Closing Bell - Manifest Space: Space Advocacy with AIA CEO Eric Fanning 12/28/23

Episode Date: December 28, 2023

As commercial space has taken off in the 21st century, so too has popular interest in. As demand for talent rises, advocacy organizations like the Aerospace Industries Association are focused on converting that interest into a bigger talent pipeline. CEO Eric Fanning joins Morgan Brennan from the Reagan National Defense Forum to discuss space policy, national security concerns, and education.

As commercial space has taken off, so too has popular interest in it. Converting that interest into a bigger pipeline of future talent is something Aerospace Industries Association CEO Eric Fanning is very focused on accomplishing. We've got to think about investing, I think, more in the educational system and broadening the opportunities that are available for kids at an early age. We've got to start young to have that big part of the funnel as big as possible. Then we have to do things that excite kids to pursue STEM. AIA is the top advocacy organization for the broader U.S. aerospace and defense industry, representing more than 320 companies ranging from the biggest prime

contractors to small family-owned businesses. Prior to AIA, Fanning served as the U.S. Army Secretary under the Obama administration and held senior appointments in all three military departments and the Office of the Secretary of Defense. On this episode, which was taped at the Reagan National Defense Forum in early December, we discuss space policy, national security concerns, and education. I'm Morgan Brennan, and this is Manifest Space. Joining me now, Eric Banning, head of the Aerospace Industries Association and former Secretary of the Army, among other roles. It's so great to speak with you for the podcast. There's so much

we could talk about, but one of the areas of your jurisdiction is space specifically. You did just come off of a meeting of the National Space Council. I guess walk me through some of the headlines. Yeah, absolutely. So the National Space Council, which is the senior government officials chaired by the vice president, has an external equivalent, the user advisory group. That's people from academia, former space officials, people from industry. And we had a three-hour public meeting today where all the subcommittees briefed out their findings and recommendations. And it's really an exciting time for space, a challenging time, too, because there's so

much more activity taking place up there. But you have a national security component where a domain that we didn't think of as a threat-based domain, we're trying to catch up for, make sure that we are protecting our assets, but also dealing with our adversaries and being able to deter our adversaries. But there's so much interesting commercial and exploratory things happening. And that's what's, I think, most exciting because we need to motivate the next generation of people to go into this, to create whatever it is we're going to do next. And there's nothing that excites kids, in particular to go into STEM as much as the exploratory work or the commercial work or the things that we do in space.

There's just a lot happening right now. But we don't have the norms and regulations in place like we do in the commercial airspace that we fly through when we're going home for the holidays or what have you. So there's a lot of work to be done. Okay. There's a lot there that I want to tease out and talk about. But I think first let's start with what needs to happen in terms of more norms and more rules of the road to continue to ensure more of this innovation and more of the maturation of this innovation.

Let me start by saying, first, it's critical that the United States lead this effort. Just as we do in commercial aviation, just as I hope we do in artificial intelligence, it's a competitive advantage for the United States to be the leader of creating those norms. Most of the rest of the world wants us to do that too and make sure that our values, equity, transparency, privacy, are imbued in those types of norms. So we need to be out front taking a lead on that because the space domain is not the same place in time as the commercial aviation domain is. We don't have those rules because there's just been a recent proliferation of things happening up there, things going up there, different models of how we're going

to use space. And so we need to put norms in place, but we need to do it in an iterative, thoughtful way so that we don't stifle innovation and slow things down and allow other countries to leap past the United States. You represent a lot of these space companies, aerospace and defense companies as well. What are you hearing from your members in terms of what they would like to see, I guess some more specific examples to have that happen? So the first thing, the current treaty is from the 1960s that requires governments like the United States to certify and oversee anything novel, anything non-national security, so anything commercial. What that means is still to be determined and worked out,

but the fear is that if we try to do everything at once, we'll just slow everything down. But it's in everyone's interest to have certain things focused on first. For example, what do you do with debris up there? It's a lot easier to put things into space than to bring them out of space, but over time you have more and more and more things up there that become an increasing risk for your assets up there. I mean, the space station gets hit. And if you have to maneuver your vehicles up there, it's using precious fuel. There aren't gas stations up there. So thinking about things like orbital debris, sustainability in space, and just traffic management is becoming an increasing issue. But there's so much stuff up there now that even the people that are ground-based, the scientific community that's looking

into the stars, their view is being blocked in some ways by what's up there. So all these things have to be discussed. And of course, safety is a key component of this. As we think about putting more and more people in space, we have to work through a human space flight and how you make that safe or think about that conceptually like you do with commercial air travel, recognizing that it's not the same and in fact it's kind of decades behind in the technological advancement or use of that domain. The word novel, I'm just going to hone in on that for a moment because to your point, you're seeing more of these public-private partnerships. Space and I think about NASA

really sort of forged the way in terms of some of those creative partnerships, but you're seeing it really across other aspects of government, including into DOD now. The intersection of commercial space companies and national security efforts, it kind of raises the question, what is novel now? So I think I'm way oversimplifying, but I would define it for me novel is anything that's not national security. Now that's a national security bias that I bring to it, but tourists going into space or pure commercial activity utilizing space for research and development or for whatever it is. But you're right. Increasingly,

national security is using space, is using commercial activity as a service. So instead of buying everything, hiring a company to build everything and put it up there, they're just saying, deliver something to me. However you get it up there, that's fine. And so that increasing traffic means there's more regulation necessary to make sure things aren't hitting each other or being safe. But you have this ecosystem that's very broad. Companies on one side that are used to dealing with things in a very regulated way.

