Need for Enhanced Homeland Security to Promote Uptake of Security Technologies

Frost: Recent terrorist attacks across Europe have underlined the urgent need for the European Union (EU) to enhance its security capabilities, particularly at its borders. This is driving the implementation of security technologies at major entry/exit points with demand for biometric identification/authentication systems, radio frequency identification (RFID) and explosive detection systems projected to surge over the next decade. Technologies that can increase security capabilities and supply chain efficiency as well as reduce costs at the same time are poised to experience significant demand growth over the next ten years.

For instance, biometrics will be more widely deployed at airports for passenger processing and electronic access control, as the technology provides an opportunity to reduce labour costs while at the same time maintaining, or even potentially increasing, security capabilities.

By 2014, the European homeland security technologies market (comprising biometrics, screening, RFID, unmanned aerial vehicles (UAV) and closed circuit television (CCTV) technologies) is set to amass nearly €874.0 million.

Airports are expected to display significant demand for identification/authentication and screening technologies from 2005-2014. Seaports will exhibit notable uptake of screening technologies and particularly, tracking technologies. Borders will generate the lowest level of demand for screening technologies in the first half of 2005-2014. However, the overall border demand will increase in the second half of this period, spurred on by the growing importance of UAVs.

The need to improve air travel security and facilitate economical and effective air passenger processing will promote the uptake of security technologies, especially biometrics. The passage of key legislation along with standardisation efforts by industry associations are expected to provide further impetus to the biometrics market. Most EU national governments have already begun biometric procurement programmes, with companies receiving several sizeable contracts for biometric technologies.

Government receptivity is playing a central role in the more widespread implementation of biometric systems. At the same time, the establishment of standards and safeguards is supporting public awareness and acceptance of biometric technologies. Even as the biometric industry undergoes significant changes over the next ten years, manufacturers of RFID will benefit from their expanded use at European seaports.

For companies keen to leverage emergent growth opportunities in the European homeland security market, a prospective pitfall that must be avoided is to use the US homeland security experience as a template for entering the European market. The EU market is unique, in terms of both overall security requirements and security funding. The level of funding, the number of stakeholders, the identification of decision-makers and the selection of strategic partnerships: all these, and more, are necessary to prevent failure in this expanding market. Without a true understanding of the hurdles that they need to overcome, market participants will struggle to achieve competitive success.

As the market expands, small industry participants are likely to be taken over by different types of industry participants that, in turn, are likely to be acquired by other companies that may not have existing expertise in the homeland security market, but are looking to gain a foothold in this lucrative industry.

Strategic partnerships and alliances with regional leaders will advance the prospects of potential market participants. Moreover, an in-depth understanding of the regional market along with its particular business idiosyncrasies will advance revenues in the long term.

European Homeland Security - A Market opportunity analysis Publ 20060110