creation of an integrated ums & cybersecurity ecosystem report on the opportunities and barriers...

Creation of an integrated UMS & Cybersecurity Ecosystem

Report on the Opportunities and Barriers for the Unmanned Systems Industry in

Virginia.

Peter Miles GENEDGE

October 2015

TABLE OF CONTENTS

Project Background

TDMI Methodology

Summary of Findings and Results

Cyber Security Awareness in the UMS Markets

Conclusions

At the request of the Virginia Office of Technology an industrial research project was conducted to review the Opportunities and Barriers for the Unmanned Systems Industry in Virginia.


Step 1

The Secretary of Technology of the Commonwealth of Virginia sought answers to two questions:

1. What value propositions does the Commonwealth of Virginia offer to the unmanned systems (UMS) market?

2. What steps should be taken to activate those value propositions?

Project Background

TDMI Methodology

Summary of Finding and Results


Conclusions

TABLE OF CONTENTS

Convene project team

Characterize unmanned

systems industry

Understand companies’ barriers and

opportunities

Identify Virginia assets

and gaps

Articulate Virginia’s

value propositions and actions

1 2 3 4 5

Five Step TDMI Process For a company looking to sell their new product or service, the traditional TDMI approach (Technology Driven Market Intelligence) researches and identifies the market opportunities available.

In this case we are looking at how the State of Virginia can support the growth of a regional industry (multiple companies) supporting a new, emerging market.

The five steps above indicate the process sequence that was used .




systems industry


opportunities


and gaps



1 2 3 4 5

Step 1

The National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) centers are located in all 50 states and Puerto Rico. The MEP is a national network with hundreds of specialists who understand the needs of America's small manufacturers.

GENEDGE, the Virginia MEP, helps its clients generate a sustainable, competitive edge through strategic growth and process improvement services. GENEDGE enables companies to stay ahead in competitive and rapidly changing markets.

RTI International is one of the world’s largest independent, nonprofit research institutes. Headquartered in Research Triangle Park, North Carolina, with a staff of 3,700 worldwide, our mission is to improve the human condition by turning knowledge into practice.


Project Background

TDMI Methodology

Summary of Findings and Results


Conclusions

TABLE OF CONTENTS



systems industry


opportunities


and gaps



1 2 3 4 5

Step 2: Secondary Research

The UMS industry is supporting a drive towards executing various tasks currently done with manned systems, with cheaper, safer and more effective unmanned systems.

We executed secondary research to characterize market and technology trends within the UMS industry.

The technology is developing rapidly and generating significant interest across many different customer segments.

Determining these market trends, and how to support them is key to understanding the nature of the industry as it grows.


TDMI secondary research was conducted to characterize the extent and diversity of the industry supply chain

To accelerate the growth of an emerging technology-based industry, it is important to understand the value chain associated with itThe actual ‘assembly’ of the UMS vehicles and systems represents just the ‘tip of the iceberg’ of this value chainWe started our work by creating a high level map of the value chain from the customer back up the supply chain to the component level suppliers


Understanding the High Level UMS value chain:

Vehicle Platform(operation of vehicle)

Components Software Subsystems

Mission Application(operation of mission)

SoftwareSensors Delivery Hardware

Support

Operations Maintenance Test Communications Ground Support

Training Legal

OutputUMSData

Collection

UMSPerform

Task

Analysis

OR


AIR• Photography/Cinematography• Survey/Mapping• Surveillance—Inspection• Surveillance—Security

Monitoring—Weather, environmental, crop, and crisis

• Material delivery• Search and rescue• Scientific research• Cargo delivery

GROUND• Photography/Cinematography• Surveillance• Material handling• Transportation• Search and rescue• Scientific research• Environmental monitoring• Firefighting, crisis response• Cargo delivery• Vehicle road and safety testing

MARITIME• Survey• Surveillance—Inspection• Surveillance—Security• Telecommunication• Search and rescue• Cargo delivery• Scientific research• Environmental monitoring

UMS can take on roles that are traditionally high-risk for humans.


Understanding the Market Opportunity GLOBAL MARKET GROWTH

• 57 countries and 270 companies were involved in the creation of UAVs in 2013. The USA is the lead country in many categories. • Israel is the second largest UAV manufacturer and the

largest exporter, selling its systems to 49+ countries.• Europe has the second highest share in the UGV

market, prominent in Germany, France, and the U.K. • Asia-Pacific interest in UMS is growing.

UAV UGV ROV AUV $-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

0%

5%

10%

15%

20%

25%

30%

35% $6.70

$1.51 $1.20 $0.46

UMS Market Value and Growth

Valued in 2014 (Billions USD) CAGR until 2020

Aspects of research included:• Determining the roles and

tasks to be performed by UMS• The current manufacturing

and research efforts across the globe

• The similarities and differences between military, government, commercial and retail markets

• Estimates of growth rate by domain: Air/Ground/Sea

• Obstacles to growth in the USA and globally.

Step 2


Source: Markets and Markets 2014



systems industry


opportunities


and gaps



1 2 3 4 5

Step 3: Primary Research

In order to understand the barriers and opportunities faced by UMS companies it was key to execute significant primary research though direct interviews.

Because there were other efforts ongoing to conduct a survey of unmanned systems companies in Virginia, we focused our initial primary research on organizations across the USA, including some with global reach.

It was clear that the #1 obstacle for the

UAS industry was the lack of clear regulation from the FAA. We decided to concentrate on obstacles beyond that.