Companies on another side that are thinking any regulation whatsoever is a very regulated way. Companies on the other side that are thinking any regulation whatsoever is getting in my way. So finding that balance so that we're not stifling innovation, that we're encouraging innovation, but we're maintaining safety, not just in space, but on the ground, and protecting other people's assets. One bad player can cause a big problem. It's the same with advanced air mobility.

Some companies can probably figure out pretty easily how to get that pizza or that book to your door. It only takes one drone to hit an air ambulance to cause problems for everybody else. It's the same in space. The other piece of this, of course, is the talent pool and the future pipeline of workforces. To me, what's so interesting, we're sitting here at the Reagan National Defense Forum, and not that far away, in the L.A. and Orange County areas, I mean, it is just a thriving hub of space startups. And what's really interesting is that sort of the big space startup companies that we all know and that have now been around for a couple of decades,

like the SpaceX's and even Blue Origins of the world, it's talent that started at those companies that are now going and starting their own companies. Just, I guess, in terms of what you think of the future workforce and what you think of this environment and how it's growing or going to grow. Well, I think of future workforce as a whole of country problem because it starts very young. You know, if you want to be an engineer that's working on something that's going into space,

it's hard to decide to do that when you're in college. You've got to do all the work year after year after year starting in elementary school to study math, to study science, to build on those skills, to become that engineer that can work on that. And so we need to have a system in the United States, an educational system, that offers those opportunities for young kids, first of all. So we've got to think about investing, I think, more in the educational system and broadening the opportunities that are available for kids at an early age. We've got to start young to have that big part of the funnel as big as possible.

Then we have to do things that excite kids to pursue STEM. I mean, it's one of the clearest things historically in terms of exploration in space, the linkage between kids going into STEM, getting excited about STEM, and what's happening in space, specifically what NASA is doing. So when you think about the NASA budget, a lot of people will try to compete it against other things, but it's hard to think about how broad the impact of the NASA budget is. And part of that is the Apollo program, the Challenger program, now the Argonauts program. That gets kids excited and they want to know how they can be a part of that.

It brings them into that big end of the funnel. Then we just have to find ways to keep them as they're going through so they can come out and be a part of that workforce and do things in the space world. And you're right, it's not just about exploration, it's about innovation because you're bringing people into these companies and then they get excited and they do other things and it grows from there. And there's a third element that I think is really interesting is NASA, our space program historically has been one of our greatest

soft power tools as a country. We build these amazing international relationships through space. The Apollo program, certainly the International Space Station, the Artemis program is built on international cooperation. We couldn't afford to do it ourselves as a country, but nor do we want to because bringing in these other countries to be a part of it is an exciting way to, in a positive way, build these partners and alliances that we have around the world that our adversaries from the national security spectrum do not have. To go back to the stem piece of this and the fact that it needs to start early, is that something that's even cooking within the Department of Ed or I guess looking across the country,

either federally or across states? I mean, who's getting their arms around it, if anybody? So it is. The Department of Education is focused on it. There's an element in the NASA budget for STEM education. This user advisory group to the National Space Council today, a big part of that was focused on STEM education and getting kids in STEM. And you have to do it from a macro perspective, big programs I think that government's focused on, the educational system, but then small things too where you can link kids to opportunities in academia, in the classroom, but also outside in industry.

I mean one of the things AIA runs the world's largest student rocketry challenge, middle school and high school students. We get about 5,000 kids a year who compete. We take the winning team to Europe every summer for the international competition and we trace these kids. We've developed scholarships for them with institutions of higher education. NASA takes, NASA takes the top 10 teams and brings them into their competition which is a graduate level education. And this year was particularly exciting because while the, literally while these kids were competing at the Nationals in Virginia this year, in May, there was a graduate of the first year's program in space as an astronaut.

And so you have to find ways not just to get them interested, but to keep them interested. Because STEM education really, from elementary school through college college is a series of off-ramps. I mean we lose kids when they go from elementary school to middle school, middle school to high school, high school to college for a number of reasons. Other opportunities come along or opportunities disappear for them because STEM education is more expensive than liberal arts, other parts of liberal arts education. I'm an example of that. I was a STEM kid going into college, and I graduated as a history major,

so I'm the cautionary tale that I talk about. But these types of opportunities and the things that we do like NASA are the things that keep them interested. Your outlook for the space economy, whether it is from the national security and defense standpoint or from the civil standpoint where NASA is concerned or from commercial or all of the above since I know they're sort of merging? Yeah, so on the national security side, it's really interesting to watch how the commercial,

the growth of commercial space is helping national security, providing more opportunities for national security planning. Now, they have to be careful that they don't rely on the commercial aspect and then don't have resilience for what they need in national security space. Commercial space is interesting. I think it's like a lot of other industries. You see growth, you see potential, a lot of money comes in and then you get to a phase in your development where you have some rationalization because there needs to be some income streams. So what's interesting, someone who spent much of his life in the Pentagon, is a lot of these companies

did things on their own with some commercial model in mind and then realized that the Pentagon is a place to develop a revenue stream. So that's why you see a lot of these companies that are commercially focused, commercially based looking to the Pentagon because that's a place where they can get a revenue stream if they're running out of funding cycles. So I think in many ways there's a lot of potential in space, a lot of potential in commercial space, a lot of money chasing that. And we'll just see how that will rationalize

in the industry. Great. Eric Fanning, thank you so much. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.