Satellite, Aerospace Industries Major Boon to Maryland’s Economy

Maryland’s Gov. Martin O’Malley speaking at ATK in Beltsville, Md July 22, 2013. Image credit: Jay Baker

[Satellite TODAY 08-06-13] Perhaps best known for its Atlantic Ocean beaches, Appalachian mountains, world-class crab cakes and Baltimore Ravens Super Bowl champions, Maryland also has thriving satellite, aerospace and defense sectors, all of which serve as a major boon to the state’s economy and the intelligence community.

“Maryland’s aerospace and defense industry is a significant economic engine for our state, generating nearly $26 billion in economic activity annually and employing more than 145,000 people,” said Maryland Governor Martin O’Malley during an exclusive interview with SatelliteTODAY.com.

He said Maryland offers “a highly-skilled workforce,” and houses mission-critical federal facilities and military installations attractive for the industry. “The research being done in our labs, the technology being developed in our innovative companies, and the advanced manufacturing taking place in modern plants across Maryland all come together to advance the nation’s aviation, aerospace, space and satellite capabilities,” he said.

Agreeing with Gov. O’Malley during an exclusive interview with SatelliteTODAY.com, Rep. Dutch Ruppersberger notes that “Maryland’s highly educated workforce, research assets and proximity to some of aerospace technology’s heaviest users make it a leader in the satellite industry.” Ruppersberger serves as ranking member on the U.S. House Intelligence Committee and also represents Maryland’s 2nd Congressional District, which includes Aberdeen Proving Ground and the parts of Howard and Anne Arundel Counties, home to the National Security Agency (NSA). He said Maryland’s close proximity to the nation’s capital, “enables satellite companies to react to the needs of its largest customers almost instantly.”

Officials at satellite communications provider Hughes, based in Germantown, Md., agreed, noting the importance of Ft. Meade. “Cyber security is a major part of everything government does. All of those things make this area very important,” said Rajeev Gopal, senior director of Hughes’ Defense and Intelligence Systems.

Equally important to the company is the ability to attract top engineers. “Maryland gives us a strong base of engineering talent,” said Arunas Slekys, vice president of corporate of marketing at Hughes, which employs approximately 1,300 Marylanders. “We hire a lot of students from University of Maryland [College Park]. We’ve been here 40 odd years and we’ve taken advantage the facilities, infrastructure and talent pool Maryland has to offer,” Slekys said.

Dozens of Maryland companies such as Lockheed Martin, Hughes and ATK “are helping to set the course for the industry throughout the industry. Of course, this is a win-win situation because the industry is attracting the best and brightest, meaning more high-paying jobs and economic growth for Maryland,” Ruppersberger added.

And industry officials are taking notice. In 2011, Boeing decided to locate a new 32,000 sq-foot cyber engagement facility in Maryland “because of human capital [and the] quality of life,” said Dominick Murray, Maryland’s Secretary of the Department of Business & Economic Development, during an exclusive interview with SatelliteTODAY.com.

More recently, on July 22, Gov. O’Malley visited aerospace and products supplier, ATK, in Beltsville, Md. where 950 Marylanders work across its three offices, Murray said. O’Malley’s visit included a tour of ATK’s integrated thermal systems (ITS) plant and Robotic Rendezvous and Proximity Operations (RPO) Lab. The ITS manufacturing facility annually produces more than 4,000 heat dissipation pipes and satellite panel structures along with other thermal control hardware for domestic and international space programs. In addition, ATK’s satellites are operating in orbit 24/7 for the U.S. Air Force and NASA, ATK officials said.

Maryland officials said during interviews with SatelliteTODAY.com that the state is ripe for new opportunities for the satellite and aerospace industries. Noting that satellite, defense and aerospace have deep roots on Maryland soil, Murray said “the industry includes Department of Defense related activities such as biodefense, cybersecurity, avionics, informatics and ordnance and weapons testing.”

Speaking of Maryland soil, Slekys said Hughes was actually started by five people in a Rockville, Md. garage back in 1971 and since has gone through many acquisitions. “Five guys had a dream. They really wanted to build a satellite communications business. Eventually they developed and invented commercial VSAT. Today, Hughes is still a dominant satellite network provider, both technology and service,” he said.

Noting that Maryland is also home NASA’s Goddard Space Flight Center, Murray said Maryland’s aerospace and defense areas also secure $7.5 billion in federal contracts, a significant portion of which are awarded to Hughes’ Defense and Intelligence Systems.

According to Murray, the satellite industry plays an integral role in Maryland’s overall aerospace investment strategy. “Because of the types of things that Maryland companies do, particularly in building sensors, systems, payloads, etc., these have applicability in both aero and space so it fits very well into our Aerospace industry. Anyone taking a look at the list of the leading commercial satellite and satellite services companies in the U.S. will see that there is a significant concentration of these companies in the state and particularly around Montgomery County.”

And Maryland’s space sector encompasses a wide range of areas beyond intelligence and defense, Murray said, noting that satellite weather monitoring, commercial satellite manufacturing and servicing, refueling, space station resupply, green science, telecommunications, and more are all a vibrant part of Maryland’s economy Murray said.

In June, at the Paris Airshow, Maryland had a booth and invited eight state companies to participate, giving them access to more than 150,000 professional visitors and more than 2,100 exhibitors from 50 plus countries. “The governor met with senior executives of ATK, Boeing, Labinol, Lockheed, among other companies,” Murray said.

In July, Maryland Aerospace’s President and CEO Steve Fujikawa announced that the U.S. Army Space and Missile Defense Command headquartered in Alabama had selected his company to design and build two advanced Kestrel Eye battlefield reconnaissance satellites.

While Maryland doesn’t currently have a tax credit program targeted specifically at the satellite industry, Murray said since much of the satellite industry is technology related, several of Maryland’s other tax credit programs are applicable to the satellite sector. “Some companies developing technologies to secure communications with satellites or using satellites may also benefit from the new Cybersecurity Tax Credit program, passed during the 2013 Maryland legislative session,” Murray said.

      The $3 million cybersecurity investment incentive tax credit provides a refundable tax credit to qualified Maryland cybersecurity companies that seek and secure capital from an in-state or out-of-state investor. Murray also noted that Maryland offers a research & development tax credit program. Despite these credits, Intelsat recently decided to move its office to Virginia after receiving special incentives from the state. Officials at Intelsat said they were also attracted to Virginia because of the development of the Silver Line, a 23-mile extension of the D.C. metro which is expected to open in 2014. Maryland too has plans to expand a portion of the D.C. metro in a newly proposed Purple Line, but it has faced development challenges.

According to Murray, the Maryland space sector includes nearly 16,000 jobs and between 2007 and 2011, employment in the space sector grew significantly. “Maryland aerospace products and parts manufacturing grew 16.8 percent,” he said noting that electronic instrument manufacturing, including search, detection and navigation, guidance also grew 14.1 percent.

Other sectors saw significant gains as well, including Maryland computer systems design services, seeing an increase of 24.6 percent, and research and development in physical, engineering, and life sciences at an increase of 11.1 percent, according to Murray.

While welcoming additional businesses to take advantage of Maryland’s benefits, Murray said he wasn’t surprised by the growth numbers of the state’s satellite industry. “Marylanders have a great work ethic, our quality of life is great and we have competitive incentive programs,” he added.