While Wilbur and Orville Wright called the city of Dayton, OH home, the pair chose Kitty Hawk, NC as the proving ground for their flyer due to the strong winds and practical landscape. For that reason, North Carolina has “First in Flight” on its license plates today.

The state has the fourth-largest military population in the country, with 145,000 military personnel who reside at bases including the U.S. Army’s Fort Bragg and the United State Marine Corps’ Camp Lejeune. Yet, North Carolina currently lags behind other states in winning contracts from the U.S. Department of Defense (DoD), and ranks just 23rd in the country in terms of DoD spending that goes to businesses and research organizations.

In 2017, North Carolina had approximately $3.3 billion in defense contracts – while California had $35.2 billion, Virginia had $30.5 billion and Texas had $26.6 billion.

However, the Tar Heel State could become a hotbed of military tech in the coming years.

Some key factors include the fact that it has the lowest corporate income tax rate (2.5%) in the country; North Carolina was also ranked number one for the lowest state and tax burden in the U.S. by Ernst & Young and the Council on State Taxation. Moreover, it also has significantly lower labor costs in wages for aerospace workers – including engineers, avionics techs and aircraft mechanics –25% lower than traditional aerospace hubs including California and Washington.

North Carolina is also home to three Tier 1 research universities within 25 miles of one another including Duke University, North Carolina State University and University of North Carolina at Chapel Hill. In addition, the Old North State is home to 125 public and private colleges and universities.

Growth Potential

According to a recent study the state may be a small market for defense contracts, but North Carolina is among the fastest growing states in the nation for technology areas being targeted by the Department of Defense (DoD). The North Carolina Defense Asset Inventory and Target Industry Cluster Analysis was prepared by the Defense Alliance of North Carolina (DANC) and conducted by RTI International (RTI), a nonprofit research institute, and the North Carolina Department of Commerce.

The study was funded by the North Carolina Military Affairs Commission.

“Significant effort from now until late spring will be placed on: ensuring easy access to the information, developing and getting marketing materials out to the economic development community and positioning partners and especially companies for future success as we continue to grow this state’s defense economy,” said Paul Friday, executive director of DANC via a statement.

The researchers focused on six technology areas the DoD is prioritizing for future contracts which included: advanced manufacturing, autonomous systems, data and knowledge management, human performance, materials and power. The study found that over the past five years the Old North State ranked first in economic growth in data and knowledge management and human performance, and second in power and advanced manufacturing. In addition, North Carolina also has a high concentration of jobs in research and services related to those six technology areas compared with the national average.

The study found that between 2013 and 2018, the state ranks first in job growth in data and knowledge management with 37% job growth; and first in human performance with 36% job growth; and second in power and advanced manufacturing at 30% job growth.

“We often talk about how much the Research Triangle region has to offer in terms of technological innovation and expertise,” said Tim Gabel, executive vice president of social, statistical and environmental sciences at RTI and a member of the DANC Executive Board. “What’s exciting about these findings is that we have capabilities across our entire state that should create a path forward to bring more jobs and long-term investment to North Carolina.”

To implement the recommendations made in the report, DANC intends to create action plans to facilitate teams of economic development organizations, military support organizations, industry members and academic partners.

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Peter Suciu is a freelance writer who covers business technology and cyber security. He currently lives in Michigan and can be reached at petersuciu@gmail.com.