Defense Contractors Find New Roles in Evolving Market with Focus on Cyber, ISR

Cooper Smith The New New Internet October 1, 2010
In the wake of Robert M. Gates’ defense budget cuts, defense contractors should adapt to a new marketplace by focusing on growing key areas such as cybersecurity and intelligence surveillance reconnaissance, according to a new report.
Deloitte’s newly released “Defense – New Realities, Innovative Response” report draws upon the expertise of senior retired military general officers who now consult to Deloitte: Gen. Chuck Wald, Lt. Gen. Harry D. Raduegeand Lt. Gen. Pete Cuviello.
“The security threats the world faces today are more complex and diverse than ever before,” said Tom Captain, vice chairman and Deloitte’s aerospace & defense sector leader. “There is a shift underway in how the U.S. military plans, organizes and equips for battle – along with an increasing pressure to make every defense dollar count. This environment will create opportunities for those contractors that can help the military find improvements that save money, increase flexibility and improve efficiency.”
Inflexible, non-modifiable systems will be difficult to justify and unlikely to compete for the Department of Defense or international dollars, said the report. However, there are five key areas that have indicated significant growth in the A&D sector, including ISR, cybersecurity, government services and IT, business process improvement and globalization and international markets.
The report also found that international markets will often mirror U.S. DoD acquisition strategies, especially where nations are philosophically and doctrinally aligned with the United States. Another key finding was that United States will encourage like-minded nations to acquire U.S.-produced equipment and technology as part of the U.S. strategy to develop partner capacity and to fight in coalitions.