U.S. SPACE INDUSTRY DEEP DIVE

Transcription

1 U.S. SPACE INDUSTRY DEEP DIVE A COLLABORATION BETWEEN THE DOC AND THE USAF, NASA, AND NRO FINAL DATASET FINDINGS NDIA NSS Policy and Security Symposium June 26, 2013 Brad Botwin Director, Industrial Base Studies Office of Technology Evaluation

2 2 Office of Technology Evaluation Industry Assessments Background Under the Defense Production Act of 1950 and Executive Order 13603, ability to survey and assess: Economic health and competitiveness Defense capabilities and readiness Enable industry and government agencies to: Share data and collaborate in order to ensure a healthy and competitive industrial base Monitor trends and benchmark industry performance Raise awareness of diminishing manufacturing and technological capabilities

3 U.S. Space Industry Deep Dive Assessment Background Partnership with the U.S. Air Force, National Aeronautics and Space Administration, and the National Reconnaissance Office. The principle goal is to gain an understanding of the intricate supply chain network supporting the development, production, and sustainment of products and services across the defense, intelligence, civil, and commercial space sectors. Objectives: a) Map the space industrial base supply chain in unprecedented detail; b) Identify interdependencies between respondents, suppliers, customers, and USG agencies; c) Benchmark trends in business practices, competitiveness issues, financial health, etc. across many tiers of the industrial base; and d) Share data with USG stakeholders to better inform strategic planning, targeted outreach, and collaborative problem resolution. 3

4 4 Space Industry Survey Topics (Covers ) Financials Research & Development Capital Expenditures Employment Mergers & Acquisitions Sales Areas of Potential USG Assistance for Respondents Impacts of Decreased USG Demand 205 USG Space Programs Suppliers (U.S. & non-u.s.) Customers (U.S. & non-u.s.) Top Competitors (U.S. & non-u.s.) Codes: DUNS, CAGE, NAICS Capacity Utilization and Inventory Rare Earth Elements and Counterfeiting Issues Challenges to Competitiveness This presentation only scratches the surface of our data.

5 5 Overview of Respondents Respondents by Type of Organization Commercial Companies 3,585 Universities 125 Non-Profit Organizations 49 U.S. Government Agencies 21 Total 3,780 62% of respondents are small businesses, as defined by the Small Business Administration Only 52% of respondents identified themselves as providing products/services to the space sector. Respondents by Average Annual Net Sales ( ) Very Small (Less than $10M) Small ($10 50M) Medium ($50 250M) Large ($250M 1B) Very Large (Greater than $1B) 1, No Sales 306

6 6 60% Involvement in Market Segments 50% 52% 50% 48% 40% % of Respondents 30% 20% 35% 33% 32% 29% 28% 27% 10% 0% Space Aircraft Electronics Energy C4ISR Missiles Ships Ground Vehicles (Military) Space Healthcare

7 7 Structure of the DOC Survey Created 16 general segments comprised of 360 individual products & services. Product and Service Segments: A. Spacecraft & Launch Vehicles B. Propulsion Systems & Fuels C. Navigation & Control D. Communications Systems E. Space Survivability, Environmental Control/Monitoring, and Life Support F. Payload Instruments & Measurement Tools G. Ground Systems H. Non-Earth Based Surface Systems I. Power Sources & Energy Storage J. Electronic Equipment K. Computer Hardware & Robotics L. Software M. Materials, Structures, and Mechanical Systems N. Manufacturing Tools & Specialty Equipment O. Services P. Research & Development Respondents detail their critical suppliers, customers, and involvement in over 205 USG space programs.

8 Top 15 Product/Service Areas Provided by Respondents Excluding Services and R&D 8 M48 - Precision machined parts 222 J8 - Connectors 196 L7 - Modeling, analysis, and visualization software I11 - Wires and cables (electrical) K1 - Computers and data processing equipment M2 - Plates, sheets, etc. D1 - Antennas/antenna systems M54 - Other space-related materials, structures, or mechanical systems M1 - Bars and rods M40 - Fasteners (screws, nuts, bolts, clips, brackets, rivets, etc.) M3 - Pipes and tubes J34 - Other space-related electronic equipment J5 - Circuit boards J17 - Integrated circuits/semiconductors (excluding ASICs) J12 - Fiber optics (conductors, cables, switches, assemblies, etc.) # of Respondents

9 9 Single and Sole Source Suppliers* 2,200+ products/ services provided by sole source suppliers. Sole Source Supplier 11% 7,361 unique critical suppliers. Single Source Supplier 21% Not Single or Sole Supplier 61% Not Sure 7% * As a percentage of total products/services provided.

