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Arizona becoming a not-so-quiet leader in technology manufacturing

You’ve no doubt seen the headlines about Apple coming to Arizona as a partner in a glass factory that will supply its products, and Tesla considering the state as home for its massive battery-manufacturing plant. If both projects come online, they would joinIntel and Honeywell, which already have had success here. But if you think we’re on the map only because of the big names, you only know part of the story. Technology manufacturing is a collective effort in our state.

The 2013 edition of TechAmerica Cybertstates ranks Arizona among the top 10 states for manufacturing employment in semiconductor, space and defense, photonics and high technology in general. Further, semiconductor and defense manufacturing make up more than half of Arizona exports as each also ranks fourth in the nation for its respective sector of manufacturing. They were among the manufactured goods that made up more than 80 percent of Arizona’s $18.4 billion in exports for 2012.

The news about Arizona is getting out. More than 25 percent of jobs at U.S. subsidiaries in Arizona are in manufacturing, according to the Organization for International Investment, which represents U.S. operations of many of the world’s leading global companies that insource millions of American jobs. (Insourcing is the practice of companies making their products in-house.) Among the group’s Arizona members is Marvell Semiconductors in Chandler, also a member of the Arizona Technology Council.

The state also is catching on with resourcing, which involves finding and providing the material and people needed for particular projects. One of the most active resourcing firms in the state earlier this week listed tech openings that included project manager, project analyst, information security, Java/J2EE and system support analyst – all high-paying positions.

It seemed not too long ago that observers were writing the obituary for the American manufacturer. What a difference a recession makes. With climbing international transportation costs, a supply chain closer to home and wages in Asia rising, producing items here makes more business sense. Plus, we have the educational institutions and training programs that teach the specialized skills required in high-tech manufacturing.

Don’t forget energy costs. In the February survey of energy costs by U.S. Energy Information Administration, manufacturers had good reason to consider Arizona. While industrial customers were paying an average 13.27 cents per kilowatt-hour in New England those in Arizona were paying 6.50 cents in kilowatt-hour. Gov. Jan Brewer and the Legislature also have played a role. In the past five years, lawmakers have lowered the corporate income tax and improved the research and development tax credit.

If you’re interested in taking advantage of this new climate in Arizona, your timing is right with the launch of Arizona’s Manufacturing Extension Partnership Center, created through a partnership between the Arizona Commerce Authority (ACA) and the National Institute of Technology and Standards. According to the ACA, the goal is to become the central resource for technical assistance and manufacturing for small and medium-sized Arizona firms. Services include guidance on growing an in-state supply chain and subcontracting in addition to technology acceleration.

This all means we’re making one more thing: history.

From the Phoenix Business Journal


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