SIC 3812

This category includes establishments primarily engaged in manufacturing search, detection, navigation, guidance, aeronautical, and nautical systems and instruments. Important products of this industry are radar systems and equipment; sonar systems and equipment; navigation systems and equipment; countermeasures equipment; aircraft and missile control systems and equipment; flight and navigation sensors, transmitters, and displays; gyroscopes; airframe equipment instruments; and speed, pitch, and roll navigational instruments and systems. Establishments primarily engaged in manufacturing aircraft engine instruments or meteorological systems and equipment, including weather tracking equipment, are classified in SIC 3829: Measuring and Controlling Devices, Not Elsewhere Classified.

NAICS Code(s)

334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing)

Industry Snapshot

In 2001, more than 250 companies in the United States were involved in the manufacture of search and navigation systems and instruments. Together, these companies shipped $31.9 billion worth of goods while employing 153,710 people in the process.

Decreased defense budgets, the end of the cold war, and diminished commercial aircraft industry purchases all contributed to annual declines throughout the 1990s. Sharp reductions in the military-related expenditures that formed the backbone of industry profits led to a flurry of acquisition and merger activity among many of the major companies in the field. The consolidation within the industry led to a reduction of its production workforce at an annual rate of 10 percent throughout much of the decade. The pace of workforce reduction showed signs of slowing during the late 1990s and began to improve in the early 2000s.

The United States was expected to continue leading the world in new technology in this market for years to come. In early 2003, the U.S. Air Force was in the process of spending $1.7 billion to upgrade the Global Positioning System (GPS), along with the Milstar and Defense Satellite Communications Systems as the nation entered war with Iraq. The civilian sector, which remained a lucrative market for new technology, stood to benefit from this upgrade. This circumstance was especially true of instruments relating to GPS and innovative automobile navigation and safety systems. The United States was also expected to continue to be the leading exporter of search and navigation equipment, as other countries sought to upgrade their air safety and NATO allies continued to procure the latest defense technology.

Organization and Structure

With few exceptions, the principle suppliers of search and navigation equipment are the same contractors who comprise the larger U.S. aerospace and defense industry, to which search and navigation equipment contribute significantly. Although not necessarily the most prolific producers of search and navigation instruments, many of the largest and most recognizable corporations in the United States have been involved in the business, including AT&T, Boeing, General Electric, General Motors, and IBM.

Along with such aerospace sectors as the business and commercial jet, helicopter, aircraft maintenance, and spare parts industries, the search and navigation industry comprises a so-called "niche segment" of the larger aerospace manufacturing group. A substantial majority of the industry's product types fall into the avionics (aviation electronics) product classification, which includes aeronautic radar systems, air traffic control systems, weaponry sighting and fire control systems, and autopilots. Product groups traditionally associated with the avionics industry but excluded from the search and navigation industry include flight trainers and simulators, which are included in SIC 3699: Electrical Machinery, Equipment, and Supplies, Not Elsewhere Classified; and radio communications equipment and telemetry systems and equipment, which is classified under SIC 3663: Radio and Television Broadcasting and Communications Equipment. But product groups classified as search and navigation industry products but excluded from the avionics industry's product mix include such nautical instruments as fathometers, hydrophones, sonabuoys, marine sextants, sonar fish finders and other sonar systems, and taffrail logs (torpedo-shaped instruments dragged behind ships to determine distance traveled or speed).

Historically, the primary customer for industry products has been the U.S. government—in particular the Department of Defense, Federal Aviation Administration, and National Aeronautics and Space Administration. Industry sales to commercial establishments adhere to the traditional terms and conditions of the business marketplace, and products are evaluated in terms of competitive value for technical superiority, reputation, price, delivery schedule, financing, and reliability. Sales to the federal government, however, tend to follow a highly specialized and structured set of procedures.

Government Procurement. Funds for government search and navigation equipment contracts are authorized by Congress based on budget requests submitted by the executive branch for the agency or department requiring the equipment. Congress appropriates specific funding for programs on an annual basis, which often means that programs originally approved for development over several years are subject to adjustments or outright cancellation on a yearly basis. Contractors submit bids to government officials at bidding conferences attended by "prime" contractors—firms or consortia who submit the final integrated system directly to the end-user agency—and subcontractors who attend the conferences to seek out prime contractors with whom to team.