10 10 Top 15 Sole Source Product and Service Areas Provided by Suppliers J17 - Integrated circuits/semiconductors (excluding ASICs) 71 M54 - Other space-related materials, structures, or mechanical systems 62 J34 - Other space-related electronic equipment M14 - Adhesives M15 - Chemicals O14 - Machining services (includes cutting, boring, grinding, etc.) 49 D1 - Antennas/antenna systems J8 - Connectors J5 - Circuit boards M21 - Substrates K1 - Computers and data processing equipment M8 - Composite materials M6 - Carbon fiber materials M2 - Plates, sheets, etc F36 - Other space-related instruments or sensors # of Sole Source Mentions

11 Location of Non-U.S. Based Space-Related Customers* 11 Canada 14% 3,934 unique customers. Other 32% France 11% United Kingdom 9% South Korea 3% China 3% Spain 3% Italy 4% India 5% Japan 8% Germany 8% * As a percentage of the total number products and services provided.

12 12 Location of Non-U.S. Based Competitors* Competitors identified from 41 countries. Other 17% France 18% 2,832 unique competitors. Belgium 2% Israel 2% Netherlands 2% China 4% Switzerland 4% Germany 18% Canada 7% United Kingdom 11% Japan 15% * As a percentage of the total number of mentions.

13 Respondents Providing Space-Related Support to Multiple USG Agencies* # of Respondents % of respondents provide spacerelated support to three or more USG agencies >10 # of USG Agencies Supported 32 * A combination of space-related support and both responses.

14 14 Potential Impacts of a Sudden Decrease in USG Space-Related Demand Pursuit of other U.S. customers 1152 Pursuit of new product/service lines Loss of personnel with key skills Reduced participation in U.S. Government contracts Decreased capital expenditures Decreased research & development expenditures Disproportionate reduction in sales revenue Increased product/service costs Reduction or elimination of particular product lines Pursuit of other non-u.s. customers Loss of organization viability or solvency 602 Elimination of all participation in U.S. Government contracts 443 Sale of key production equipment 276 Other # of Respondents

15 15 Net Change in Space-Related Customer Demand for Respondents Business Lines ( ) Inspection and Quality Control 24 Distribution/Brokerage/Reseller/Retail Manufacturing systems development and management Testing/evaluation/validation Raw materials provider Material preparation (casting, forming, molding, forging, etc.) Maintenance/aftermarket/repair/refurbishing services Information Technology (software, hardware, installation) Material finishing (machining, coating, plating, heat treating, etc.) Manufacturing (including assembly) Professional services (legal, accounting, consulting, etc.) Other services not specified Integration (product, systems integration) Product and design engineering (tooling, new processes, etc.) Research and development Net Change in # of Respondents (Increases in Demand Decreases in Demand)

16 $1,600 $1,400 Total Sales vs. Space-Related Sales ( ) $1,420.0 $1, % 9.0% $1, % $1,200 $1, % $ Billions $1,000 $800 $600 $ % 4.8% 4.0% 4.3% 6.0% 5.0% 4.0% 3.0% Space as % of Total Sales 2.0% $200 $0 $52.7 $57.8 $57.1 $ Total Sales Space-Related Sales Space-Related Sales as % of Total Sales 1.0% 0.0%

17 $60 $50 Total Space-Related Sales by Location ( ) $53.0 $51.4 $ $56.1 $40 $ Billions $30 $20 $10 $4.6 $4.8 $5.7 $6.8 $ Non-U.S. U.S.

18 18 Exposure to Space-Related Sales* Between 0-5% 1,140 Respondents Between 25-95% 341 Respondents Between 5-25% 463 Respondents Greater than 95% 190 Respondents Need to understand the potential impact of USG policy decisions on respondents, space-related or otherwise. * 1,646 respondents declared that they had no space-related sales.

