The defense dollars flow
In antiwar state, contracts have soared since 9/11
As a state, Massachusetts is as blue as they come and deeply critical of President Bush's handling of the war in Iraq. But more than five years after the terrorist attacks on Sept. 11, the Commonwealth is reaping enormous -- and disproportionate -- economic rewards from a rapidly increasing Department of Defense budget.
And nowhere has that windfall been more intense than in the technology belt north and west of Boston.
Since 2001, contracts awarded annually to Massachusetts companies by the Pentagon have surged from $5.3 billion to $8.3 billion. Almost $1,300 is being spent by the military for every man, woman, and child in Massachusetts.
Ground zero for that money is the triangle between Hanscom Air Force Base in Bedford, the Massachusetts Institute of Technology in Cambridge, and
And while billions of dollars flow to and among those three entities, the spillover around the region is enormous. Spread among just 27 communities between Medford and Pepperell ( including Hanscom) , the Pentagon spent more than $1.9 billion last year. That is more money than the Department of Defense spent in the entire state of Kansas and nearly 12 times the per-capita outlay in Idaho.
"There is a fairly strong anti military culture in Massachusetts, and I'm always struck by the degree to which people there don't fully grasp the degree to which their economy is dependent on the Pentagon," said Loren Thompson, a Plymouth native and defense specialist at the Lexington Institute in Arlington, Va. "The economic impact on this state is much more profound than most people realize."
Pentagon contracts fuel the fifth-largest sector of the economy in terms of jobs, according to the state's secretary of economic development. And, unlike other industries that have weathered ups and downs since the terrorist attacks in 2001, military spending has climbed an average of $600 million a year for the past five years.
That money buys weapons and munitions needed for the wars in Iraq and Afghanistan, but an enormous chunk of it is funneled into research and development for the Department of Homeland Security and the massive, $250 billion modernization of the armed services championed by former Defense Secretary Donald Rumsfeld.
Raytheon, for instance, which employees 12,100 people in Massachusetts and has 11 facilities with a payroll of $1.15 billion, is the fifth-largest defense contractor in the country. Between 2000 and 2005, Raytheon's Pentagon contracts have increased from $6.3 billion to $9.1 billion , according to the Department of Defense.
And
"Our contracts have increased significantly " since the war started, Millman said. "Saving soldiers' lives is something we value dearly."
The money that has been rushing into the Route 128 area has washed over these large defense manufacturers and buoyed medium and small businesses across the technical and nontechnical spectrum. Welch Foods Inc. in Concord does $7 million worth of business with the military every year. New Balance, which has a plant in Lawrence, sells thousands of its 498 running sneakers to soldiers entering basic training, and Malden Mills makes the high-technology fabric for the both the cold-weather jackets and pants that soldiers wear in Afghanistan, as well as the desert jackets they wear in Iraq.
"We started doing business with the government in 1998, but it has definitely increased since the war started," said Chris Costello, a spokesman for Malden Mills. Contracts are in the tens of millions of dollars, he said. The company, which is located on the Lawrence-Methuen line, employs about 1,000.
Ranch Kimball, the state secretary of economic development, estimated that between 85,000 and 95,000 jobs in Massachusetts are defense-related, and the majority tend to be high-paying with full benefits. That's about three times the number of jobs generated by the much-ballyhooed biotechnology industry.
And, though the majority are geared toward highly educated scientists -- among the money spent at Hanscom is a $320 million contract with MIT -- defense jobs almost single-handedly have kept manufacturing afloat in the state. Kimball estimated that between 15,000 and 20,000 precision manufacturing jobs -- that typically pay between $20 and $30 an hour -- were in place because of defense contracts.
Indeed, the full extent to which Pentagon spending has benefit ed the local economy is likely two to three times greater than the $8.3 billion in contracts, Thompson said. What does not show up on that list are the subcontracts that Massachusetts companies are hired to carry out by other military contractors from around the country.
The impact is hardly lost on the people directly involved. IRobot Corp. , the Burlington company started just 16 years ago, now employs 350. Since 2003, government contracts have increased from $11.3 million annually to $57.3 million through the first nine months of this year. Government contracts now make up 45 percent of the company's business.
Included among that work are 700 robots the company has shipped to war zones. Carrying cameras, the robots enter caves in Afghanistan searching for members of the Taliban or houses in Iraq that are believed to be occupied by insurgents. Each robot runs about $115,000. The company is anticipating future orders to run in the thousands.
"Before the robots got there, young servicemen had to do cave exploration with a 12-foot stick and a rope tied around their waist," said company spokesman Joe Dyer. "The robots have been a huge infusion of support for the troops."
And the Pentagon contracts have been a huge infusion for the economy of the state. The annual economic impact on Hanscom Air Force Base alone is estimated at more than $3 billion, according to a report created in 2004 when the base realignment was ongoing. The 2005 Defense Department contract with the
And while the lion's share of the cash goes to huge corporations, some money also finds its way into medium-size companies such as Aerodyne in Billerica, which employs 50 people and just created a turbine-blade cooling system for the Department of Defense at a cost of about $5 million. And then there are mom-and-pop shops like Gilbert Industrial, a five-man, spot-welding company in Pepperell that works on a erospace equipment and landed a $36,350 contract from the Pentagon for a job last year in Colorado.
All told, more than 1,500 companies each received a contract of at least $25,000 during fiscal year 2005, according to the Department of Defense.
Douglas Belkin can be reached at dbelkin@globe.com. 
