Life

Secure your future in Greater Phoenix with

Aerospace and Defense

A top hub in the nation for Aerospace and Defense.

Greater Phoenix is a top market in the nation to locate, relocate, or expand your aerospace and defense operations. In fact, the region’s aerospace and defense sector is one of the largest in the nation.

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Overview

Talent
Pipeline

Industry
Ecosystem

Labor
Analysis

Operating
Cost Analysis

Statutory
Incentives

Value Proposition

Large Existing Cluster

Greater Phoenix is composed of many of the largest A&D companies in the world. The emerging commercial space sector validates the market for aerospace R&D.

Local Innovation

Greater Phoenix is home to top company HQ’s like Honeywell Aerospace and AQST, and universities recognized globally for innovation.

Educated Workforce

Greater Phoenix is home to a highly specialized workforce with specialties in a variety of relevant fields. There are a variety of business operation types that equate to a flexible labor pool.

Exceptional Talent Pipeline

Greater Phoenix has over 1,900 graduates from relevant programs each year with more graduates in relevant college-level programs than competitor markets, including those with larger industry clusters

Competitive Operating Costs

Major competitor markets are up to 25% more expensive than Greater Phoenix. The state offers a number of quality incentives to further decrease operating costs for those in the aerospace and defense industry.

Below are total numbers of non-distance program completions at Greater Phoenix colleges and universities for aerospace, industrial, computer & software engineering; geographical, atmospheric, physical & Earth sciences; military technology systems design & maintenance; and air transportation programs in 2018.

Nationally Recognized Programs in Aerospace and Defence

K-12 Stem Initiatives

The Arizona STEM Network, led by the Science Foundation of Arizona, leads a number of initiatives and brings together educators of all levels to improve STEM education in the Arizona K- 12 system, improving the quality of Arizona’s talent pipeline in the long term. Among these is the HELIOS STEM Schools pilot program that develops a system to provide the infrastructure, resources and metrics needed to improve educational outcomes in STEM fields.

Location Quotient or LQ is a measure of market specialization in an industry achieved by comparing the share of that market’s employment in an industry to the national proportion of that industry’s employment. For example, Phoenix’s LQ of 2.15 indicates that the market has 115% higher concentration of the A&D cluster than the nation as a whole.

The figure below shows the magnitude and specialization of major markets’ workforce in the Aerospace & Defense cluster. As can be seen, Greater Phoenix has a large and highly concentrated workforce that outpaces aerospace hubs like San Diego and St. Louis.

For reference, the labor pool in each metro for relevant occupations in all industries has been provided below. It should be noted that several of these markets have large information technology sectors, which explains disproportionately larger counts of software developers and computer systems analysts.

Occupation	Phoenix	Los Angeles	San Diego	San Francisco	Seattle	St.Louis	Wichita
Software Developers, Applications	12,871	30,043	10,969	42,980	52,769	7,721	892
Computer Systems Analysts	9,672	18,830	5,669	14,637	13,722	6,956	521
Software Developers, Systems Software	7,655	22,813	8,220	16,911	15,134	3,694	365
Aircraft Mechanics and Service Technicians	4,256	5,934	4,872	2,953	6,285	1,936	1,282
Electrical Engineers	3,193	8,252	3,803	4,179	4,148	2,241	365
Mechanical Engineers	2,897	9,737	3,814	3,267	4,909	1,801	681
Computer Network Architects	2,275	5,142	1,496	3,802	3,347	1,489	137
Aerospace Engineers	2,073	4,456	1,842	1,921	5,486	604	1,869
Aerospace Engineering and Operations Technicians	719	435	922	490	413	70	353
Avionics Technicians	333	838	986	445	1,718	384	747
Atmospheric and Space Scientists	87	241	348	162	268	62	51
Total	46,032	106,720	42,941	91,747	108,198	26,957	7,263

The Annual Business Operating Cost Analysis has been prepared using the following parameters as an estimate for A&D product development in competitor markets. Component and custom analyses to match your company’s operations can be provided upon request.

Assumptions

$20,000,000 personal property investment
50,000 square foot Industrial Manufacturing, Lease
Utilities (per month):
- Electricity: 40W, 10,00KWh
- Water/Wastewater: 3,000cf, 5/8 meter
150 jobs (Bureau of Labor Statistics equivalent occupations)

Occupations	Employment
Aerospace Engineers	63
Software Developers, Applications	25
Software Developers, Systems Software	13
Computer Network Architects	12
Electrical Engineers	12
Mechanical Engineer	12
Computer Hardware Engineer	8
Computer Systems Analysts	5
Total	150

Operating Cost by Region

Source: Applied Economics Metrocomp Tool, November 2019

Statutory Incentives

Even with the highly competitive tax environment in Greater Phoenix and Arizona, there exist a number of tax incentives that can be utilized to mitigate operating costs. Incentives will depend on actual project parameters and varying program qualifications and requirements as determined by the Arizona Commerce Authority.

Quality Jobs Tax Credit

Quality Jobs provides tax credits to employers creating a minimum number of net new quality jobs and making a minimum capital investment in Arizona. The Quality Jobs Tax Credit offers up to $9,000 of Arizona income or premium tax credits over a three-year period for each net new quality job. The tax credit is equal to $3,000 per qualified employment position, employed for each full taxable year of continuous employment for three years. If the allowable tax credit exceeds the income or premium tax liability, any unused amount may be carried forward for up to five consecutive taxable years. Employers must cover 65% of employee health insurance premium costs. To receive additional information, please download our full research document.

Want to see a full list of companies in Greater Phoenix? Download the complete report.

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