19 Full Time Employees Dependence on Current USG Space Programs 19 2,500,000 2,064,890 2,138,095 2,225,796 2,276, % increase 2,000,000 1,500,000 1,000, respondents declared they were dependent on current USG space programs for continued viability. 500, , , , , % decrease Not Dependent on USG Space Programs Dependent on USG Space Programs

20 Age Range of Engineers, Scientists, and R&D Staff* 100 Thousands of FTEs < >60 U.S. Citizens Non-U.S. Citizens * Excluding universities

21 Unfilled Vacancies for Skilled Positions Respondents identified how many unfilled vacancies they currently have for the following positions: Engineers, Scientists, and R&D Staff Production Line Workers Testing Operators, Quality Control, & Support Technicians 1,234 respondents (33 percent) currently have 24,836 vacancies for these positions. 21 Why are these vacancies unfilled? Vacancies by State 1. Lack of proper skills 2. Difficulty attracting workers to manufacturing Other 29% California 22% 3. Geographic difficulties Ohio 3% Texas 10% 4. Instability of demand Tennessee 3% Michigan 3% Colorado 9% Maryland 4% Virginia 5% Massachusetts 6% Pennsylvania 6%

22 22 BRINGING IT TOGETHER: Cross-Cutting Data for More Effective Analysis

23 23 Shared Government Risk NASA Respondents were determined to be financially high/severe risk.* USAF Navy 200 Sample of four USG agencies and their shared supplier risk. Cross-cutting relationships can be viewed by product or program. 69 NRO * Based on a series of financial risk measures, taking into account profitability, liquidity, leverage, and others.

24 Linking Respondent, Supplier, and Customer data allows creation of detailed supply chain maps for USG programs. Supply Chain Mapping: Mars Science Laboratory (MSL) Curiosity Rover 24 Customer NASA Jet Propulsion Laboratory (at center) Approx. six tiers of the supply chain are represented

25 25 Mars Science Laboratory (MSL) Curiosity Rover - Detailed View This level of detail in supply chain mapping can only be achieved with an underlying structure that threads sections together the Product and Service List. DOC is expanding the use of the data: Map multiple programs at once to uncover interdependencies Identify key nodes in the supply chain Add financial health metrics to the map View the maps geographically And more. Partner organizations can tailor these maps to their specific needs.

26 26 Supply Chain Mapping: USAF GPS III Satellite 462 entities in supply chain map. 43 respondents indicated potential loss of viability/solvency with a sudden decrease in USG demand. 12 respondents are financially high/severe risk. GPS III respondents support over 236 USG space programs. Most prominently: GOES-R (NOAA) AEHF (USAF) MUOS (U.S. Navy) SBIRS (USAF) Other GPS Systems

27 Strategic Environment: Understand the Collective Problem 27 Top 10 Issues and Challenges Affecting Respondents Long-Term Viability Domestic Competition Labor Costs Proposed Cuts to USG Space Programs Foreign Competition Variability of Demand Healthcare Taxes Government Acquisition Process Skills Retention Government Regulatory Burden We have 2,000+ comments from respondents on these topics. Issues More Commonly Affecting Larger Respondents Domestic Competition Foreign Competition Variability of Demand Export Controls Issues More Commonly Affecting Smaller Respondents Healthcare Taxes Labor Costs Difficulty Presenting Innovative Products to the USG Barriers to Entry in Commercial Space Market

28 Respondents Interested in Available USG Assistance Programs and Services Program # of Respondents Business development 715 R&D programs 527 SBIR and STTR contracts 492 Global export opportunities 443 Training Opportunities 416 Export licensing (ITAR/EAR) 405 Manufacturing technology development 395 Financing 353 Government procurement guidelines and e commerce 346 Marketing assessment skills 329 Product/service development 314 Energy and environmentally conscious manufacturing 213 Patents and trademarks 196 Country Commercial Guides 60 Leverage existing USG resources to take pressure off USG space community and provide directed assistance to survey respondents. 28

29 29 BIS/OTE Contacts Brad Botwin Director, Industrial Base Studies (202) Christopher Nelson Trade and Industry Analyst (202) Jason Bolton Trade and Industry Analyst (202) Under Defense Industrial Base Programs. For further results from this assessment, see: