U.K. homeland security market earned revenues of $609 million in 2007

Published 24 July 2007

U.K. homeland security market to grow steadily until 2012, then contract; emphasis on securing mass transportation, urban areas

The U.K. government has been steadily increasing its security budgets in the face of growing threats to national and civil security. Recent terror attacks combined with upcoming events such as the 2012 London Olympics are leading the government to prioritize safeguarding the country against threats of this nature. The result: An attractive market for security solutions, offering significant potential for both revenues and growth. “Although the concept of Homeland Security is a relatively new one, security has been amongst the highest priorities of governments around the world since the 2001 attacks in New York,” remark Frost & Sullivan Research Analysts Georgios Oikonomakis and Friso Buker. “The United Kingdom is no stranger to the threat of asymmetric warfare and is one of the highest spenders in Europe, with an annual security budget in excess of GBP 2 billion.”

New report from Frost & Sullivan (http://www.aerospaceanddefense.frost.com/), “U.K. Homeland Security Market,” finds that the British market earned revenues of $609.0 million in 2007 and estimates this to fall to $346.0 million in 2016. There are thus many opportunities which will appear midway through the forecast period, as the market is forecast initially to grow and then to contract. The research firm says that growth is unlikely to continue throughout the entire forecast period because the bulk of security spending is likely to be allocated in the run-up to the 2012 Olympics. The market is nevertheless expected to remain highly competitive and to offer strong opportunities for companies with comprehensive solutions, addressing known threat domains which have so far proven difficult to secure. “Mass transport systems, for instance, are a particularly soft target, as the 2005 attacks on the London Underground network showed,” says Oikonomakis. “The vulnerability of these systems has significantly increased the terrorist threat perception in the United Kingdom and has forced the government to upgrade security measures by enhancing surveillance, detection and response capabilities across all identified threat domains.”

CCTV cameras have been the preferred method of surveillance up to now, but systems which include intelligent processing functionality and remote monitoring capabilities are also expected to drive the market during the forecast period. Transport authorities have also been looking at technologies other than surveillance to close any remaining security gaps. There are significant challenges associated with providing security solutions for open threat areas such as mass transport systems and other congested urban areas. Companies also need to address end users’ specific requirements, many of whom are struggling to develop satisfactory technological security strategies. In addition, the U.K. homeland security market is also highly competitive. There is a large number of established participants, so factors such as a company’s track record and the quality of its references, particularly in the public sector, will be essential to achieving success in this market.

Responding to these challenges, companies looking to get a share of security spending in the United Kingdom need to understand customers’ operational requirements and security challenges,” observes Buker. “In a market with many exciting (but not always applicable) technologies, aligning the product to the customer is infinitely more important than trying to find customers for existing product lines.”