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The German Defense and Security Market

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The German Defense and Security Market December 4th, 2019 The German Defense and Security Market An introduction to the Norwegian export opportunities in the market for public security and the Federal Armed Forces in Germany www.innovasjonnorge.no Contents Introduction ................................................................................................................................. 4 Summary: The German Federal Armed Forces ............................................................................... 5 Summary: German public security ................................................................................................ 6 General Structure ................................................................................................................................ 6 Market development ........................................................................................................................... 7 Opportunities ...................................................................................................................................... 7 The German Federal Armed Forces ............................................................................................... 9 General development .......................................................................................................................... 9 Maintenance of material ................................................................................................................... 10 Investments ....................................................................................................................................... 11 Procurement ...................................................................................................................................... 12 Norwegian procurement projects ................................................................................................. 13 Global Growth Industrial Cooperation .............................................................................................. 14 Activities during the project .......................................................................................................... 14 Take-aways from the project ........................................................................................................ 15 Possible next steps for Innovation Norway ................................................................................... 15 Conclusion ......................................................................................................................................... 15 German public security ............................................................................................................... 17 Industry structure .............................................................................................................................. 17 Description of authorities .................................................................................................................. 19 The Federal Intelligence Service .................................................................................................... 19 The Federal Police Force (Bundespolizei) ...................................................................................... 20 The Federal Bureau of Investigation (Bundeskriminalamt/BKA) .................................................. 22 The Federal State Police (Landespolizei) ....................................................................................... 23 The Federal Customs Service/Force (Bundeszollverwaltung/Zoll) ................................................ 25 Courts and jurisdictional facilities ................................................................................................. 25 Civil Security, disaster control authorities and emergency response groups ............................... 28 Innovation and trends ....................................................................................................................... 28 Procurement on federal state level ................................................................................................... 30 Procurement on the federal level ..................................................................................................... 31 Procurement for courts and jurisdictional facilities .......................................................................... 34 EU funding schemes .......................................................................................................................... 35 Public tender processes..................................................................................................................... 35 Opportunities for Norwegian enterprises ......................................................................................... 36 References ................................................................................................................................. 37 Innovasjonnorge.no Page | 2 Tables Table 1: Investments in the Federal Armed Forces 2019. ..................................................................... 12 Table 2: Planned armament investments ............................................................................................. 12 Table 3: Budget allocation to public security and order 2018-2020 ..................................................... 31 Table 4: Distribution of expenses within public security and order after category .............................. 32 Table 5: Procurement in public security and order in 2019 .................................................................. 33 Figures Figure 1: Number of personnel in the German Federal Armed Forces from 1989 to 2023 .................... 9 Figure 2: Development of the budget of the German Federal Armed Forces from 1955 to 2015 ....... 10 Figure 3: Maintenance budget for the Federal Armed Forces from 2012 to 2017 ............................... 11 Figure 4: Military procurements 2012 – 2017 ...................................................................................... 11 Figure 5: Future investments distributed among programs in percent (2019 – 2026) ......................... 13 Figure 6: Police officers for each federal state in 2017 ......................................................................... 17 Figure 7: The structure of the public security forces ............................................................................ 18 Figure 8: System of separation of powers and structure of administration ......................................... 26 Figure 9: Total number of prisons and for each federal state in 2018 .................................................. 27 Figure 10: Procurement units Bavaria Police ........................................................................................ 30 Figure 11: Budget allocation to public security and order in Germany 2018-2020 .............................. 31 Figure 12: Distribution of expenses within public security and order after category (2020) ............... 32 Figure 13: Overview procurement 2015-2019. ..................................................................................... 33 Figure 14: Procurement contracts in sectors 2018. .............................................................................. 34 Innovasjonnorge.no Page | 3 Introduction With new challenges arising from a changed national and global security situation and increased digitalization, there is need for disruptive innovations. Norway already has a strong defense cooperation with Germany and Norwegian procurement from German suppliers leads to increased economic activity in Norway through commitments from the foreign suppliers. However, there are also opportunities for Norwegian companies to reciprocate and offer solutions in the German defense and security market. Germany is a highly industrialized country with high security budgets and is open to high-tech niche solutions from small businesses as well as reliable providers of consumer products. In this report, market opportunities in, respectively, the German Federal Armed Forces and the public security market will be assessed. Both markets have exhibited a sharp growth over the last years and are subject to large future investments. The main aim is to acquaint Norwegian companies in relevant sectors with the structural conditions and provide a starting-off point in the process of entering the German market. In the first section, an executive summary of each of the two markets provides insights into the key trends and the export opportunities for Norwegian businesses. Thereafter, a more in-depth analysis goes through the industry structure, market size in different fields and explains how a Norwegian company, in general, can proceed to successfully enter the German market. Innovation Norway is continuously working to gain more insight into this field and has already built relevant knowledge and a network to support Norwegian companies within this business area. For more information and assistance, please contact our experts. Contact Arne Lueders Manuel Kliese Senior Advisor, Export Norway Department manager Innovation Norway, Germany Innovation Norway, Germany [email protected] [email protected] Innovasjonnorge.no Page | 4 Summary: The German Federal Armed Forces From the peak at the time of the German reunification in 1990, German spending on defense naturally subsided. In 1990, the number of soldiers was 521 000,
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