By Andrew Brown
Already hit hard by sequestration, defense contractors who rely on federal money don’t expect their fortunes to turn around anytime soon. As the number of contracts drops, Virginia’s state economy is particularly vulnerable, because it’s home to so many defense firms.
However, foreign markets may offer a silver lining, so the commonwealth launched the Global Defense Initiative last year to help the defense sector promote itself abroad. To bolster that effort, they called on a team of Mason policy researchers.
“The General Assembly and the U.S. Department of Defense allocated $2 million this fiscal year for the specific purpose of promoting exports from Virginia defense firms,” says Stuart Malawer, a distinguished service professor of law and international trade and appointee to the board of directors of the Virginia Economic Development Partnership by former Gov. Tim Kaine. “Three universities were selected to tackle different topics related to the defense industry. We were contracted to look at cybersecurity export markets.”
Mason public policy professor Sonia Ketkar directed the study, which identified a list of the 10 markets with the most potential to be consumers of cybersecurity products and services, then devised strategies to enter the five most promising markets. “It could be anything from simple antivirus software to more sophisticated software to prevent hackers from penetrating their networks,” she says.
Helping Ketkar with the study were three graduates of the International Commerce and Policy program at Mason’s School of Public Policy: Hollis Beckner, Victoria Huttar and Katie Praske. Distinguished visiting professor Gen. Michael Hayden also consulted on the project. Mason computer science professor Arun Sood from the university’s International Cyber Center, was co-principal Investigator.
The team identified the following markets in their top 10: the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, South Korea, Brazil, Japan, United Kingdom, Australia and Indonesia.
“Defense is a sensitive sector and monitored by the government,” says Ketkar. Before a country was added to the list, the team considered U.S. export controls and relationship with the United States, as well as potential demand. “The Europeans are already pretty strong in this field,” Ketkar adds. “The Nordic countries are among the most secure in the world.” Allied countries in the Middle East, however, lack robust domestic defense sectors, making them attractive export markets.
Malawer and Ketkar hope the study will prompt Virginia business owners to explore export opportunities seriously. “Potential exporters face a mental block,” says Ketkar. “The main goal of the report is to show business owners they can enter these markets and to get export strategies in their business plans.”
Virginia’s commitment doesn’t end with the report, says Malawer. The new Virginia governor, Terry McAuliffe, wants to devote an additional $2 million to the Global Defense Initiative and related projects next fiscal year with new monies from the U.S. Department of Defense and the Virginia General Assembly.
To read the entire report, visit Cyber Security Export Markets: 2014 (Full Report).