Jim Richter wears more than one hat in Metro Detroit's entrepreneurial ecosystem, and he regularly throws those hats into the regional economy's growing defense sector.
Richter is the CEO of Gravikor, a Delphi spin-out that is working to commercialize welding technology that is both lighter and stronger than traditional welding. It aims to take this technology to refurbishing military vehicles, such as the Humvee. These sorts of military vehicles are constantly overweight, which causes everything from lower fuel economy to increased wear and tear on parts. The Ann Arbor-based startup's technology is promising to make these Humvees lighter and give them the ability to add or subtract armor easily.
Richter is also the president of the Michigan Research Institute. The non-profit research incubator, which is based in Ann Arbor, works to help bring more cutting-edge technology into the marketplace. Often that means creating startups that help create more jobs. The defense and aerospace sectors are both areas the Michigan Research Institute has helped create new, local businesses in.
Richter answered a handful of questions about Metro Detroit's growing defense sector means to the local economy and where the best opportunities for it are.
Southeast Michigan has enjoyed a good bit of entrepreneurial success transforming university technology into high-priced start-up acquisitions in fields like bio-tech. Can tech transfer in the defense industry present the same sort of opportunities?
Most definitely. While there continues to be consolidation with large defense contractors, the opportunities for small companies that have patented technologies that can address unmet needs for the military will continue to draw interest. We have found that program managers representing weapon systems platforms as well as research and development groups within the military are willing to consider technological advancements that can address present and future needs. This type of visibility can help small technology driven companies become attractive partners or acquisition targets for the large prime contractors.
Metro Detroit has been beating the drum to diversify its economy outside of automotive for more than a decade now. Is taking on more defense work the low-hanging fruit of achieving this diversification?
That was the case over the past few years when the automotive sector was experiencing difficulty. The current environment has shifted in that the automotive sector is enjoying significant growth opportunities while we have been seeing a dramatic decrease in spending for defense systems. If anything, companies in Southeastern Michigan have developed a presence in both markets allowing them to lessen the effect of being in only one market segment. We are also seeing where advanced technologies developed for the automotive sector are now finding their way much more quickly into defense programs. A good example of this is utilizing racing technology for military applications.
A lot of local companies, especially manufacturers, have seized on the work available to them in defense and aerospace over the last 5-10 years. How much more opportunity is there for them to take on more defense contracts or have those opportunities largely matured?
Once again, the decrease in defense spending will lessen these opportunities over the next few years, especially when it comes to some of the programs that historically have involved large purchases of military vehicles. Commercial aerospace however continues to grow and there are many local companies that have invested in becoming qualified suppliers that is now providing growth opportunities.
Jobs are not created equally. A job in manufacturing will likely pay more and have better benefits than a job at a big-box retailer. Is it fair to say that the average position created in the defense industry will be more similar in compensation to those created in automotive?
Since many of the jobs in automotive require the same skill sets and education as those in military components and systems manufacture, it would be reasonable that similar compensation would prevail. Overall, companies that develop and utilize advanced technologies will require workers that have advanced degrees that will command premium compensation packages. Southeastern Michigan is still one of the premier research and development centers for vehicle technology in the world, and as such should be a driver for the creation of new high tech companies and the type of premium jobs that are associated with them.
All Photos by David Lewinski Photography