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JUNE 7, 2002, 11:45 EDT
WASHINGTON -- Government and business leaders believe that securing the homeland against potential terrorist threats could cost between $93 billion and $138 billion in 2003. This finding was among the major conclusions uncovered during an in-depth market research effort conducted by Deloitte Consulting and Aviation Week, a division of The McGraw-Hill Companies.
The effort surveyed 300 leaders from all levels of government and a broad range of industries who are knowledgeable about security matters in their organizations. The report, "The Homeland Security Market: The World's Most Challenging Emerging Business Environment," was released at The McGraw-Hill Companies' Homeland Security Summit and Exposition in Washington, DC.
In addition to estimating the potential size of the market, the study also indicated that Homeland Security funding initially will be directed toward priority threats against the United States. However, funding will then level off until a more comprehensive, Federally-directed Homeland Security strategy is in place.
According to the study, public and private sector organizations are aligning funding closely with potential threat priorities. Governments are allocating the largest shares of current security funding to dealing with public health threats, weapons of mass destruction and disruption, and protecting physical infrastructure. Businesses are placing the majority of their homeland security dollars in securing transportation and protecting the information technology/telecommunications infrastructure.
"Our survey reveals an evolutionary funding pattern," said Lynda Taskett, a Deloitte Consulting Principal who leads the firm's Homeland Security initiative. "There is likely to be a surge in spending initially on those initiatives that are top of mind to government and business, but that will level off. We then expect to see another wave in funding that will correlate to a more integrated and coordinated approach to Homeland Security."
The research effort, which involved online surveys and in-person interviews, was intended to provide a better definition of Homeland Security and identify the perceived solutions, as well as their contributors and inhibitors. "This study is unique in that it taps leaders who are credible and knowledgeable about security concerns," Taskett added. "Our research provides a sketch of a market that is still in development. However, the data we uncovered is actionable and offers a government and industry, as well as solution providers, early guidelines to developing effective approaches to Homeland Security."
"Through our coverage of the Homeland Security market in Homeland Security & Defense and other news publications, we at the Aviation Week Division of The McGraw-Hill Companies became keenly aware of the need for comprehensive information on the estimated size, composition and duration of the market," said Kenneth E. Gazzola, Executive Vice President and Publisher of the Aviation Week Division. "When we could find nothing that met that need, we proposed to Deloitte Consulting that we collaborate in producing such a study."
Other major findings identified in the study include:
Investment Requirements
Leaders in government and business believe that Homeland Security requires significant investment. However, these officials also believe that not enough money has been budgeted to really address the problem. Some 62 percent of those surveyed indicated that they did not perceive the Federal government was providing enough funding for the major threat areas.
Lack of Clear Direction and Sponsorship
Survey respondents indicated a definite need for a clearer direction and better strategy for Homeland Security. After funding (31 percent), the majority of survey respondents citied Federal policy (23 percent), organizational policy (10 percent) and politics (10 percent) as the biggest barriers to a successful nationwide Homeland Security program.
Network of Cooperation
While the majority of survey respondents (69 percent) believe that Federal agencies are ultimately responsible for addressing Homeland Security threats and developing strategies and solutions, respondents indicated that a broader array of stakeholders is required to adequately combat the problem. Leaders from both government and business indicated that they had to interact with multiple entities on Homeland Security issues. This suggests that organizations view Homeland Security as an extended enterprise process where solutions must address cross-enterprise requirements.
Additionally, the Deloitte Consulting/Aviation Week study identified five implications from the survey data:
- Government and business leaders need to plan for the future they know, as well as the future they do not know.
- Homeland Security plans need to address the entire threat spectrum.
- Government and business leaders need to strive for attainable security levels by balancing risk and protection.
- Government and business leaders need to cooperate to innovate.
- A national strategy needs to be developed to provide a blueprint for action for all public and private sector organizations.
Electronic copies of the report can be obtained from Jan Bamford, Deloitte Consulting, at 412-402-5010 or jabamford@dc.com.
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