Contracts may be awarded to a single contractor in a "winner-take-all" competition or divided among several contractors or consortia as a percentage of the total awarded contract. Contracts may cover specific phases of the product development process: the concept/design or project definition stage, the prototype or demonstration/validation stage, or the execution or large-scale production stage. Government contracts are also awarded according to the method by which the contractor is paid. In cost reimbursement contracts, the contractor is paid for allowable or "allocable" costs such as engineering and manufacturing expenses, special tooling and test equipment costs, marketing and administrative expenditures, and the cost of the bid proposal itself. Cost plus fixed fee contracts involve payments to the contractor by the government of a preestablished fee regardless of the firm's actual final costs. Such contracts award contractors who deliver systems below the contracted price and penalize contractors who experience cost overruns. In cost plus incentive fee contracts, the government reimburses the contractor based on the firm's ability to meet certain targets such as cost guidelines, "mission success" parameters, and delivery time constraints. The average industry "win rate"—the ratio of contracts awarded to total contracts bid on—is about 25 percent in the aerospace and thus the search and navigation, industry as a whole. Some firms, however, achieve win rates nearly twice as high.

Contractors are generally paid through periodic "progress payments" for work performed with a final payment for remaining costs paid upon delivery of the product. Contracts may be extended through "replenishment" and "follow on" orders by the government customer and may be terminated without cause at the sole discretion of the government. Disputes regarding unpaid or overpaid amounts are handled by a Defense Contract Management District Termination contracting officer to whom settlement proposals are submitted by the contractor for claimed expenses and "termination costs." The contracting officer may award the contractor funds for work performed prior to the contract's termination or may require that the contractor reimburse funds paid out for canceled work.

The "monopsonic"—or single customer—nature of the government procurement market has led to a unique division of operations in the search and navigation industry: one set of rules and procedures for commercial clients and a second, completely segregated set of rules and procedures for government contracts. The purpose of the complex government procurement apparatus is to protect the government's interest in fair and reasonable prices, to eliminate contractor fraud, to ensure equal access by all bidders, and to guarantee that federal funds appropriated for government contracts reflect the economic and social priorities of the government. As a result, the process of bidding on federal contracts entails separate data collection and accounting procedures, conformance to supplier network requirements, adherence to hiring and personnel guidelines, and the disclosure of the contractor's corporate financial information to government auditors. These and other requirements regarding contractor certification and auditing and oversight conformance have resulted in historical labor costs for the industry, three times higher for federal contracts (as a percentage of sales) than for equivalent commercial contracts.

Procurement Agencies. Several government agencies perform oversight and other procurement-related functions that directly affect search and navigation industry activities. The Defense Contract Audit Agency oversees expense, scheduling, and product performance reviews of industry contractors and specifies guidelines for planning and implementing federal contracts. The Government Accounting Office (GAO) and Office of Federal Procurement Policy of the Office of Management and Budget perform watchdog reviews of government contracts. "First tier" contractors—firms whose products are delivered directly to a prime contractor—may experience as many as 100 government audits in a single year for pricing, quality, and safety reviews. Similarly, an "operational readiness review" administered by a defense department branch can involve as many as 50 auditors assigned to a single contractor plant at one time.

Contractors may be temporarily suspended or permanently debarred from bidding on government contracts if they are found to be in violation of employment practice laws, standard accounting procedures, or product pricing guidelines. A contractor, for example, who falsely claims that a delivered product has passed more tests than it actually has may be given a "not a responsible contractor" designation and debarred from government bids. Improper enhancement of a product's capabilities in order to inflate the contractor's bill is termed "goldplating" and represents another significant area of potential abuse that government procurement oversight agencies monitor.

Other agencies, such as the Navy's Operational Test and Evaluation Force and the Department of Defense's Operational Test and Evaluation Office, perform the tests that gauge the delivered system's adherence to contracted performance specifications. Federal projects like the Army's Contractor Performance Certification Program recognize contractors who consistently deliver quality products, and the NASA-funded National Technology Transfer Center serves as a medium for sharing federal research project advances with firms in the industry.

