Federal Defense Industrial Policy,Firm Strategy,and Regional Conversion Initiatives in Four American Aerospace Regions

This article examines divergent experiences among U.S. defense regions in the post-cold war era, highlighting the interplay between shifting federal policies, large defense firm investment and location decisions, and adjustment policies implemented by regional actors. Case studies of four defense aerospace centers reveal that economic impacts were highly uneven across major defense regions. Regional conversion and diversification efforts mitigated some adjustment costs when local actors overcame interjurisdictional conflict and vested leadership in a single agency or government department. Communities that had experienced structural downturns in previous periods were better able to draw on prior knowledge, pull actors together, and plan more strategically. While the scale of local initiatives has not been large enough to have measurable impacts on aggregate regional economic performance, conversion programs did succeed in overcoming specific market failures and improved outcomes at the level of firms and individual workers.