Innovative Sectors - Innovative Economic Development

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The commercial space industry might seem like a narrow business attraction niche, but its location requirements underscore what a range of growing, innovative sectors are increasingly seeking from economic developers. And it’s much more than talent and incentives.

Industry and economic development leaders talked about how to attract the commercial space industry during an interesting panel discussion at last month’s Texas Economic Development Council conference in Austin, TX. According to the panelists, the must-haves include lots of buffer space and a stable regulatory and liability environment.

Beyond that, panelists discussed several features that will be familiar to economic developers charged with developing and attracting technology-oriented, innovative businesses:

  • Companies seek to be part of an ecosystem or cluster. There is high value in locating near customers and suppliers as the industry develops.
  • The ecosystem needs an anchor, which might be a company or a specialized facility or institution.
  • Research partnerships are valuable. Firefly Space Systems is collaborating with the Texas Advanced Computing Center at the University of Texas. Space Florida offers several R&D programs, including the Florida Space Research Program.
  • Investment in unique facilities and infrastructure (an altitude tester was cited as an example) that can be used by multiple companies can attract firms. Midland, TX recently approved a rocket engine test stand facility that will be owned by the Midland International Air and Space Port. Space Florida can provide infrastructure funding for improvements within the Spaceports territory.
  • Financing and public private partnerships show support and provide meaningful capital assistance. The Texas Spaceport Trust Fund makes funding available to develop infrastructure for spaceport development. Space Florida also provides a variety of sophisticated financing tools to support companies.
  • Traditional financial incentives still matter. Cedar Park, TX put together a $1.2m package of incentives and employment grants to attract Firefly. SpaceX received $13m from the Spaceport Trust Fund, $2.3m from the Texas Enterprise Fund, and $5m from the Greater Brownsville Incentives Corporation.

The examples here are hardly exhaustive. Many other states are active in the sector. Our purpose here is to highlight how this sector exemplifies trends we see in economic development and the relative role financial incentives play among the full range of economic development programs and services that matter to businesses.

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