Prime Contractors vs. Subcontractors. The Competition in Contracting Act of 1984 attempted to make government contracts equally available to all potential contractors. Still, major prime contractors continued to dominate the defense market and thus the search and navigation industry. The consolidation among these contractors as the defense budget dwindled throughout the 1990s had a drastic effect on subcontractors. For instance, AlliedSignal, a major prime contractor, which merged with Honeywell in 1999, planned even before the merger to reduce its number of suppliers from 3,750 in 1997 to 1,200 by 2000. Smaller companies also suffered from Defense Department policies that called for a smaller base of contractors with larger resources than before, giving companies working for the Pentagon special leniency in Justice Department reviews of their acquisitions and mergers. With these larger, more diversified contractors, the Defense Department then began to contract with a single company for an entire system instead of having to share the responsibility as previously.

Business Environment. The unique nature of the government procurement environment entails business trends uncommon in other U.S. industries. Although this industry's profit rates as a percentage of sales have historically been less than for other industries, profits measured in terms of rate of return on investment are comparable to rates enjoyed by other manufacturing sectors. Search and navigation firms, like other defense sector businesses, may invest in plants and equipment at half the rate of firms in other industries because government contracts often reimburse firms for aging or obsolescent equipment, make available government-owned plants and equipment to the contractor, and offer no guarantee that the plant or equipment utilized for the procured product will ever be contracted for again.

The Defense Department also motivates cost consciousness by writing incentives into contracts, basing payments and penalties on the producer's performance. In return for these cost restrictions, the Pentagon only specifies what the product should do, not how it should be built. This term allows the contractors to use more components that are readily available than in previous times, when they would have to create components according to Pentagon instructions. Like members of other defense industries, search and navigation contractors require less working capital because they can rely on regular government progress payments instead of depending on unpredictable commercial revenues.

The search and navigation industry is subject to business risks not shared by other American industries. These include unusually high costs for obtaining skilled employees, intense domestic and international competition, continual need to retrain employees and retool facilities, inevitable cost overruns resulting from untried technologies and advanced designs, and instability in the price of raw materials and supplies. Because defense-related products are driven by the requirement of continuing technological improvement and superiority, the rate of obsolescence for industry products is much higher and much more unpredictable than in other American industries.

Product Groups. Search and navigation products can be divided into two broad divisions and several subcategories. Search and detection systems and navigation and guidance systems and equipment ($29.1 billion worth of shipments in 2001) constitute 91 percent of the total search and navigation market and include the following product groups: light reconnaissance and surveillance systems; identification-friend-or-foe equipment; proximity fuses; radar systems and equipment; sonar search, detection, tracking, and communications equipment; specialized command and control data processing and display equipment; electronic warfare systems and equipment; and navigation systems and equipment, including navigational aids for aircraft, ships, and navigation applications.

The remainder of the industry's market ($2.8 billion worth of shipments in 2001) consists of aeronautical, nautical, and navigational instruments (excluding aircraft engine instruments) and includes the following product groups: flight and navigation sensors, transmitters, and displays; gyroscopes; airframe equipment instruments; thermocouple and thermocouple lead wire; nautical instruments; other aerospace flight instruments; and parts and components.

Light Reconnaissance and Surveillance Systems. This product group includes infrared, ultraviolet, and visible light reconnaissance systems excluding radar systems such as bomber-defense equipment, weapon fire control equipment, infrared fuses, infrared detection and warning systems, and such night vision equipment as sniper scopes, snooper scopes, and night driving equipment.

Radar Systems and Equipment. This category includes airborne, ship-based, and ground-based radar systems such as early warning radar, air defense and fighter control radar, harbor control radar, meteorological radar, highway speed control radar, bomber navigational radar, space satellite tracking radar, precision approach radar, and other forms of tracking radar technology.

Sonar Systems. This product group consists of airborne, surface ship, and submarine-based sonar systems including depth-finding equipment, guidance hydrophones, sonabuoys, sonar fish finders, navigation and mapping sonar, and anti-submarine sonar equipment.

