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Than Dollars Alone More than Dollars Alone: The Economic and Security Significance of Hanscom Air Force Base and the Natick Soldier Systems Center September, 2004 Prepared by DONAHUE INSTITUTE CENTER FOR POLICY Michael D. Goodman, Ph.D. ANALYSIS UNIVERSITY OF MASSACHUSETTS Director of Economic and Public DARTMOUTH Policy Research Kathleen Modzelewski Clyde Barrow, Ph.D. Project Coordinator Director, Center for Policy Analysis Phil Primack Chancellor Professor of Policy Writer and Researcher Studies 2 Massachusetts Defense Technology Initiative (MassDTI) Working to Preserve and Expand the Missions of Hanscom AFB and Natick Soldier Systems Center MassDTI is a coordinated public-private partnership created by the Massachusetts High Technology Council, Inc. to successfully influence the Base Realignment and Closure (BRAC) 2005 process. Its primary objective is to preserve and enhance the missions of the state’s two largest and most valuable defense technology centers, Hanscom Air Force Base (Bedford, MA) and the U.S. Army Soldier Systems Center (Natick, MA). MassDTI has argued that having both Hanscom and Natick Labs as centerpieces of Massachusetts's premier defense technology cluster - home to world class academic, scientific, research and development centers - is vital to our nation's defense system as well as the region's economy. On September 8, MassDTI unveiled a comprehensive plan to expand the mission of Hanscom Air Force Base – designed to make the base more competitive in the eyes the Department of Defense through the BRAC 2005 and beyond. Led by co-chairs Senator Edward Kennedy and Governor Mitt Romney – and the state’s Congressional delegation – and supported by leaders in the technology and academic community, MassDTI is working to ensure that these bases’ unique characteristics and their contribution to military value are fully recognized and carefully assessed during the BRAC 2005 process. Leadership Committee • U.S. Senator Edward Kennedy (Co-chair) • Jimmy Dishner (US Air Force Brig. • Steve Kaufman (President & CEO, Avici General, retired) Systems) • Governor Mitt Romney (Co-chair) • Robert Nesbit (Senior Vice President, The • Claude Canizares (Associate Provost, MIT • U.S. Senator John Kerry MITRE Corporation) and MIT Lincoln Labs) • U.S. Rep. Michael Capuano • Jack Wilson (President, University of • Kevin Casey (Government Affairs, Harvard • U.S. Rep. Barney Frank Massachusetts) University) • U.S. Rep. Edward Markey • Craig Coy (Chief Executive Officer, • James Brett (President, New England • MassPort) Council) U.S. Rep. James McGovern • • • U.S. Rep. Marty Meehan Virginia Allan (Executive Director, Natick Rick Lord (President & CEO, Associated Soldier Systems Center Business Industries of Massachusetts) • U.S. Rep. John Olver Alliance) • Paul Guzzi (President & CEO, Greater • U.S. Rep. John Tierney • Bill Flanagan (Vice President & General Boston Chamber of Commerce) Manager, Titan Corp.) • Christopher Anderson (President, Mass. • Joyce Plotkin (President, Massachusetts High Technology Council) • Paul Gudonis (President & CEO, Centra Software Council Software) • Michael Ruettgers (Chairman, EMC) • David Briggs (Director, MIT Lincoln Labs) • William Walsh (President & CEO, • James Regan (Chairman, President & • Nancy Nelson (Superintendent, Minute Sippican) CEO, Dynamics Research Corp.) Man National Historical Park) • Ed Franklin (Vice President, Raytheon • David Barrett, MD (Chairman & CEO, • George Noel (Vice President, IBEW Local Company) Lahey Clinic) #1505) • Secretary Sheila Widnall (MIT and • Suzanne Daniels (Vice President, BAE Systems – Lexington) former Secretary, US Air Force) • MassDTI Executive Director: Alan J. Macdonald 3 Table of Contents Table of Contents Page # Executive Summary ....................................................................................................................................5 Full Report: More Than Dollars Alone ......................................................................................................7 Part I: Economic Impact Analysis Summary ............................................................................................9 Part II: Qualitative Analysis ....................................................................................................................12 Sidebar #1: The Natick SSC Stamp of Approval: Credibility and contracts Sidebar #2: Hanscom AFB and MITRE: Linked by history, innovation, and success Appendix A: Background on Hanscom AFB and Natick SSC ....................................................................i Appendix B: Definitions ..........................................................................................................................iv Appendix C: Economic Impacts of Hanscom AFB and Natick SSC ........................................................vii Contact Information: Michael D. Goodman, Ph.D. Clyde Barrow, Ph.D. Director, Economic and Public Policy Research Director, Center for Policy Analysis Office of the President Chancellor Professor of Policy Studies University of Massachusetts Donahue Institute University of Massachusetts Dartmouth One Beacon Street, 26th Floor 285 Old Westport Road Boston, MA 02108 North Dartmouth, MA 02747 tel: 617.287.7040 tel: 508.999.8943 [email protected] [email protected] 4 Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive SummaryExecutive • Executive Summary Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Summary • Executive Executive Summary Hanscom Air Force Base and Natick Soldier Systems Center are major contributors to the economy of the Commonwealth and its regions. Directly and indirectly, these two military installations are responsible for more than 33,000 jobs and a total payroll of nearly $2 billion. The overall direct, indirect and induced eco- nomic activity generated by the operational and procurement activities of Hanscom AFB and Natick SSC exceeds $3.2 billion. Significantly, much of this activity involves technology and other innovative activities that are critically important to the state economy, with an impact felt in cities and towns and economic sec- tors across the state. Overall Impact on Massachusetts Economy Hanscom AFB and Natick SSC: Economic Impact Summary Chart Federal FY03 Hanscom AFB Natick Labs Grand Total Employment (total jobs) Direct 4,147 1,254 5,401 Indirect1 9,989 320 10,309 Induced2 16,084 1,384 17,468 Total Employment Impact on MA 30,220 2,958 33,178 Payroll (in millions of dollars) Direct3 342 86 428 Indirect 709 19 728 Induced 670 58 728 Total 1,721 163 1,884 Procurement and Services Contracts (in millions of dollars) Total Contracts 3,200 558 3,758 Overall Impact on the Massachusetts Economy (in millions of dollars of output generated) Direct 342 86 428 Indirect 1,077 33 1,110 Induced 1,571 135 1,706 Total 2,990 254 3,244 1 Receiving procurement and service contracts 2 Employment generated by consumer spending of those employed by the installation and its vendors 3 Based on information provided by each installation 4 Based on data from the Directorate for Information Operations and Reports (DIOR) of the DOD 6 More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone • More than dollars Alone
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