For decades, Southern Arizona’s defense economy has been defined by familiar names and institutions: Raytheon, Davis-Monthan Air Force Base, Fort Huachuca and a steady stream of federal contracts supporting missile systems, military intelligence and aerospace manufacturing.
Those pillars remain firmly in place. But industry leaders, economic-development officials and researchers say the region is entering a new phase — one focused not only on building defense products, but also on developing, testing and commercializing the technologies that could shape the military’s future.
Artificial intelligence, hypersonic weapons, advanced communications, cybersecurity, space systems and quantum technologies are increasingly becoming part of Southern Arizona’s defense conversation. At the same time, local leaders are working to attract startups and emerging defense-technology firms while strengthening partnerships among government, academia and industry.
“One of the biggest changes is in the expansion beyond traditional missile manufacturing,” said Mignonne Hollis, executive director of the Arizona Regional Economic Development Foundation. “Raytheon is scaling its local workforce to support new work on hypersonic and artificial intelligence-supported weaponry.”
Pima County officials say the industry’s evolution is being driven not only by new technologies but also by the growing scale of projects under consideration.
“The biggest changes right now seem to be the scope and size of potential projects,” said Carmine DeBonis Jr., deputy county administrator for Pima County. “We are seeing an increase in the convergence of traditional aerospace and defense operations with the newer frontier of space and space exploration related to technological advances.”
The shift is occurring against a backdrop of growing federal interest in technologies that can deliver faster decision-making, greater resilience and strategic advantage in an increasingly complex global environment.
“The University of Arizona has always had tremendous strengths that matter to national security; space systems, astronomy, optics, engineering and hypersonics, cybersecurity and materials science,” said retired Air Force Maj. Gen. Tom Kunkel, chief operating officer of the Kyl Institute for National Security at the University of Arizona. “What’s changed is that we’re becoming much more intentional about connecting those strengths to national-security missions and national priorities.”
That effort extends beyond academic research, too.
For years, universities were often viewed primarily as sources of talent and scientific discovery. Increasingly, however, they are also expected to help move technologies from the laboratory into commercial applications and operational military use.
“One of the biggest challenges in the innovation ecosystem is moving promising technologies from the laboratory into operational use,” Kunkel said. “Success isn’t measured by the number of research papers published. It’s measured by whether a discovery becomes a capability that serves the warfighter, a company that creates jobs, or a technology that addresses an important national-security challenge.”
The University of Arizona is positioning itself as a key part of that process. Through organizations such as the Kyl Institute for National Security and Tech Launch Arizona, university leaders are working to connect researchers with defense agencies, established contractors, startups and investors.
That university connection is increasingly becoming a recruiting tool in its own right.
“We are seeing startup interest due to the University of Arizona’s specialties in optics, photonics, space and life sciences,” DeBonis said. “We are becoming more attractive to startup companies that want to be near global companies like Raytheon and top-20 research institutions like the University of Arizona.”
He added that technologies emerging from the University of Arizona Center for Innovation and Tech Launch Arizona are helping create a larger ecosystem for startup growth.
While major defense contractors such as Raytheon and Northrop Grumman continue to anchor the region’s aerospace and defense sector, economic-development leaders say emerging companies are increasingly drawn to Southern Arizona’s mix of research assets, military infrastructure and established industry partners.
“We are seeing startup interest,” DeBonis said, pointing to the region’s strengths in optics, photonics, space-related technologies and university-driven innovation.
Hollis sees the same trend.
“Startup companies are definitely establishing a more prominent foothold in Southern Arizona,” she said. “I don’t believe this is an isolated case at all.”
Recent interest in Southern Arizona from companies such as Castelion, the hypersonics startup founded by former SpaceX employees, has drawn attention to the region’s efforts to attract next-generation defense firms. Although Castelion was ultimately reported to be pursuing a project in New Mexico, DeBonis said its interest reflected broader trends affecting the aerospace and defense sector.
“Projects like Castelion reflect the general nature of interest in this industry sector,” he said. “This was a significantly sized project, with variable components related to raising capital, leveraging new technology and looking for university partnerships.”
Those characteristics, he added, are increasingly common among companies evaluating Southern Arizona.
Hollis said Southern Arizona’s established aerospace and defense ecosystem, combined with Arizona’s business-friendly environment, continues to make the region attractive to emerging technology firms.
The region’s advantages extend beyond its existing employers.
Southern Arizona offers access to major military installations, including Davis-Monthan Air Force Base and Fort Huachuca, along with a deep pool of workers possessing military experience and security clearances. It also provides something increasingly difficult to find elsewhere: large expanses of uncongested airspace suitable for testing advanced technologies.
“We are extremely competitive as a region,” DeBonis said. “The clustering of similar tech, military and contractors with decades of experience, in conjunction with Davis-Monthan Air Force Base, the University of Arizona, and our region’s global partnerships in optics and photonics industry areas are significant reasons why we are getting attention.”
Sarah Pacheco, assistant economic development director for the Arizona Regional Economic Development Foundation, said defense companies have shown growing interest in facilities such as Bisbee-Douglas International Airport and Benson Municipal Airport because of their access to testing environments and proximity to military assets.
“If you look at a map of commercial air traffic, you would see open space above Cochise County because we don’t have flights coming overhead,” Pacheco said. “Fort Huachuca has a good swath of restricted airspace above it, allowing for good testing areas as far as defense companies go.”
The region also sits within a broader defense-testing corridor that includes Yuma Proving Ground, Fort Huachuca and White Sands Missile Range in neighboring New Mexico.
“We kind of make a nice area of testing that can happen across this whole southern region between New Mexico and southern Arizona,” Pacheco said.
Equally important is workforce.
Pacheco noted that Fort Huachuca produces a steady stream of military personnel transitioning into civilian careers, many of whom already possess security clearances and highly specialized skills.
“Something that’s attractive for these defense companies is that we have people leaving the military at Fort Huachuca who are ready to step into a civilian job,” she said. “They can start tomorrow and know how to do the job.”
Industry leaders say Southern Arizona’s future may depend on how effectively it combines those assets with emerging technologies and entrepreneurial activity. One advantage, Hollis said, is the increasingly collaborative relationship between large defense contractors and smaller innovators.
“Companies like Raytheon frequently invest in providing startups with access to cutting-edge technology and an established supply chain to move their products to market,” she said.
Rather than replacing traditional defense contractors, many emerging companies are expected to complement them, bringing new technologies into an ecosystem already equipped with manufacturing capacity, government relationships and experienced talent.
That combination has some observers optimistic about Southern Arizona’s long-term prospects.
“I think Southern Arizona has an opportunity to become one of the country’s leading hubs for defense innovation over the next decade,” Kunkel said.
He argues that the region already possesses many of the ingredients needed to compete nationally: research capabilities, military installations, a strong defense-industrial base and a growing network of entrepreneurs and technology developers.
“The future of defense innovation will be driven by places that can bring together technology, talent, industry, government and mission focus,” Kunkel said. “Southern Arizona already has those ingredients.”
DeBonis believes those strengths will continue to fuel growth over the coming decade.
“In five to 10 years, Southern Arizona will continue to be recognized as a hub for aerospace and defense due to the expansion of existing companies, growing startup opportunities, and the general advancement of technologies,” he said. “All signs currently point to continued and sustainable growth in this area.”
For a region long known for building the nation’s defense systems, the next chapter may increasingly involve inventing them as well.
