North Carolina is CNBC's top-ranked state for business and the fastest-growing state in the Southeast.
It's also home to four major military installations – including Fort Bragg, the largest in the world – and has the fourth-largest number of active-duty service members stationed within its borders.
The assumption has been that the defense economy would follow.
Yet North Carolina ranks 30th in defense spending as a proportion of GDP.
"We thought it would happen organically. It hasn’t," Senator Bob Brinson said this week. “Right now, nobody's playing matchmaker with all of these resources.”
That ends now.
The NC Chamber and North Carolina Critical Technologies Alliance just launched the First in Defense Coalition, an industry-led effort to close the gap between the state's military assets and its defense economic output.
"Our military presence, veteran workforce, world-class universities and community colleges, and advanced manufacturing base position us to compete at the highest level," said NC Chamber President and CEO Gary Salamido.
The coalition's launch coincides with the creation of a new bipartisan, bicameral National Security Technology & Innovation Caucus in the General Assembly.
It’s co-chaired by Senators Brinson and Jay Chaudhuri alongside Representatives Mike Schietzelt and Charles Smith.
The goal is explicit.
North Carolina currently ranks 25th in research and development contracts – about $200 million – on par with New Hampshire, a state with a fraction of the military footprint.
"There's no reason we should be stuck at $200 million when there's easily $2 billion of capacity we can bring to North Carolina," Rep. Schietzelt said at the coalition’s launch event in Raleigh on Wednesday.
That tenfold increase would jumpstart an innovation boom, said NC Critical Technologies Alliance co-founder Jarrett Lane, noting that venture capital has poured a record $49 billion into early-stage defense companies last year alone.
"North Carolina has the assets to compete, but capturing this opportunity will come down to speed, coordination, and execution," Lane said.
The cost of inaction is visible.
Anduril, one of the most closely watched defense technology companies in the country, had a facility in Wake Forest. It took its Arsenal-1 project to Ohio instead.
"It breaks my heart every time I drive by that empty building," Schietzelt said.
The coalition also notes that between 12,000 and 20,000 servicemembers transition out of the military in North Carolina every year.
Half of them are leaving for other states.
Keeping them here, and building the companies that give them a reason to stay, is central to what the coalition is trying to solve.
This kind of playbook isn't new to North Carolina.
Senator Chaudhuri chairs the General Assembly's life sciences caucus. He noted that North Carolina's emergence as a national life sciences hub didn't happen by accident.
The state got organized, connected its universities to commercial customers, and built a policy environment that made it easier to grow companies here than anywhere else.
The defense opportunity follows the same pattern, with a different sector.
What often goes unrecognized is how directly the Pentagon funds the kind of entrepreneurial, dual-use research North Carolina already excels at, including being the second-largest funder of breast cancer research in the country.
Chaudhuri sees a direct line between that funding and the state's existing strengths in life sciences, quantum, and biotech.
The opportunity is to connect North Carolina's researchers and early-stage companies to those dollars more deliberately – and to build the venture ecosystem that helps them scale once they do.
Ohio, Utah, and Michigan are being watched as states with effective strategies in aerospace and defense that the coalition is looking to emulate.
The coalition is planning a full legislative caucus meeting in June, a delegation visit to Washington this summer, and a presence at the Eurosatory defense conference in Paris.
Founding coalition partners span the Research Triangle and beyond, including NC State, Duke, rare earth magnet manufacturer Vulcan Elements, RTI International, NSTXL, the Institute of Digital Engineering, and regional chambers from Greensboro to Fayetteville to Moore County.
Organizations can join at nccriticaltech.org/first-in-defense.
