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Follow the defense spending for employment and higher salaries

Marketplace Staff Jan 6, 2011

Follow the defense spending for employment and higher salaries

Marketplace Staff Jan 6, 2011


Kai Ryssdal: Defense Secretary Robert Gates said today he’s going to cut $78 billion from his budget over the next five years. Gates told the House Armed Services Committee the Pentagon’s going to lower troop levels and cancel or scale back some weapons systems. That’ll be good news for the national budget deficit, but perhaps it’s going to hurt some local bottom lines.

Tanya Ott reports from WBHM.

Tanya Ott: It’s been a busy year for business in Huntsville, Ala. Tommy Battle is the mayor.

Tommy Battle: We were counting up the other day — we had 159 ribbon cuttings in this community this past year. I don’t think any other community in the U.S. had that.

Many of those ribbon cuttings have ties to bio-tech and engineering. Huntsville is known for NASA’s Marshall Space Flight Center. But it’s also home to the Army’s Redstone Arsenal and the nation’s second largest research park.

Casey Borch: Military spending is one of the most recession-proof sectors, not only because we’re fighting a war, but we have the constant need to improve our technology.

That’s Casey Borch. He’s a sociologist at the University of Alabama at Birmingham. His research shows that states with high levels of defense spending have lower unemployment and higher family incomes. But Borch says the type of military spending makes a difference. Towns that revolve around military bases don’t do as well as cities like Huntsville, where defense contracting drives the economy.

To get a first hand look, I went to CFD Research Corporation, where Sameer Singhal shows me a video of their latest project.

Sound of beetle flapping its wings

What you see is a really big live beetle. Researchers hope to implant a tiny “bio-battery” inside the beetle. The battery would turn sugar, like the beetle’s own glucose, directly into electrical energy.

Sameer Singhal: And you can use that energy to power cameras or sensors and essentially make unmanned aerial vehicles where it can fly into a war zone or a burning building ahead of a human. It can signal back if there’s dangerous chemicals in that area.

If it works, the bio-battery wouldn’t just power an insect-borg; it could also help charge human pacemakers.

CFD’s executive vice president Sami Hopshi says this mix of military contracts and technology aimed at the general public is key to his company and the city’s success. It ensures a steady stream of engineers and scientists.

Sami Hopshi: There is a wealth of talent here in Huntsville. It’s easy to recruit talent and the customer is just next door.

And the riches trickle down. Sociologist Casey Borch says for every one military or defense contracting job there are two-and-a-half spin-off jobs.

Jobs like Jenny Lanes’. She works for the Huntsville Museum of Art, which recently opened an $8 million expansion. Lane says it was surprisingly easy to raise the money, even with the difficult economy.

Jenny Lane: You live here and you’re almost kind of cushioned from part of the horror, I guess, that everybody else was seeing. I don’t think we got hit as bad as the rest of the country and for that I’m incredibly thankful.

And sociologist Casey Borch says that’s why politicians lobby so hard for military spending.

In Birmingham, Ala., I’m Tanya Ott for Marketplace.

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