Some Regional Development Issues in Defense Program Shifts

The pattern of U.S. defense expenditure has reinforced certain industrial and urban development shifts in the nation, and by accelerating the growth of certain urban areas, has created local situations of great vulnerability. The shift to California has changed the industry mix in the State, raised the defense industry complex to the principal export industry of the State, produced new location patterns within the State, and concentrated a disproportionately high number of scientists and technicians in California. Under conditions of rapid and sizable defense expenditure reduction, California would face serious problems of reduced demand for its exports. But reduction in aggregate demand would also be accompanied by severe shrinkage in demand for certain skills. Most offset programs proposed for the nation would not alleviate the prospective condition of surplus technicians in selected California areas; further, some locational 'stickiness' of these technicians is expected. One offset program now being proposed by California space industries — development of a federally assisted New Town building program — is examined in some detail. The program in several aspects promises favorable offsets to the peculiar problems of defense contracting, though the social priorities of the program may be dubious.