Step 3


UMS company surveyAspects of research included:Identifying obstacles or challenges to growth on a company by company basis. (Beyond legislative issues) • Funding opportunities• Determining the characteristics

of the ‘ideal location’ for UMS companies

• The speed of technological advancement and its impact on commercialization

• Awareness of cybersecurity risks to this industry

We conducted semi-structured interviews with 36 representatives of unmanned systems companies and suppliers, asking open-ended questions like: • What trends or signals are you seeing in

unmanned systems? • What are the biggest opportunities? • What are the biggest needs or gaps? • How might states encourage growth?

The majority of the interviews were conducted at the 2015 AUVSI conference in Atlanta, Georgia in May , and were, for the most part, with owners of smaller companies or with C-level executives of larger organizations.


Company Size (by employee #)• 16 small (< 50)

• 15 medium (50-499)

• 5 large (500+)

Value Chain• 12 platform manufacturers

• 16 component manufacturers

• 8 service providers (training, legal, 3D printing, maintenance, and data analysis)

Area of Focus• 19 air

• 1 ground

• 3 maritime

• 13 multiple

GENEDGE and RTI interviewed 36 companies throughout the UMS value chain to understand challenges and opportunities for growth.

InternationalUnited KingdomNorwayIsraelCanada

UMS OVERVIEW


UMS Company Survey FindingsThe data collected was affinitized, by grouping responses under common themes. The results were then arranged in a Pareto Chart to provide a rank ordered listing of challenges as seen by UMS companies

Cybersecurity

Expense of test sites

Supply chain

Proximity to customer

Sequestration

Affordable pricing for commerical applications

Power/increased endurance

Funding

Workforce

Technology still developing

Public awareness and acceptance

0 2 4 6 8 10 12

1

1

1

2

2

2

2

2

1

1

2

2

2

3

3

3

3

2

4

1

2

2

5

3

3

3

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5

5

Small (<50)

Medium (50–499)

Large (>500)

Challenges to Growth (Exc. FAA Regulations): Number of companies who noted challenge




systems industry


opportunities


and gaps



1 2 3 4 5Creation of an integrated UMS & Cybersecurity Ecosystem

Step 4: Primary and Secondary Research: Determining the assets and supporting infrastructure that UMS companies have access to in Virginia was key to this effort. Using both primary and secondary research, these assets were identified and characterized.Follow up interviews with representatives of many of these assets were conducted to establish their current connection to the UMS industry and investigate their plans to support the UMS industry into the future

We developed our assertions about the Virginia UMS assets, opportunities, and gaps. Assets included:• Large number of test sites• High concentration of retired military personnel • Research institutions • Adjacent industries such as Data Analytics and Modeling and

Simulation• Proximity to prime customers• Export programs (VALET)


Creation of an integrated UMS & Cybersecurity EcosystemGeographical dispersion of UMS related assets in Virginia

Test Sites: Blue Symbols Research Institutes: Yellow SymbolsMilitary Resources and retired personnel: Red Counties Academic training institutions: Red symbolsUnmanned IP data base search localities: Purple symbols Large UMS OEMs and UMS customers: Green symbol



systems industry


opportunities


and gaps



1 2 3 4 5

Step 5: Recommendations

We checked our assertions about the status of UMS in Virginia with another round of interviews, this time directly contacting organizations within the State. We spoke with 10 people, including representatives of the FAA-designated test site, the Virginia Economic Development Partnership, and various Virginia unmanned systems companies.

We were able to confirm that being present in Virginia was considered a major asset by those already here, and that the assets we had identified were indeed important.

Finally, we consolidated our findings about the unmanned systems industry, key technologies and the status of Virginia assets and ecosystem. This resulted in a report containing key findings and recommendations.


Project Background

TDMI Methodology and Findings

Summary of Results


Conclusions

TABLE OF CONTENTS

UMS Cyber Security: The risks.Among Cyber Security professionals there is a basic assumption that in order for the UMS industry to be successful and sustainable it will have to be cyber secure.Three key questions to be asked are: Is the nascent commercial and retail UMS industry… aware of the basic risk of failing to embrace the need for a cyber secure

research, development, production and operating environment? aware of cyber threats beyond theft or corruption of their data? (E.g. direct

intrusion into cyber - physical systems during the construction or operation of unmanned systems)

creating a ‘pull’ for cyber secure ‘components’ along its supply chain, based on any emerging requirement (?) from the end users of UMS technology?


Cyber Security: The survey says… Only one company in the survey (one of the >500 employee

companies) mentioned that ‘cybersecurity’ was one of the key challenges they faced, without any prompting.

Even when prompted (“How about cyber security?”), most responded that they did not see this as a problem.

Those who were aware of cyber security issues (mostly DOD suppliers) typically responded as follows: o “Our IT takes care of it” o “We encrypt our IP data”o “We are DoD Information Assurance Certification and Accreditation

Process (DIACAP) compliant and have Authorization To Operate (ATO) certification, so we are OK”

o “We are International Traffic in Arms Regulations (ITAR)-compliant”


Project Background

TDMI Methodology and Findings

Summary of Results


Conclusions

TABLE OF CONTENTS

Conclusions from our TDMI research.The intent of our research into the UMS industry was focused on challenges as seen by the industry in general and was not directed at cyber security issues specifically. Virginia is well placed to support an emerging UMS industry

particularly along the UMS supply chain and with key support services and strong adjacent industry resources.

However, the results of our survey suggested that cyber security was not seen, at this time, to be a high priority issue or an immediate obstacle to success by the majority of UMS companies we talked to.


Thanks


creation of an integrated ums & cybersecurity ecosystem report on the opportunities and barriers...

Documents

value chain

virginia creation

supply chain

value propositions

virginia mep

commonwealth of virginia

unmanned systems ums

state of virginia