The Strategy Seminar: Business Leaders -Virgil Cammack

Houston, we have a problem.

The space shuttle Endeavour arrived at Edwards Air Force Base on route to its final resting place as an exhibit at the California Science Center. The winding down of the space program is deeply felt. The Endeavour’s passing symbolized that Houston, the home of Mission Control, was no longer the hub of space exploration. California, the final resting place for the Endeavour, was also a hub of space innovation. It was where the shuttle’s main engines were manufactured, its heat shields were designed, and “fly-by-wire” technology was developed (Endeavour’s Journey: For Giffords, a shuttle salute from the sky. Sept. 21, 2012. Houston Chronicle. Associated Press).

Space exploration is being decentralized with more work given to private companies which for perhaps political reasons are geographically dispersed throughout the country. Industries such as the space industry are best managed when they are centralized geographically. There is the tendency to conglomerate when downstream industries are heavily dependent on upstream input (Ellison, Glenn and Edward L. Glaeser. Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach. University of Chicago). As Michael E. Porter put it, “Geographic, cultural, and institutional proximity leads to special access, closer relationships, better information, powerful incentives, and other advantages in productivity and innovation ….“ Porter states that competitive advantage is found in concentrations of highly specialized skills, institutions, and related businesses (Porter, Michael E. Clusters And The New Economics Of Competition. Harvard Business Review. vol. 76, issue 6, pp. 77-90. Nov/Dec 1998).

There is a bill being introduced to aid congress in taking the administration of NASA away from the president, the Space Leadership Preservation Act. Stated by Rep. John Culberson, “. . . to restore the NASA we know and love. The NASA that we know is capable of maintaining that world leadership in space exploration . . . .” This bill is designed to counter the emerging space programs of other countries, particularly China, by allowing a concentration of effort at the traditional NASA sites (Campbell, Kyle. Bill seeks to alter how NASA is led. Sept. 21, 2012. Houston Chronicle). The hope is that if NASA is taken away from one party and shared by both parties, the management of the program can be left in the hands of the scientists. Funding would not be cut, and the program would not be micromanaged at the whim of sitting a president.

Three other space shuttles have been retired: Enterprise at Intrepid Sea-Air-Space Museum (New York), Discovery at the Smithsonian Institution’s National Air and Space Museum (Chantilly, Virginia), and Atlantis at the Kennedy Space Center (Merritt Island, Florida) (Endeavour: Last journey, through contentious space. Sept. 23, 2012. Houston Chronicle, taken from the New York Times). The space shuttle program is retired, but NASA need not be retired (or minimized) or spread to the far winds.