Regional spending is to surpass $100bn, but defence and aerospace companies have trouble navigating the local industrial landscape.
New window to the defence sector
With defence spending in the Middle East expected to surpass US$100 billion (Dh367.3bn) by 2014, much of that coming from the GCC, the region has no problem attracting the interest of top defence and aerospace companies. But the companies themselves, many of whom are accustomed to working in more developed markets that have historically been the world's big military spenders, often have trouble navigating the local industrial landscape once they get on the ground, according to Matthew Cochran, the founder and chairman of the recently launched Defense Services Marketing Council.
"I find that a lot of people are wasting their bidding proposal money because they haven't taken the time to do their homework," he said. "They parachute in, send a business development representative without the tools that he needs. He certainly has the skills and has probably been very successful in Europe for his company, but when he comes here there has not yet been the transparency that there has been in France or Germany."
For example, there are laws in the US and UK that allow defence contractors to see who bid on previous contracts. As well, e-mail alert systems have been set up to inform contractors of upcoming projects and to explain requests for proposals. The result is clarity about what projects are in the pipeline and the ability to easily form consortiums with other companies in order to keep costs down and win bids.
In the UAE, by contrast, the bulk of information about the defence and aerospace industry happens in two bright biennial flashes: at the Dubai Airshow and the International Defence Exhibition and Conference (IDEX) in Abu Dhabi. In between those events, there was often a lot of "rumour and conjecture", Mr Cochran said. "The momentum was never carried effectively from one IDEX to the next Dubai Airshow," he said. "So you have this vast 24 months between these major shows.
"For those middle months, [defence marketing] had to happen at restaurants or at other councils, like the British Council or the American Council. But you'd have to have a sideline conversation. What I wanted to do was make the sideline conversation the focus." So Mr Cochran, who by day works as the director for business development and commercialisation at Al Taif Technical Services, began what he admits is a "second full-time job".
He created an entity that could help guide the many defence and aerospace firms seeking work in the region. The council launched in May as an invitation-only organisation of business development, public relations and marketing executives who represent defence-related companies that do business throughout the region, with an initial guest list of about 60 people. Today, it boasts 340 members, representing more than 100 companies. These range from local firms such as the various defence-related Mubadala Development companies such as Al Taif, Abu Dhabi Ship Building, Abu Dhabi Aircraft Technologies and Injazat, to global players such as KBR, DynCorp International, L-3 Communications and Lockheed Martin.
For an annual fee of Dh15,000, council members receive access to the full contact list of other members and prospective members, monthly presentations and forums, exclusive events and, soon, customised research developed by think tanks. Frost and Sullivan, the consultants whose report released this month came up with the $100bn regional defence spending figure, will kick off the first think tank next month.
Mr Cochran plans to expand the council's research dimension into a full online presence next year, complete with social networking features and a comprehensive archive of defence-related articles. "When I came here six years ago, you could not find data on the local defence market," he said. "Ultimately, I hope to roll out a resource, a library online that will capture articles both past and present."
His broader ambition is that this networking and transparency will serve as a kind of incubator for the defence industry in the region, which he believes is already beginning to see the UAE in general and Abu Dhabi in particular as fertile ground for their intellectual property. "I believe that the defence industry is moving so quickly here now, that the military industrial complex in the West is really going to be put on its heel by what they are building here," he said.
"Nowhere else in the world are they simultaneously building aircraft, ships and land systems that are also getting the maintenance, repair and overhaul they need and the component manufacture that is then re-exported. That traditionally was only done in the West." email@example.com