CREC Seeks Contractor to develop a Defense Supply Chain Economic Growth Analysis, Web Tool, and Instructional MaterialSeptember 5, 2018
CREC is working with partners in Texas to mitigate the impact of defense spending adjustments and budget cuts on the state economy by identifying and assisting affected businesses, creating analyses to aid economic planning for affected regions, and facilitating high-impact entrepreneurship and technology acceleration activities in those regions. Texas enjoys a diversified economy, but relies significantly on defense expenditures, especially in certain sectors. In addition, there is a natural synergy between small, innovative companies and large prime contractors that is underdeveloped in most of Texas.
CREC seeks the assistance of a well-qualified contractor to assist with developing a Defense Supply Chain Economic Growth Analysis, Web Tool and Instructional Material. CREC’s Phase I work in Texas utilized a time-series dataset to track the growth patterns of all business establishments (i.e. individual business locations) across Texas, within the Texas defense industry, and within targeted defense industry segments and target cities. Important findings emerged from this study. In Texas’ defense industry, 10 percent of businesses are High-Growers, adding an average of 41.6 jobs each, compared with only 5 percent High-Growers among all other industries that added just 15 jobs each. Defense industry High-Growers expanded employment by 13,264 jobs in total, compared to a net loss of 7,114 jobs among the other 90 percent of defense businesses. Additionally, Defense industry Sustained-Growers expanded jobs by 200 percent and sales by 878 percent causing their sales-per-employee to nearly double. Given the significance of the results showing that a select few companies are models for a more robust and resilient defense supply-chain, it is important to better understand the drivers of this success.
In a follow-up phase to this research, CREC will seek to develop a Defense Supplier Growth Diagnostic, based on a thorough data analysis and assessment process, specifically aimed at Texas defense supply-chain manufacturers that will encompass the special challenges that these firms face and their potential for high or sustained economic growth.