Ambassador Event: The Future of Aerospace & Defense

Greater Phoenix’s strengths and opportunities for development within the aerospace, aviation and FutureG sectors 

One of Greater Phoenix’s longest-standing economic pillars is aerospace and defense. The sector’s emergence during World War II, construction of Luke Air Force Base and opening of Honeywell’s first Phoenix facility put Greater Phoenix on the upward trajectory in the 1940s, and in the decades since, the region’s importance in the national A&D landscape has continued to grow.

As such, it’s no surprise that the future of aerospace and defense is taking place in our backyard.

A trio of local leaders joined the Greater Phoenix Economic Council (GPEC) for a panel discussion on the future of aerospace and defense, adjacent to the release of a GPEC report on the industry.

The panelists were:

• Stephen Houghton, CEO, Swarmbotics AI
• Marti McCurdy, Owner and CEO, Spirit Electronics
• Kevin Suits, Vice President, Product Management & Innovation, Honeywell Aerospace
• Moderator: Christine Mackay, President & CEO, GPEC

With the region’s deep legacy in A&D and advances in autonomous technology and manufacturing, there are opportunities to be at the leading edge of the next generation of aerospace and aviation — if Greater Phoenix makes the right investments today.

“Greater Phoenix is a collaborative and innovative market, not a place where you have to know the right people or go to the right university. We really take that as a point of pride,” Mackay said. “Between infrastructure, supply network, workforce, research and investment, we have opportunities to evolve our ecosystem into its next era.”

Strengths of Greater Phoenix’s aerospace and defense ecosystem

With global manufacturers, major research universities, a network of military installations, land availability, and contracts with the Department of Defense (DoD), Greater Phoenix boasts one of the country’s most complete A&D ecosystems.

The manufacturing base includes companies in airframe and engine manufacturing, machine shops, small-arms and ordinance production, air transportation and airport operations, and flight training, with suppliers in precision coating, castings, fabrication, and other specialized services.

Educational institutions partner with industry leaders to build the talent base of the future. Arizona State University (ASU), University of Arizona (U of A), Grand Canyon University (GCU) and the Maricopa County Community Colleges District (MCCCD) are knit tightly within the community. MCCCD’s Future48 Workforce Accelerator includes a first-of-its-kind A&D-focused fab in partnership with Honeywell Aerospace, Boeing and the Arizona Commerce Authority.

Internship programs through companies like Honeywell Aerospace, Boeing and General Dynamics give high schoolers and college students hands-on experience, training them for the current and future needs of industry. Additionally, ASU and U of A are among the select few universities capable of building space-ready NASA hardware.

The Department of Defense signs billions of dollars in contracts annually with Arizona and its institutions, with more than $19.5 billion in FY25 alone. ASU was awarded $10 million by the DoD to establish a Center of Excellence in Future Generation Wireless Technology in 2023.

“You have all the pieces that are here today, and you have a very willing and capable university network. You have a very willing and capable government sector that is easy to work with and are doing events like this, and thinking about ways to expand and make Arizona an even bigger hub for A&D,” Suits said.

Growth opportunities for A&D in Greater Phoenix

Within Greater Phoenix’s strengths lie opportunities for even greater growth.

Universities have strong research partnerships with institutions like Honeywell Aerospace, Blue Origin and the U.S. Space Force, but shifting from individual agreements to a standard, reusable research and testing framework could help increase access. The workforce development and talent pipeline could also be improved with better interconnectivity, McCurdy said.

“There has to be a way to connect all of the companies in this space,” she said. “Talking to the universities … they’re taking this input and creating this curriculum to be very specific.”

There has been significant growth in the Greater Phoenix startup community over the last decade, with the region reaching $1 billion in venture capital in seven of the last eight years, but increased access to resources for A&D companies would go a long way in strengthening the early-stage ecosystem.

“Anything that does not increase my burn in the earlier stages so that I can advance the product without having to go with expensive capital [would be beneficial],” Houghton, whose company Swarmbotics AI develops low-cost autonomous ground vehicles for defense and commercial application.

The state’s current incentive programs are centered around tax credits, for which startups often cannot qualify. One area that could grant opportunity is the Arizona Space Commission’s Space Exploration and Aeronautics Research Fund, which has a board but has not received an appropriation.

“We have to continue to evaluate, do we have the right incentives to attract the startups, to keep them alive? Because we need each other,” Suits said. “Big conglomerates need startups. We need their speed, their agility, their new innovations. And they need us as access as a prime and access to the governments and the defense sector.”

Additionally, Arizona can make testing ranges more accessible, with under-used airfields serving as ready-made opportunities. By limiting these hurdles, more companies can improve efficiency throughout the testing processes.

Arizona also has one of the largest fleets of F-35 fighters in the country, which McCurdy, whose Spirit Electronics company manufactures microelectronics components for the A&D industry, said has presented opportunity but been stalled at the legislative level.

“The primes behind that have wanted to come here with simulators and create an environment,” McCurdy said. “If we had all of us gathered together, and we had these government delegations here, and we could go to D.C. to get on Capitol Hill.”

What’s on the horizon?

By elevating innovative companies and startups, Greater Phoenix can make strides in quantum computing, AI, autonomous systems, drones, air mobility, space systems and more.

ASU’s grant from the DoD will help lead FutureG toward next-generation 6G wireless technologies and beyond for more reliable coverage, greater efficiency and better security.

“Arizona’s advantage is that it can be a number of things. We don’t have to be a one-trick pony,” Suits said. “We actually have a number of assets and a number of reasons why Arizona should be the A&D hub.”

A variety of economic development programs and experience in the autonomous vehicle space have positioned Greater Phoenix for success in developing new technologies. The state’s autonomous vehicle testing dates back to 2015, and the Arizona Department of Transportation is planning infrastructure for advanced air mobility, including the development of drone corridors. The Qualified Facilities Refundable Tax Credit, Military Reuse Zones and Foreign Trade Zones provide additional support for companies within the ecosystem.

Swarmbotics utilized the network of experience within the region from AV companies like Waymo and Cruise.

“The value of having some of the supply chain co-located where you’re starting is immense,” Houghton said. “When you’re moving things 10,000 miles away, all kinds of supply chain disruptions happen... Building that ecosystem, we’ve had great success with finding wire harness providers, metal working, custom parts, and that is incredibly important whenever you’re just trying to get from 0 to 1 on the prototype.”

“We can create statewide or even regional-level legislation, shared infrastructure and policy change that helps everyone,” Suits said. “We have to get away from doing it at this specific [location] … if we can solve things in a broader way that opens the door for many, many of the companies here in Arizona and will attract others to the state of Arizona as well.”