Electronic Warfare Equipment. Electronic warfare systems include such missile-borne and non-missile-borne "countermeasures" equipment as radar jamming devices, underwater countermeasures technology, beamriders, infrared homing systems, specialized signal processing and intelligence equipment, and other "active" counter measures equipment (excluding such passive systems as chaff and windows).

Navigation Systems and Equipment. Included in this category are such navigational aids as beacons, transponders, collision warning systems, inertial navigation systems, radio compasses and direction-finders, autopilots, data systems/flight recorders, distance measuring equipment, pilots' "heads-up" instrument displays (HUD), aircraft proximity warning systems, flight directors/situation displays, and ship and submarine navigational systems.

Flight and Navigation Sensors, Transmitters, and Displays. This product group includes altimeters; compasses; artificial horizon instruments; and airspeed, acceleration, rate-of-climb, angle-of-attack, and bank and turn indicators.

Airframe Equipment Instruments. This category includes position indicators for landing gear and cowl flaps, hydraulic systems for liquid level and temperature indicators, and cabin environmental instruments such as air conditioning, cabin pressure, oxygen, and heating.

Background and Development

Before the invention of the floating gimbal gyroscope in the first years of the twentieth century, sea navigators had relied on celestial azimuths, star tables, the sextant, timekeeping instruments, and dead reckoning (a type of inferential estimation) with a magnetic compass.

Rudimentary radio direction-finders consisting of large manually-rotated loop antennas for receiving the homing signals of coastal radio beacons came into wide use in the years before World War I. With the discovery that radio waves striking seagoing vessels produced measurable echoes, radar technology became possible, and by the 1930s, the first on-board VHF radars were installed on ocean liners and naval vessels. By the close of World War II, every capital ship in the U.S. fleet was equipped with a radar unit.

The invention of radar, however, had its greatest impact in air operations and immediately began to play a critical role in the European and Pacific theaters. Prior to its invention, pilots navigated using magnetic compasses, airspeed instruments, and direction-finding gyros. Radio beacons that enabled pilots to plot their position relative to intercepted radio signals came into use in the late 1920s. These early developments were followed by advances in flight control technology, including General Electric's first light control system in 1931 and Honeywell Inc.'s first electric autopilot in 1941.

During World War II, radar proved most effective as a fighter-interceptor tool, a strategic early warning device, an anti-submarine weapon, and as a navigation resource for bombardiers approaching enemy targets. Raytheon Company emerged as the leading producer of radar tubes and systems during the war, and General Electric Company produced more than 50 different types of radar for the U.S. armed services. A precursor of Texas Instruments developed the first anti-submarine detection system in 1941.

Sonar, which was based on the principal that transmitted sound waves deflecting against underwater objects could be used for detection and identification purposes, had been invented by the U.S. Navy in 1922 and by World War II became a strategic weapon for airborne, surface ship, and underwater surveillance. Electronic warfare and countermeasures technology grew out of the discovery that radars could be "spoofed" or "jammed" into misinterpreting returning signals. Strips of aluminum foil called "chaff" or "windows" proved to be effective anti-radar measures and led scientists to modify radar technology to overcome such obstacles. Most major radar technology breakthroughs since World War II, such as pulse and phased array, have been attempts to overcome existing or anticipated jamming or counter measure technologies.

The development of search and navigation systems in the post-War years was driven by revolutionary advances in jet aircraft, missile technology, satellite systems, digital computers, miniaturization of electronic components, and the specialized needs of the space program. The 1950s witnessed the emergence of the first inertial guidance systems for missiles and submarines. By 1958, the submarine Nautilus was able to successfully navigate underwater to the North Pole using inertial guidance systems modified from Air Force cruise missiles. In 1955, a tactical air navigation system (TACAN) had been introduced, and one year later the first efforts at developing an air collision avoidance system began.

