Star Wars, Inc.

Whether it's ever even deployed, the space shield is already a $19-billion growth industry

By Jay Finegan | 
 

THOMAS JEFFERSON ENGINEERED the Louisiana Purchase. Teddy Roosevelt cut the Panama Canal. For John Kennedy, it was the space program. Now Ronald Reagan has his eye on an epic-size legacy of his own, the Strategic Defense Initiative (SDI), better known as Star Wars.

By any name it is an undertaking of breathtaking ambition. The professed goal is nothing less than lifting, for all time, the ominous nuclear cloud that darkens the planet by rendering intercontinental ballistic missiles impotent and obsolete. As a scientific and technological challenge, it is mind-boggling. Its potential price tag -- $1 trillion for full deployment -- dwarfs every other military project in the country's history. And for sheer political drama, diplomatic intrigue, and the lure of corporate profits, it has all the makings of a Robert Ludlum thriller.

It remains to be seen, of course, if Star Wars is a visionary alternative to the strategic doctrine of mutually assured destruction -- aptly known as MAD -- or just a Buck Rogers boondoggle that threatens to trigger a new round in the arms race. In the minds and hearts of the SDI faithful, however, there burns an almost religious faith. Damn the costs, blow past the obstacles, full speed ahead. This is the Good Guys against the Evil Empire for all the marbles.

Against this richly textured backdrop, U.S. businesses have swarmed to the crusade. Regardless of the wisdom or the feasibility of the program, they see in its anticipated $19-billion, five-year research budget a once-in-a-generation opportunity. For whether it is deployed or not, Star Wars promises to push back the frontiers of science and technology in ways reminiscent of the Manhattan Project and the race to the moon. Companies that get in on the ground floor can look forward not only to years of lucrative government contracts, but also to the potential of huge profits from commercialization of technology developed at government expense.

It is a safe bet that the lion's share of the SDI budget will find its way to such large and familiar corporate contractors as Lockheed, Rockwell International, and General Dynamics. National laboratories, such as the Energy Department's Lawrence Livermore, Sandia, and Los Alamos facilities, and the Defense Department's Lincoln and Applied Physics Laboratories, have also landed big contracts. Prominent universities, too, have jumped into the fray.

But maneuvering around the feet of corporate and academic giants are hundreds of smaller companies, some of which have sprung up simply to participate in the Star Wars sweepstakes. A couple of hundred firms have already slipped in under federal set-asides like the Small Business Innovation Research program. Scores more are teamed with big contractors, providing engineering and computer support. And still others are slugging it out on their own for prestigious prime contracts in some of the program's most pivotal and exciting areas.

"You have to be careful that the hogs don't trample the piglets on the way to the trough," quips one business observer about the competition. It is a concern SDI's managers have anticipated. By setting up an Innovative Science and Technology Office (ISTO), these managers hoped to make it easier for smaller and technologically adventurous companies to get a foothold in the program. And when research is completed, the Pentagon anticipates that a concerted effort by ISTO and others will have steered as much as 10% of Star Wars dollars to small businesses.

"The far-out, creative thinking is done primarily within academe and the small-business community," says James A. Ionson, ISTO's director, "so those are our prime players." Indeed, there is about his operation an entrepreneurial feel. A 36-year-old physicist formerly with the space program, the vivacious Ionson, in shirt-sleeves and civilian bearing, looks and talks like anything but a Defense Department contract officer. His temporary quarters in a scruffy old office building in downtown Washington suggest at least a symbolic distance from the Pentagon's hidebound bureaucracy. And perhaps most important, Ionson thinks of himself as a "venture capitalist who happens to work for the government," with $125 million to invest this year in cutting-edge research with high potential payoff to the Star Wars program.

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