By RAMONA KUNDT
BRUSSELS – The EU’s recent action plan to consolidate Europe’s fractured security industry is broad and very ambitious. One of the first tests of its ability to overcome national markets barriers will be plan’s objective to implement harmonised certification for the sector.
Two legislative proposals to create EU-wide harmonised certification systems, for example are in the European Commission’s pipeline: one for airport screening equipment and the other for alarm systems. The Commission estimates these measures will save up to EUR 29 million per year in testing and certification costs. A stakeholder consultation on the two proposals will be launched by the end of 2012.
The EU’s three standardisation entities of CEN, CENELEC and ETSI will have key stakeholder roles for several crucial parts of the plan. For example, the Commission will ask them to establish detailed roadmaps to focus on the standardization needs of the security sector’s next generation of tools and technologies. Divergent national approaches have produced 27 disjointed security markets across the EU, with negative consequences for supply and demand.
Unveiled in late July, the industrial action plan aims to harmonise standards and certification rules for security technologies; exploit synergies between civil security and defence research to reduce duplicate spending on technologies that serve both sectors; introduce novel funding schemes such as “pre-commercial procurement” to validate the operational results of EU security research projects; and introduce early societal-impact reviews of new security technologies at the research stage.
If successful, such measures could help remove the market barriers to innovation and economies of scale, smooth the way for more small and medium-sized companies to enter the marketplace and thus strengthen cross-border supply chains and, tellingly, help foster an “EU brand” for the sector. Here, EU policymakers have a nervous eye on the US and China – the two regions whose civil security markets and players are set to compete fiercely with Europe.
Stakeholder consultations were organised by the Commission to identify the underlying drivers of Europe’s market fragmentation, namely:
- the absence of clearly defined EU-wide performance standards for equipment
- the lack of EU-wide certification systems and mutual recognition schemes, which imposes costly and lengthy certification processes in each country where a company commercialise its technologies
- delays in certification procedures which can cause technologies to be outdated before they receive approval
Several flanking measures will support the action plan. To reduce the existing gap between research and the marketplace, the Commission wants to use the new intellectual property rules in the EU’s next seven-year research budget known as Horizon 2020. The rules are under review to give more IPR control to the Commission and member states over certain security technologies. Border security and aviation security seem to be the most promising target areas in this respect.
Pre-commercial procurement would also enable end-users to play a more central role in the innovation process via the purchase of researched technologies. This approach would bring together industry and public end-users from the very beginning of research projects to develop technologies that can be operationally tested under temporarily suspended market conditions before throwing open procurement to full competition. A significant part of the EU security research budget will be set aside for this purpose.
Elsewhere, the risk of third-party liability for security industry products and services was also identified as a potential barrier to innovation. To tackle this, the Commission has launched a tender for a major study on the legal and economic implications of establishing limits on third-party liability. The study will also review possible alternatives such as a voluntary industry fund or Commission recommendation or other options.
Finally, the action plan addresses the issue of linking “societal considerations” to technological requirements. This is EU-speak for concerns about the data protection and personal privacy implications of technology. Thus, the action plans call for efforts to ensure that ‘privacy by design’ and ‘privacy by default’ are adequately wrapped into technology at the design phase. The Commission will create a dedicated expert group to monitor policy measures and steer the debate across all relevant actors in the security field.
Two things risk undermining the plan’s impact, however: industrial squabbling for market share and time. Europe’s security market is not fragmented solely because of divergent rules and regulations. Many of the same cosy supplier relations at local and national level afflict the security sector as those that keep Europe’s defence sector boxed off into national markets. Currently, Europe’s security lobby is nowhere as organised as its defence equivalent but if it does move in that direction: watch the package’s effects get diluted.
The action plan’s other adversary is time, both internal and external to the EU. Internally, EU certification and harmonisation measures move at a snail’s pace. Getting anything off the ground in less than five years – the very minimum for this sort of thing – would be nothing short of miraculous. Meanwhile, externally the US and China will be digging into their planned export markets.
Ultimately, the action plans’ success will depend on national governments’ willingness to support the creation of an EU internal market for security technology.