In 1960, Litton Industries introduced an inertial navigation system using a central integrated digital computer for attack aircraft. Four years later, the Navy's Navigational Satellite System became operational with the launching of the Transit satellite. In the 1960s, sonar technology evolved beyond surface ship and submarine applications to networks of fixed sonar systems capable of identifying and tracking vessels from the ocean floor. The decade also saw the emergence of the modern automatic flight control system for aircraft. General Electric's systems for the F-105, F-111, and F-4 used sensors and computerized components that issued automatic commands to the aircraft's flight control surfaces for stabilization and control. In 1967, the first automatic landing using guidance systems designed for low visibility landing approaches was made at JFK Airport, and Texas Instruments developed the first solid-state radar using semiconducting materials and components. Two years later, Texas Instruments delivered its first laser-guided missile systems to the U.S. Air Force.

During the 1970s, the Global Positioning System satellite network first came under development. Inertial navigators using digital computers also became common on civil and military aircraft. In the early part of the decade, Sundstrand Corporation developed a multimode radar for mapping terrain and seeking airborne targets. The late 1970s and early 1980s saw the emergence of radical new "stealth" or radar-evading "low observable" technologies in the form of the B-1, F-117, and B-2 aircraft. Using radar absorbing materials, innovative airframe shapes, and a variety of other design techniques, the radar "signature" of the B-2 bomber on enemy radar screens was estimated to be the equivalent of a large insect. The emergence of stealth technology and the likelihood that eventually it would become available to potentially hostile nations compelled search and navigation manufacturers to investigate alternative radar detection technologies (like infrared, ultraviolet, and electro-optical detection) and to search for new, more sensitive radar technologies capable of counteracting stealth "invisibility."

Space programs begun by NASA in the 1960s generated new navigation technologies for satellites, interplanetary probes, lunar landing and "roving" vehicles, and, in the 1980s, the space shuttle. In 1985, Texas Instruments developed a new phased array radar technology that offered greater sensitivity and versatility over previous radar systems and, in the latter part of the decade, land navigation systems for automobiles, emergency vehicles, and rental cars began to be developed for complex urban environments. In 1989, the first five Global Positioning System satellites were launched, offering unprecedented accuracy up to a few yards to system users.

The Gulf War between Iraq and a coalition of international forces demonstrated the degree to which search and navigation industry products could influence the outcome of military conflicts. The so-called "Microchip War" was the first conflict fought directly with real-time support from satellite surveillance and communications systems, and Raytheon's Patriot missile—a ground-to-air defensive missile system employing advanced seeking technology—proved itself as a reliable and effective weapon system.

The search and navigation instrument industry shipped $32.5 billion worth of equipment in 1997 and employed almost 186,000 people. While the value of shipments marked the second consecutive year of growth after the industry had declined throughout the 1990s, the employment figures indicated only stabilization in the size of the workforce. Previously, employment had been dwindling at an annual rate of 10 percent. Both trends indicated that the mergers and acquisitions that occurred after the end of the cold war had begun to pay dividends, increasing the value of goods produced while reducing labor costs.

Current Conditions

Industry shipment values, which totaled $31.9 billion in 2001, represented an increase over 2000 levels of $29.9 billion. In 2001, the industry's employment base of 153,710 workers was an increase from the previous year's count of 145,990 workers. Capital investment, which totaled approximately $1 billion in 2000, has remained relatively constant since 1997.

Industry Leaders

Many of the largest search and navigation industry firms are prominent Fortune 500 multinational corporations whose highly diversified corporate activities cover a wide range of industry groups including heavy construction equipment, engineering services, electronic components, business credit services, office furniture, ship construction, oil and gas services, semiconductors, computers, and radio and television equipment. Additionally, many of the major firms in this industry reached their status through mergers and acquisitions, often attempting to increase their competitiveness by creating the economy of scale that comes with large, diversified corporations. This strategy also presented the challenge of bringing together the varied practices and atmospheres of previously separate companies into one larger organization.

Lockheed Martin Corp. led the way in aerospace mergers, bringing together Lockheed and Martin Marietta in 1995. These two companies were already heavily involved in guidance and navigation equipment, as Martin Marietta had previously purchased General Electric Aerospace in 1992. The combined companies went on to acquire another leading company in the field, Loral Defense Systems, in 1996. Lockheed Martin produces navigation instruments for land, sea, and air use. In 2002 the company reported annual sales of $26.6 billion and employed 125,000 workers.

