Global Security: in Search of a New Vision - Center for Strategic ...

Chapter 37
How Industry and Government Must
Work Together to Provide Best Value
Mr. Kent Schneider 1
AFCEA, the Armed Forces Com mu ni ca tions and Elec tron ics Asso ci a tion, does not com pete in
this global and trans at lan tic mar ket but rather has about 1,700 cor po rate mem bers, includ ing
every com pany at this table, who par tic i pate in that mar ket. Since about one in four mem bers is
located in Europe, we feel as though we have a foot on each side of the Atlan tic.
I would like to give you our total mem ber ships’ per spec tive. And I’d like to talk about some of the
themes you have heard about already but with just a lit tle dif fer ent spin on them.
SOME STA TIS TICS ON RESOURCES AND BUD GETS
We heard ear lier from a num ber of speak ers about dwin dling resources and tight en ing bud gets. Let
me give you some num bers so that you can put some scale to that. In the U.S., in the defense mar ket, we
have expe ri enced 34% real growth in the 2001–2008 time frame, and that includes the sup ple men tals that
have been so crit i cal to meet ing obli ga tions. How ever, if you look at the 2009–2013 bud gets, the expec ta -
tion is, if the bud gets hold up, that we will have a decline in real terms of 3.3% per year. Sim i lar pres sures
in Europe are now being expe ri enced, with recent bud get reduc tions on the defense side in Ger many, the
U.K., and else where. Of course, com pound ing those issues are the facts that the allo ca tion of resources
has shifted and that per sonal costs and inven tory replace ment as a result of the per sis tent con flict we
have been expe ri enc ing, and O and M costs are increas ing as a per cent age of the bud get. So that means
that mod ern iza tion pro grams and other efforts to improve capa bil ity get pushed even farther back as a
result of those pressures.
THE NEED FOR GOVERNMENT-INDUSTRY COMMUNICATION
To rein force what Scott Har ris was say ing, glob al iza tion on the indus try side is occur ring at an incred i -
ble rate. Indus try is expand ing its mar ket view. Why Because bud gets are declin ing every where, and as
indus tries look locally, they do not see enough busi ness to sus tain them selves and so they start look ing
1
Mr. Kent Schneider is CEO of AFCEA International.