Defence and Security Equipment International at London’s Excel in September was a lavish showcase of futuristic, precision-made, and often UK-made military kit. Despite dwindling defence budgets, 1,390 exhibitors were bullish about today’s and tomorrow’s opportunities in emerging markets, security applications, cyber solutions and space. Will Stirling reports.
There are few places in the world where 155mm artillery and invisible tanks line up alongside Royal Navy frigates, Unmanned Aerial Vehicles, virtual rifle simulators and ‘smart’ combat helmets. Defence and Security Equipment International (DSEi) is the world’s largest fully integrated defence and security exhibition.
Whatever your personal view on the arms industry, it is an impressive spectacle of products and companies from all over the world and a statement that, despite being under pressure, the defence industry is in pretty good health.
Of the 1,392 exhibitors at this year’s exhibition, 560 were SMEs and 400 of these were British companies, according to the show organisers.
This is the highest proportion of SMEs at the show to date. One of the drivers for this change is the gradual, but sometimes rapid, switch from ‘plain vanilla’ defence products to those used for security applications. As defence budgets in the industrialised world diminish, this is a race that has consumed big OEMs and smaller companies alike. Also, more straight defence companies are working hard to access the remarkably upbeat civil aerospace market and more will follow – think that in 2011 to date, Airbus has received 1,015 orders for commercial aircraft, while it received just 574 orders in the whole of 2010.
Cyber opportunities and ‘off-the-shelf’ conversations – Finmeccanica
Perhaps the company that best exemplifies the diversification race as defence budgets shrink is Finmeccanica. The diversified, high tech conglomerate has a very large defence component and big footprint in the UK – 10,000 people in the UK work for the company, about 13% of its global workforce. Finmeccanica is represented across Britain from Edinburgh, to Basildon, in a portfolio that includes radar, sensors, systems integration, unmanned aerial vehicles (UAVs) and helicopters.
UAVs are a growth segment for international defence as more military services get access to reliable surveillance technology that avoids putting humans at risk. The UK MoD recently backed a largely Anglo-French group to develop a UAV platform, a blow to Finmeccanica who is a big player here through its SELEX Galileo subsidiary. Senior company bosses including the UK chief executive pointed out that while BAE Systems and Thales are responsible for most of the work, Finmeccanica is involved in some of the capability of the system and is hopeful that there is enough potential in the future UAV space to take a larger slice of the market. At the end of 2010, Finmeccanica invested several million pounds into its UK-based cybersolutions. Archangel is the snappily-titled Security Operations Centre (SOC). The place looks like a huge call centre but has a much more serious mandate than selling double glazing.
Archangel offers organisations a constant remote Protective Monitoring Service that detects when an information breach occurs and seeks out and analyses anomalous events, building patterns which protect against and actively respond to complex and persistent cyber security threats. “In the UK we’re doing business with financial institutions, online gaming companies and others who are increasingly worried about how they both protect UK customers and make sure that people can see their data is well protected,” said Michael Clayforth-Carr, chief executive of Selex SI UK. “The opportunity for Finmeccanica Cyber in the UK is immense.”
Concerns have been voiced by many in the defence industry that a government policy to move toward ‘off the shelf’ defence procurement will endanger the industry. Indeed it is just this policy which has been blamed for BAE’s intention to cut 3,000 jobs in the UK. When asked about the risk to Finmeccanica however, Alberto de Benedictis, Finmeccanica UK’s CEO said: “When it comes down to it, for UK Armed Forces hardly ever is anything bought directly off-the-shelf. The role and scope of the industrial base is very important to achieve this – we are talking to [the Government] and we are very open in our discussions about what are the options that they can really consider. The key question is can defence contractors actually react quickly to a specific requirement in the time available?”
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