Economic impact of Navy’s SPAWAR program

SPAWAR is the Navy's technology nerve center for communications. Its workers are engineers, scientists and mathematicians – all highly educated – and average pay is $105,000. The Navy is woven into the fabric of San Diego; the public sees its ships and planes on a daily basis. When the ships head out to sea, or return to port, we are there. What we don't see, or hear about much, is Spawar because we never get to see what it actually does. Rear Admiral Patrick Brady says Spawar's mission is quite different from the rest of the Navy.

“We don't fly or build airplanes, or ships, or submarines, or construct new shore facilities. Our focus is more technical.”

Technical, as in cyber security.

“Spawar is responsible for the information communications networks connecting the Navy's sea, land, air and cyber forces.”

It's 10,000 employees are located in fleet-concentrated areas around the world, but it's headquarters is in San Diego.

“In fact, about half of our nearly 10,000 military and civilian workforce is located right here in San Diego.”

That's one reason why Spawar is a hidden asset. It brought $1.8 billion into San Diego last year.

“40% of the overall $1.8 billion relates to the personnel levels of Spawar,” stated economist Dr. Lynn Reaser at Point Loma Nazarene University. “Another smaller fraction, the remaining part, reflects the expenditures for maintenance repair, but also tourism.”

Reaser authored the Impact Study. There's a multiplier effect to that $1.8 billion that reaches out to the supply chain.

“If so if you roll all of this together, Spawar is responsible directly or indirectly about 19,000 jobs in San Diego County – that's about $1.6 billion of total income.”

And $2.5 billion in gross regional product. Spawar doled out $1.1 billion in contracts to San Diego companies last year and 1,400 of them went to small businesses. It's technology is being transferred to the private sector.

“You've seen in San Diego new companies formed as a result of that transfer, or existing companies being able to expand as that technology affects their businesses.”

Bottom line: SPAWAR is important to the Navy and to San Diego. Still, Pentagon pressures are likely to reduce Spawar's income and output by 2.5% in 2015. Beyond that, downward pressures may come from another round of base closings and sequestration.