How the US Stimulus Impacts Video Surveillance

Author: John Honovich, Published on Feb 19, 2009

With a deepening recession, many hope that the newly passed US stimulus will bolster the weakening video surveillance market. Given the sheer size of the stimulus ($787 B USD) and the desire to spend it ASAP, the spending has the potential to help local and international video surveillance companies.

Here are a few key background resources on the stimulus and its breakdown:


  • The actual spending on video surveillance from the stimulus will be quite small - likely to be in the range of $150 - $250 M USD total spent over 2 years.
  • While the government is focused on spending the money immediately, the timing of projects likely puts the execution of most video surveillance projects in 2010.
  • The recession stimulus package is far less important financially to the video surveillance industry than continued Terrorism related spending.

At a macroeconomic level, the stimulus could benefit all industries by stopping the spiral of decreasing spending and investment. The government will 'stimulate' demand and incent the private sector to start spending. On the other hand, there are deep questions about the long term impact of the increasing debt needed to pay for it. For the long term, this tradeoff needs to be examined carefully.

In the short term, the stimulus package will have little impact on the video surveillance industry. It is likely to be no more than a 2-3% increase in annual US video surveillance spending (given that overall US video surveillance spending by end users is in the $6 - $8 Billion USD range).

Size of Spending on Video Surveillance

Estimating the size of spending from the stimulus requires us to make certain assumptions. Specifically, we need to determine how much money is available for video surveillance out of larger disbursements. For example, over $100 Billion USD will be spent on education. but almost all of it is in non security areas. Unless we examine more closely and segment the spending, we will vastly over-estimate the potential impact.

Within each sector (education, health care, transportation, etc.) we will isolate specific disbursements that may be used for video surveillance and then estimate what portion of the disbursement is likely to go to video surveillance.

The best directory I have found breaking down the overall bill is at Probublica which offers a comprehensive breakdown and explanation of spending and tax cuts. I'd encourage you to scan through this. When you look at the detailed breakdown it's hard to find many direct applications to video surveillance. Moreover, so much of the spending is to simply keep municipal governments solvent and to help stabilize those hit by the recession.

Here are some specific items that could help video surveillance:

  • Southern Border and High Intensity Drug Traffic: $30 Million
  • Rural Drug Crime Program: $125 Million
  • Education for the disadvantaged - school improvement: $3 Billion
  • School Improvement Programs: $65 Million
  • Defense Department Facilities for various commands: $4 Billion approximate
  • Border Stations and Land Point of Entry: $300 Million
  • Border Security Fencing, Infrastructure and Technology: $100 Million
  • FEMA Port Security Grants: $150 Million 

These programs total approximately $8 Billion. In addition, there is about $40 Billion in funding for transportation including $26.7 Billion for highway infrastructure investment. However, these are general transportation projects that will be overwhelmingly spent on non-security expenditures.

Exactly how much will be spent on video surveillance will certainly be hard to tell. Nonetheless, it is reasonable to assume only a small fraction (1/20th to 1/200th) of these appropriations will be spent on video surveillance because almost all of these items are much broader than security.

Timing of Spending

Given that almost all of these items are general construction/infrastructure projects, it is likely that most of the associated video surveillance projects may not be deployed until 2010. Generally in construction, video surveillance is one of the last systems deployed (because it depends on electrical and newtorking infrastucture, etc.) Even if the general projects are started in the next few months and are rapidly accelerated, it will take some months to get to most of the video surveillance portions. The key exceptions to this would be the Port Security and Border fencing initiatives.

Relative Importance of Terrorism Spending

Compared to what we can expect from the stimulus, terrorism related spending on video surveillance has been far greater over the last 6 years. The amount of funding for Homeland Security has averaged $50 B USD per year. The total spending on the Iraq war is estimated at $600 B USD to over $1 Trillion USD. This is only the direct spending. The fear of terrorism and increased regulations for critical infrastucture has resulted in billions more being spent by the private sector (e.g., utilities) and local/state goverments.

Making this spending even more important is the much higher precentage of it that is dedicated to video surveillance than the general infrastructure spending found in the stimulus. 

In comparison, this 'stimulus' is not much of a stimulus at all compared to the drivers for video surveillance over the past few years.

There is minimal upside from the US stimulus package but significant downside for the industry if terrorism spending is reduced. Such reductions may accelerate depending on the withdrawal from Iraq as well as general economic pressures de-prioritzing terrorism.

Recommendations

There will certainly be some video surveillance projects for the video surveillance industry and, to the extent, that these projects fit your product or geographical focus, you obviously should purpose. Nonetheless, you should be conservative in estimating the significance of the positive impact that the stimulus will provide.

2 reports cite this report:

Targeting US Stimulus Funds for Transportation Deployments on Aug 30, 2009
Cisco has released a whitepaper making the case for Cisco centric security solutions for transportation deployments. Specifically, the paper...
Is the Video Surveillance Business Starting to Improve? on Apr 07, 2009
In the last month, a renewed sense of optimism has emerged in the video surveillance industry - mirroring the rise of the global stock markets and...

Most Recent Industry Reports

H.265 Usage Statistics on Apr 19, 2019
H.265 has been available in IP cameras for more than 5 years and, in the past few years, the number of manufacturers supporting this codec has...
ACRE Acquires RS2, Explains Acquisition Strategy on Apr 19, 2019
ACRE continues to buy, now acquiring RS2, just 5 months after buying Open Options. One is a small access control manufacturer from Texas, the...
Access Control Course Spring 2019 - Last Chance on Apr 19, 2019
Register for the Spring Access Control Course. IPVM offers the most comprehensive access control course in the industry. Unlike manufacturer...
Riser vs Plenum Cabling Explained on Apr 18, 2019
You could be spending twice as much for cable as you need. The difference between 'plenum' rated cable and 'riser' rated cable is subtle, but the...
Verint Victimized By Ransomware on Apr 18, 2019
Verint, which is best known in the physical security industry for video surveillance but has built a sizeable cybersecurity business as well, was...
Milestone Drops IFSEC on Apr 18, 2019
Milestone has dropped out of Europe's largest annual security trade show (IFSEC 2019), telling IPVM that they "have found that IFSEC in EMEA no...
The Fastest Growing Video Surveillance Sales Organization Ever - Verkada on Apr 17, 2019
Verkada has the fastest growing video surveillance sales organization ever. In less than 2 years, they already have more salespeople in the US...
Door Operators Access Control Tutorial on Apr 17, 2019
Doors equipped with door operators, specialty devices that automate opening and closing, tend to be quite complex. The mechanisms needed to...
Securadyne CEO: IPVM 'Entertaining For An Ignorant Few' on Apr 16, 2019
Securadyne's CEO Carey Boethel is unhappy with IPVM's report - Failed Integrator Rollup, Securadyne Sells to Guard Giant Allied. Indeed, he...
Dahua Repositionable IR Multi-Imager Camera Tested on Apr 16, 2019
Dahua has released their first repositionable multi-imager camera, the Multi-Flex 4x2MP, claiming integrated IR, true WDR, and flexible...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact