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New Reports Reveal Massachusetts Defense-Contract Work Contributed $20 Billion to Economy; Massachusetts Military Installations Had $13 Billion+ in Economic Impact

December 18, 2015


Kelsey Abbruzzese, MassDevelopment, 617-330-2086 & 617-448-9077

The Commonwealth’s defense-contract work supported more than 88,000 workers and contributed more than $20 billion to the Massachusetts economy, while Massachusetts military installations directly or indirectly supported more than 57,000 jobs with a total economic contribution of more than $13 billion in fiscal year 2013, according to two new University of Massachusetts Donahue Institute reports. Massachusetts companies exemplifying the crucial and beneficial connections between the defense sector and small businesses include Holyoke’s Meridian Industrial Group, which does machining for portable MRI equipment; Southampton’s J&E Precision Tool, which produces components for Black Hawk helicopters, periscopes, and F-22s and F-35s; and CPI Radant Technologies Division in Stow, which develops components for military aircraft.

“The Commonwealth’s six bases and defense-related firms continue to have a major impact on the Massachusetts economy, both in terms of jobs and dollars,” said Governor Baker. “Academia, business, and technology – three of the Commonwealth’s top sectors – play a role in our installations and defense contracts, helping this industry serve as an economic driver. We look forward to their continued growth and contribution to Massachusetts.”

The Massachusetts Military Asset and Security Strategy Task Force and MassDevelopment commissioned the reports. The first studied the impact of the Commonwealth’s six military installations – Barnes Air National Guard Base, the Fort Devens Reserve Forces Training Area, Hanscom Air Force Base, Joint Base Cape Cod, the U.S. Army Natick Soldier Systems Center, and Westover Air Reserve Base – and the Massachusetts Army National Guard and the U.S. Army Reserve.  

“Massachusetts is on the cutting edge in helping our military modernize,” Senator Warren said. “The work that goes on at military installations and by defense contractors across the Commonwealth is critical to our national security and to our state’s economy, and I am glad to partner with our local industry to make certain that Washington recognizes and supports the excellent work done here.”

“The Bay State is also the Brain State thanks in great part to the excellence of Massachusetts’s military bases,” said Senator Markey. “The Defense Department regularly turns to the Commonwealth for our top notch personnel and research facilities. Our military bases are not just critical to our national security but also the future of our economy. Across the world, our brave servicemen and women are able to execute their missions at the highest level due to technologies and equipment conceptualized, researched, developed and often manufactured in Massachusetts facilities.”  

The second report studied the defense industry’s contribution to the New England economy, finding that in fiscal year 2013, New England defense contracting generated nearly $49 billion and more than 218,000 jobs.

“Cutting-edge technological innovation is taking place around the country, but particularly so in Massachusetts where a unique ecosystem made up of military installations, world class academic institutions and high-tech companies is helping produce some of the most groundbreaking resources utilized by our armed forces,” said Congresswoman Tsongas. “The results are unmatched capabilities and benefits for our men and women in uniform, and a local economic driver and job creator. The report done by UMass recognized the immense, $13 billion economic impact Massachusetts military installations and related companies have had. The report highlighted the over 57,000 jobs in the Commonwealth have been created by partnering with the military including 29,000 active, reserve, and guard military personnel and 28,000 other jobs created by expenditures on base operations, construction and other contracts. Unlike any time in history, the military needs the best minds and talent to help them address modern threats and fiscal constraints. Massachusetts undoubtedly has that expertise. I am committed to working with Governor Baker and my colleagues at all levels of government to grow the public/private partnerships that provide widespread local economic benefits and have helped put Massachusetts on the map as a leader in next-generation technologies.” 

Other findings from the reports include: 

  • Massachusetts bases employed 29,230 active, reserve, and guard military and civilian personnel. Installation and personnel expenditures supported another 28,103 jobs. 
  • Base expenditures totaled $8 billion and generated another $5.2 billion in induced and economic activity for a total contribution of more than $13 billion. 
  • Massachusetts is the top defense contracting state in New England and ranked sixth nationally in contracts received.

Meridian Industrial Group’s role in the portable MRI machines and J&E’s contribution to various defense applications are typical of Massachusetts manufacturers, which often produce component parts that are critical to overall design. The MRIs are mainly used on the battlefield, and Meridian has worked with the U.S. Air Force and Navy on these machines, which appear on aircraft carriers, destroyers, and submarines. J&E helps produce parts for the Black Hawk helicopter housings, which detect incoming fire. CPI provides an example of the connection between the Massachusetts defense sector and its innovation economy, as the company’s product – a radome – supports Internet connectivity via satellite at high frequencies and data rates. The technology has its roots in defense applications and is now in use for WiFi on commercial airliners.  

“These reports quantify the extent to which Massachusetts military installations and defense companies serve as major economic engines thanks to the Commonwealth’s world-class workforce and top-notch technology companies,” said MassDevelopment President and CEO Marty Jones. “In addition to carrying out vital national-security missions, these bases and businesses power our innovation-based economy.” 

“Massachusetts, through its military installations, research, and industry, is a fundamental contributor to the overall capabilities and strength of the U.S. armed forces,” said UMass Donahue Institute Senior Research Manager Branner Stewart. “Military spending, in turn, is an important catalyst for the Commonwealth’s economy, providing high-quality jobs and supporting numerous businesses and industries.  The Commonwealth’s universities, laboratories, and advanced manufacturing abilities set Massachusetts apart as a leader in the defense sector and, together, work to ensure that the U.S. military remains at the highest level of expertise and readiness.”     

Housed within the Office of the Governor and supported by the Executive Office of Housing and Economic Development and MassDevelopment, the Massachusetts Military Asset and Security Strategy Task Force coordinates among the Commonwealth’s six military facilities to maximize their efficiency. 

In addition to helping to staff the Task Force, MassDevelopment, the state’s finance and development agency, works with businesses, nonprofits, financial institutions, and communities to stimulate economic growth across the Commonwealth. During FY2015, MassDevelopment financed or managed 294 projects generating investment of more than $2.5 billion in the Massachusetts economy. These projects are projected to create about 6,100 jobs and build or rehabilitate about 2,000 residential units.