1. Market Research
  2. > Aerospace and Defence Market Trends

An Analysis of the Global Security Industry in Q1 2014

  • June 2014
  • 20 pages
  • Frost & Sullivan
Report ID: 2200848


Table of Contents

Frost & Sullivan’s Perspective on Key Issues

The security industry is evolving rapidly. Mergers, acquisitions, new competitors, and solutions are a regular occurrence with continually evolving customer needs. The following document highlights some of the main events in the first quarter of 2014 with opinion from Frost & Sullivan’s analysts and supporting facts and figures.


The security industry is evolving rapidly. Mergers, acquisitions, new competitors, and new solutions are a regular occurrence, with continually evolving customer needs. The following document highlights some of the main events in the first quarter of 2014 with opinion from Frost & Sullivan’s analysts and supporting facts and figures.

Q1 2014 Leading Events

Flight MH370’s Legacy
A wide variety of safety and security risks have been raised as possible causes of the MH370 tragedy. Whatever the exact combination of factors or single causal factor in this incident, it is clear that when multiple high-risk dynamics combine there is potential for a catastrophe. The MH370 tragedy may well be a result of this kind of scenario, a perfect storm.

Unless there is some evidence found in black box recordings, assuming they are recovered, we may never know the exact events that led to the accident. There is no need to elaborate further on the widely-publicised possibilities, and many of the risks highlighted have been long well known. Issues abound around passport screening, communications coverage, instrument failure, and so on. Such issues have been under scrutiny for many years and are being steadily addressed.

That said a key question remains: to what extent will the industry learn lessons from this event? Unfortunately, learning accurate lessons may never be possible without factual evidence in this case. However, the incident has re-emphasised many of the key risks the industry faces. Even so, the reaction over the following months and years is likely to see these risks addressed independently, with continued incremental change rather than an immediate and drastic change to the industry landscape.
At present, solutions to such industry challenges have not been satisfactorily achieved even where technology and operational solutions already exist, such as passport screening against security databases. Even with such a terrible tragedy demanding expedited mitigation, immediate solutions are going to be few and far between. Although airports and border controls in the region may well tighten practices and introduce further measures, Frost & Sullivan does not expect any security or operational shifts to revolutionise the market.

Unfortunately, the risks highlighted as possible causes are already well known, difficult to overcome for cost, operational, and technological reasons, and usually, if occurring independently, not catastrophic. However, if multiple risks combine, then there is a likelihood of a tragic accident. Without factual evidence, there are no clear, pervasive solutions and hence, dynamic industry shifts are unlikely.

The Long and the Short of it: Implications of Russia’s Actions in Ukraine

Despite the deepening crisis, the events in Ukraine may only result in minor revenue losses for global aerospace and defence (A&D) companies. There is no prospect of far-reaching industrial partnerships unravelling, with foreign companies operating largely through joint ventures and on a case-by-case basis. As the Ukrainian A&D industry, as with the economy as a whole, is intrinsically linked to Russia, even the worse-case scenario is unlikely to drastically alter the landscape. The direct, negative impact on A&D organisations’ revenues is expected to be minimal.

That said the situation does further emphasise the threat perceptions of former-Soviet nations on Russia’s periphery and other neighbouring countries. Frost & Sullivan’s defence research considers threat perception as a key driver of military spending and it is a critical parameter in defence market forecasts. The trend of increased defence spending noted of late in countries like Poland, Estonia, Lithuania, and Latvia, for example, will continue to be underpinned by this factor, but any immediate spike in expenditures as a direct result of Russia’s current action is unlikely. The political rhetoric will not necessarily translate into action in that sense. The upward trend in spending was already underway prior to this crisis and any attempts to further increase expenditure will take years to implement.

It is possible that some high-priority defence programmes in Central and Eastern Europe will be expedited. For instance, the Air and Missile defence project, estimated at $billion and a top priority for the Polish Ministry of Defence (MoD), is likely to receive increased attention. Already, the selection of the project's prime contractor, which was slated for the end of 2015, has been brought forward months to Q4 2014.

Poland is a key example of the increased scrutiny being placed on European defence and security as a result of the crisis. Top executives from Raytheon and Boeing have visited Poland since the Ukraine crisis unfolded. Both Raytheon and Boeing are looking for Polish industrial partners because offsets, including domestic investment and technology transfer, will be a part of any contracts with the Polish MoD.

It is not sufficient to say this recent activity is solely based on Russia’s activity in Ukraine, but it is certainly a contributing factor and possible catalyst for long-planned project initiations. Polish defence spending has been significant for a while now, especially compared to the austerity-restrained markets in Europe. As such, US interest in Poland, coupled with the importance of Poland as a Western ally on Russia’s doorstep, has also led to Boeing recently offering its Super Hornet as a candidate for at least 48 multirole combat aircraft for the Polish Air Force.

US defence contractor interest in such programmes has been bolstered by diplomatic visits including the recent visits of the US Secretary of Defence and the Vice President as well as the probable visit of President Obama in June. Russia’s foray into Ukraine is an emphasis of a threat that has been a constant consideration in European defence and nations on Russia’s periphery, like Poland, have, for a long time been, key to American foreign policy in Europe.

This unfortunate disruption to the decades-long detente between Russia and the West may have far reaching consequences but these are not expected to immediately alter the A&D industry. The political and economic impact of the crisis should be monitored and taken into consideration during strategic planning, but the immediate negative impact is likely to be minor.


Concern about the threat of cyber attacks on government networks, critical infrastructure, commercial enterprises and individuals has continued in 2014 and is unlikely to abate over the coming months. ‘Cyber’ is good newspaper material and organisations selling solutions can make use of the doomsday headlines to urge governments to act and customers to invest.

Stories have not been in short supply. In March, several of NATO’s public websites were the target of a DDoS attack from a group called “cyber berkut”, allegedly a group of pro-Russian activists who are against NATO’s interference in Ukraine. In February Apple announced that a flaw in its software meant that emails and communications could be intercepted by hackers. Analysts at Qualys demonstrated that by hacking into an airport scanner they could effectively mask products so that they weren’t detected, thereby, enabling a physical attack in the departure lounge of an airport or on a plane.

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 60 Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

Ahmad helps you find the right report:


The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

Purchase Reports From Reputable Market Research Publishers

Military Biometrics Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2017 - 2025

  • $ 5795
  • Industry report
  • April 2017
  • by Transparency Market Research

Global Military Biometrics Market: Overview Biometric systems are becoming increasingly popular in wearable devices such as smart watches, eye glasses and fitness bands. These devices are equipped biometric ...

Metamaterial Market by Material Type, Application, Vertical and Geography - Global Forecast to 2025

  • $ 5650
  • Industry report
  • April 2017
  • by MarketsandMarkets

“The overall metamaterial market is expected to grow at a CAGR of 63.1%” The overall metamaterial market is expected to reach USD 4,634.8 million by 2025, growing at a CAGR of 63.1% between 2017 and ...

Digital Radio Frequency Memory Market by Platform, Application, Architecture - Global Forecast to 2022

  • $ 5650
  • Industry report
  • March 2017
  • by MarketsandMarkets

“The Digital Radio Frequency Memory (DRFM) market is projected to grow at a CAGR of 12.16% from 2016 to 2022” The Digital Radio Frequency Memory (DRFM) market is projected to reach USD 1,222.2 million ...


Reportlinker.com © Copyright 2017. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.