An article from the GSC Team about closing security gaps

Germany: €123 million. EU: €1.4 billion. Closing Homeland Security Gaps: Priceless.

by Janeen Chupa and Simon Schneider

It started out simply enough – two graduate students with some free time and a desire to do good. What we ended up learning was a pretty substantial lesson; that European governments need to change their thinking when looking for innovation in security technologies to protect our airports, cities and borders.

Evolving Threats
Everyone understands that technologically the threat is diverging, becoming both more simplistic (eg roadside IEDs) and more technologically advanced (eg cyberattacks). And while a technological response is not a panacea it can help. In recent years, many of the gaps have been shared with the public as NATO, EU and even MI5 complained about the evolving technological advances of the threats they face.

Last November, the Director General of MI5, Dame Eliza Manningham-Buller, illustrated these advancing threats in a speech, stating “today we see the use of home-made improvised explosive devices; tomorrow's threat may include the use of chemicals, bacteriological agents, radioactive materials and even nuclear technology.”

While governments aim to involve the private sector in the creation of advanced security technologies, entrepreneurs, often the truest innovators, are left aside. Not only is it a challenge to find security startups in Europe, the ones we met complain about large hurdles as they try to sell to government entities with long procurement cycles causing cash flow problems. They also face not having access to venture capital, especially in Europe, which hurts even more as they have to put in much more time and money in research than a web 2.0 startup.

So it seemed to us and everyone else that finding the developers and giving them money for research should solve the problem.

The European governments seemed to agree with that analysis as they earmarked large funds for security research. The German government announced it will spend additional €123 million on research in the coming years. While the EU also just allocated €1.4 billion funding for security research in technology solutions for civil protection, bio-security, protection against crime and terrorism in its EU Framework 7.

We originally thought that finding these technologies would be the hard part and if we could bring together the truly innovative with those who support such work, then these technologies would make it to market. So one year ago we initiated a business plan competition called the Global Security Challenge to bring attention to the best technologies by bringing together the innovators, venture capitalists and customers.

We assumed the disconnect would lie between scientists and policy makers and that finding the right innovators to fund would prove to be quite a challenge. It does take a lot of work and grass-root efforts, but they can be found.

Innovation Gaps
The actual problem is that there is a missing step between researching and implementing technological innovation. Infant ventures need as much focus and nurturing as researchers and yet there is a dearth of support. As business students we were stunned that market measures that typically bring about necessary advancements were not being used in homeland security market. This isn’t what we learned in the classroom, in particular when there was so much money to be made.

So what we’ve come to believe is that supporting entrepreneurs should play a critical role in any security technology policy, particularly as we see the scope of threats increasing.

The US has taken the first step in the right direction by creating a dedicated incubator for security technologies through the help of the NSA. In Europe there have been many calls by security leaders for a similar type of organization. Tom Enders, the former CEO of EADS acknowledges this gap when he said in speech at the European Defence Agency last year that, “We need a technology incubator to generate breakthrough approaches.”

Innovation is going to come from the entrepreneurs and no one can afford to wait for good ideas to make it through the maze that is the current European homeland security market – if they make it at all. Which leaves the question, how will Europe nurture its innovators?

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Simon Schneider and Janeen Chupa are MBA students at London Business School and founders of the Global Security Challenge, the biggest business plan competition in the world. Download this article in a PDF Format