25 Oct, 2012

Travellers To Foot Big Chunk of US$2,595 Billion Global Homeland Security Bill Over 10 Years

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The global market for homeland security equipment is expected to generate US$2,595 billion in business between 2012-2022, according to a market research report released by Strategic Defence Intelligence (SDI). Demand will be driven by security threats such as terrorism, illegal border infiltration, piracy, drug trafficking, cyber espionage and critical infrastructure security, among several others.

The 208-page report, priced at US$4,800, profiles the following companies which are expected to get most of the business: Lockheed Martin, General Dynamics, Science Applications International Corporation (SAIC), CACI, Northrop Grumman, ITT Exelis, Raytheon, BAE Systems, L-3 Communications, CSC, Smiths Detection, EADS, Thales, and Elbit Systems.

The Asia-Pacific, followed by North America and Europe, is expected to be the largest and one of the fastest-growing markets for homeland security infrastructure and equipment, driven primarily by China’s mammoth expenditure. Of all the countries in the region, China is expected to constitute the largest share of the homeland security market, followed by India, Australia, Japan, South Korea, and Thailand. China leads the global HLS expenditure with a share of 50% and is the only country which spends more on internal security than on national defense, the report says.

It provides detailed analysis of both historic and forecast global industry values, factors influencing demand, the challenges faced by industry participants, analysis of the top companies operating in the marketplace, and key news. It lists the potential market opportunities for those wishing to enter the industry, using detailed market size forecasts.

In the Asia-Pacific, demand will be driven emerging economies such as India and China execute extensive modernization programs for their respective police forces and other security infrastructure which were neglected in the past few decades.

Says the report summary, “One of the primary functions of the homeland security initiatives taken by the various countries includes protection against terrorist activities, minimizing the damage and recovering quickly from attacks. Currently, the major driver of the global homeland security market is the rise in terrorist activities across the world.

“The wars against Afghanistan and Iraq have increased the threat of terrorist attacks against countries all across the world including the US, the UK, Israel, India, Pakistan and Indonesia. Moreover, recent years have witnessed advancement in technologies used by terrorists and this has fueled research and development activities by various countries in an endeavor to develop effective and advanced counter measures.”

Biometrics is expected to be one major growth area, the report says. “The growing number of terrorist attacks, threat of plane hijackings, corporate security and identity theft are all factors that have resulted in the growth of biometrics as an essential security measure.

“The major drivers of biometrics technologies are the large scale government ID and security programs which are needed to facilitate mass surveillance and access control management. These technologies, which are gradually replacing conventional methods of identification and security checking, are being increasingly used in various civil and commercial applications including point of sale, ATMs and border security.”

One of the key questions of interest to the travel & tourism industry is who should pay for this security.

According to the report, “While the global homeland security market is definitely an attractive and lucrative one, the sheer scale of funding required to effectively implement the new technologies presents an obstacle for market growth. This especially holds true in light of planned defense budget cuts announced by various countries globally and especially by European countries. High costs have led to many governments redirecting their budgets towards more manpower-intensive solutions or towards relatively commoditized and cost-effective systems.”

The report says that procurement schedules are projected to increase steadily over the forecast period with the modernization of homeland security departments of several countries. At the same time, key challenges to be overcome will be high costs and bureaucracy leading to conflict among security agencies.

It adds, “The global homeland security market is currently fragmented with many companies offering single products and solutions. With companies increasingly looking at offering a portfolio of security options under one roof, the market is expected to witness a phase of significant consolidation.

“Recently, the concept of homeland security has evolved with the diversity and complexity of security and defense needs. This has resulted in companies becoming aware of the need to solve multiple needs through further RandD of existing products and by adding new technology to their portfolios through partnerships and MandAs.”

The report says that countries are increasingly adopting cloud computing in an effort to develop effective defenses against cyber attacks.

“The cloud computing model is advantageous in preventing cyber crimes because it consolidates the entire IT infrastructure into one manageable platform. It also further possesses the capability to address not only the issues pertaining to high cost incurred on memory and storage but also the costs involved in capital infrastructure and labor.

“While a significant amount of money is being spent by countries worldwide to secure their IT security systems, there is a considerable lack of cyber security experts to implement the plans being laid out by the governments. Since this sector is in its nascent stage of development, the existing training and education programs are thought to be limited in scope and therefore not adequate to equip people with the necessary skills to implement a comprehensive cyber security plan.”

It adds, “Recent years have witnessed growing concerns about the possibility of bio terrorism attacks that could strike cities across the world. Threats such as anthrax, H1N1 and avian influenza flu, have drawn serious attention to the need for bio surveillance systems that provide early detection and warning about biological threats. This has resulted in governments, militaries and the biopharmaceutical industry taking pre-emptive measures and developing strategies to counter such an attack.

The report notes the various ways of penetrating markets.

“Recent years have witnessed a rise in the number of joint ventures between companies looking to make a foray into the lucrative homeland security market. Domestic manufacturers are now encouraged to form strategic alliances and technology transfer agreements with established companies as countries are keen on developing their indigenous manufacturing capabilities. In addition this also provides the foreign company with an opportunity to cater to a new market.”