EL SEGUNDO, Calif., March 31, 2014 /PRNewswire-USNewswire/ -- Global management consulting firm A.T. Kearney today released an original study on the essential role the aerospace industry plays in sustaining the California economy. The study finds that in 2012 aerospace companies manufacturing or providing aerospace-related services in California accounted for $62 billion in revenues, representing 21 percent of the U.S. aerospace market and 9 percent of the global market.
With research supported by the National Defense Industrial Association (Los Angeles Chapter) and the Aerospace & Defense Forum, the A.T. Kearney analysis also details how aerospace is a crucial component of California's economy, both as a significant source of high-paying jobs and as an incubator for technological innovation. It is one of California's largest industries, with annual revenues equal to agriculture and entertainment combined. Including the $38.8 billion in indirect revenues it feeds to adjacent industries, the industry's total economic impact is more than $100 billion.
"While we have always known that California's aerospace sector was a huge influencer in the state's sometimes turbulent economy, this report presents a quantitative analysis on what that impact actually is," said Randall Garber, partner, A.T. Kearney Public Sector & Defense Services. "When you have insight into what these companies mean in terms of taxes and employment, whether you're a state legislator or a regular citizen, you can see how important it is to protect this source of direct and indirect revenue."
The report's findings state that the industry accounts for 510,800 jobs in California—203,400 directly, including commercial, military, and civilian employment, and 307,400 in indirectly related industries such as finance, real estate, construction, and transportation. Regarding tax revenue, aerospace wages rate in the top 3 percent of all industries and generate $2.9 billion in California personal income tax revenue.
"This study is a testament to the need for California to enact meaningful regulatory reform and marketplace incentives to remain competitive in this industry," said Senator Steve Knight (R-Antelope Valley), chair of the Senate Select Committee on Defense and Aerospace. "California has been at the forefront of aerospace, and striving to successfully incorporate science, technology, engineering and math (STEM) into our school curriculum will also give us more of an edge."
According to the study, the aerospace industry has enjoyed tremendous success in the state, but competitive challenges exist, including high corporate and personal income taxes, a difficult regulatory environment and an aging skilled workforce. While recent state legislation is a step in the right direction, to grow its aerospace footprint California should proactively pursue competitive policies that encourage commercial investment as well as investments in STEM instruction for its students.
Please visit here to access a summary of the study.
To request the full study, please send an email to: CAaerostudy@atkearney.com
About A.T. Kearney
A.T. Kearney is a global team of forward-thinking partners that delivers immediate impact and growing advantage for its clients. We are passionate problem solvers who excel in collaborating across borders to co-create and realize elegantly simple, practical, and sustainable results. Since 1926, we have been trusted advisors on the most mission-critical issues to the world's leading organizations across all major industries and service sectors. A.T. Kearney has 58 offices located in major business centers across 40 countries.
To read more about A.T. Kearney's Aerospace & Defense Practice, please visit: http://www.atkearney.com/aerospace-defense
SOURCE A.T. Kearney