Expand Local Implementation of “Defense Production Zones” to Cluster Companies

Local Defense Production Zones allow towns, cities, and counties the authority to establish, design, and administer a unique defense zone ordinance to attract defense-related businesses. Incentives for companies include reduced permit fees, reduced gross receipts tax, and permit process reform and can last up to 20 years—a major competitive advantage for companies looking to expand in a state. Localities could use defense zones to provide incentives to CFRP composite manufacturers.


Nearly 10 percent of CFRP composite revenues come from defense. Key defense assets, such as the F-22 and F-35 fighter planes are made of CFRP composites. CFRP composites are also used in helicopters, helmets, body armor, and other military equipment. For decades, the Department of Defense (DoD) has sought to decrease fuel consumption, an objective that can be achieved through the expanded use of CFRP composites. DoD research facilities, such as the U.S. Army Aviation and Missile Research, Development and Engineering Center’s (AMRDEC) Advanced Composites Lab, are preparing for the wider transition to composite materials.


State economic development offices could prepare to meet the growing demand for CFRP composites from the Department of Defense by working with localities to expand the use of Defense Production Zones or other similar economic development zones. States such as Virginia have Defense Production Zones, while other states have similarly-designed economic development zones. Areas with large research institutions could be prioritized to expedite the transfer of cutting-edge ideas and technology to the marketplace. Expanding the use of Defense Production Zones would make states more attractive to composites companies that manufacture lightweight materials used in defense applications and bring with them skilled, middle-class manufacturing jobs.