July 2016 Digital Edition
June 2016 Digital Edition
May 2016 Digital Edition
April 2016 Digital Edition
March 2016 Digital Edition
February 2016 Digital Edition
January 2016 Digital Edition
Homeland security market to grow at more than 5% annually, concludes HSRC
The combined U.S. market for homeland security products and services – purchased by federal, state and local governments, the intelligence community and the private sector – will increase from $69 billion in 2010 to $84 billion in 2014 – a compound annual growth rate (CAGR) of at least 5.1 percent.
At least that is the conclusion of the Homeland Security Research Corporation, of Washington, DC, which has analyzed the funding sources and market size for the homeland security, homeland defense (HLS-HLD) and intelligence sectors, and compiled its facts, analyses, charts and graphs into a 920-page study it will release on July 26.
The study, US Intelligence, Homeland Security & Homeland Defense Markets: 2010-2014, reaches some interesting conclusions and attempts to correct what it sees as some popular misconceptions:
- Financial Crisis -- The financial meltdown in the U.S. has not had a negative effect on homeland security spending. “The 2009 US economic downturn and the growing national and federal deficit have not, and are forecast not to have, a significant effect on consolidated HLS-HLD funding and related markets,” says a preview of the full report, which was released by HSRC on July 22.
- Ongoing Threat – HSRC based its analysis on the belief that the prevailing terrorist threat will not go away in the foreseeable future. “The research assumes that the HLS industry and markets will operate within a scenario of ‘ongoing crisis,’ which means there will be continual intermittent, medium-level, but not devastating, terrorist activity during the 2010-2014 period,” says HSRC.
- Pie Slices – Contrary to popular misconception, the Department of Homeland Security is only the third largest spender in the HLS-HLD marketplace (with 18.3 percent of total spending), while the “state and local” share ranks first with 23.7 percent of the overall market and the U.S. Defense Department ranks second with 22.5 percent of the market.
- DNDO’s Failure – Despite the failure of the Domestic Nuclear Detection Office to develop and deploy an effective nuclear-radiological interdiction infrastructure during the past five years, HSRC concludes that the market for defenses against CBRN terror attacks remains strong. In fact, Dan Inbar, chairman of HSRC, says, “There is a temporary and thin wall of (terrorists) ignorance about how to stage an effective WMD attack protecting the US from such an attack.”
- Bright Spots -- Individual sectors within the HLS-HLD market will grow at different rates, some much more rapidly than the overall average. For example, the four fastest-growing sub-sectors between 2010 and 2014, according to the HSRC report, will be standoff explosives detection system (a CAGR of 42.9 percent), RFID-based systems and services (15.5 percent), bio-chem detection systems (14.3 percent) and biometric-based systems and services (10.21 percent).
The market comprised by 50 states and more than 30,000 counties and cities fund between $53 and $62 billion worth of HLS activities each year, says the report, “while the federal government supplements this spending with grants valued at $3-4 billion annually.” As one might expect, the five largest HLS markets, by state, include California (whose market will be $13.4 billion between 2010 and 2014), New York ($10.4 billion), Texas ($6.0 billion), Illinois ($3.9 billion) and Florida ($3.7 billion), says the study.
Mark Sloman, the CEO of the Homeland Security Research Corp. told GSN in a phone interview on July 22 that he and his colleagues were most surprised to realize how ripe with business opportunities are the state and local governments. He acknowledged that penetrating this decentralized market can sometimes present serious challenges, but nonetheless encouraged HLS suppliers to target these potential state and local customers.
The price for the market research report for one user is $4,450, according to HSRC’s Web site. For five users, the price is $9,550 and the “global site” price is $12,750.