Raytheon Co. also increased its size through acquisitions, purchasing six other large corporations or divisions of corporations throughout the 1990s alone. Overall sales for Raytheon grew from around $8.8 billion in 1989 to $19.5 billion in 1998. The acquisitions of Texas Instruments' missile and defense operations and the defense operations of Hughes Electronics made Raytheon a large company and one of the most significant ones in navigation equipment. Its electronics division, which manufactures radar and guidance equipment, brings in about 48 percent of the company's sales, which totaled $16.8 billion in 2002. That year, Raytheon reported a net loss of $587 million. In 2001, the company employed 87,200 workers.

The company known as Honeywell was actually acquired by and combined with AlliedSignal in 1999. Each company had to sell off some of its search and navigation lines in order to comply with Justice Department guidelines to avoid monopoly. In 2002, Honeywell International, Inc. reported sales of $22.3 billion and a net loss of $220 million. The firm employed 115,000 workers in 2001. Over the course of roughly 25 years, Honeywell supplied some 30,000 emergency locator transmitters to the global airline industry, serving leading aircraft manufacturers like Boeing and Airbus.


Employment in the search and navigation industry declined steadily through much of the 1990s. From 253,000 employees in 1992, industry employment fell to 185,000 in 1997 and 153,710 in 2001. The total for 2001 represented an increase of 7,720 from the previous year. Still, mergers and acquisitions among the firms in this industry are expected to keep diminishing the workforce. In recent years, the Bureau of Labor Statistics projected that only 109,500 people would be employed in the search and navigation instrument industry by 2006.

Occupational categories employed in the industry included production workers such as machinists and assemblers, administrative support staff, administrators and executives, and engineers and other technical personnel. The industry employed a wide variety of engineering professionals—from aeronautical, civil, electrical, mechanical, quality assurance, and manufacturing engineers to computer and digital systems, hardware, software, logistical, and algorithm systems engineers.

Because the search and navigation industry historically has been dependent on multi-million dollar, largescale, limited duration government contracts, fluctuations in employment can be severe. The streamlining effect of mergers and acquisitions has exacerbated this effect.

America and the World

Historically, the United States has led the world in developing and manufacturing search and navigation instruments and systems. The nation has experienced trade surpluses reflecting its advantage in developing advanced technology. However, imports increased throughout the 1990s and into the early 2000s, increasing almost 22 percent from 1999 to 2000, and more than 6 percent from 2000 to 2001, when values reached approximately $1.7 billion. Export values increased more than 3 percent between 1999 and 2000 and more than 18 percent between 2000 and 2001, reaching approximately $3.0 billion.

Joint Ventures. The globalization of the search and navigation market offered the potential for enhanced efficiency, improved market access, and increased worldwide competition. Rationalization, standardization, and inter-operability of technology and the growing number of international business arrangements resulted from an increasingly interlinked global marketplace for search and navigation equipment. Joint ventures, in which a technologically superior U.S. manufacturer typically teams up with a less advanced foreign partner firm, are the most common industry business arrangement and often hinge on the U.S. firm's willingness to surrender technology to the foreign producer in exchange for cheaper labor costs, larger markets, or some other "sweetener." In offset agreements, an exporter agrees to obtain domestic markets for the products of the purchaser, and in some cases the exporter is obliged to buy products within the purchasing nation equal to a certain percentage of the contract's value. Offset agreements may also require the production of the product in the purchasing country or some form of co-production under a licensing arrangement.

Government Intervention. Some domestic aerospace and defense contractors have claimed that the historical unwillingness of the U.S. government to imitate foreign governments by actively intervening to aid exporting companies has weakened U.S. competitiveness. Competitive financing of exports by government bodies (such as the U.S. Export ImportBank), federal funding of "blended" commercial/military foreign sales, or government guarantees of commercial financing for military products have been among the remedies advocated by some industry leaders to increase the U.S. position internationally in search and navigation and other defense sectors.

In 1993, the Clinton administration signed into law a National Cooperative Production Amendments Act that modified U.S. antitrust law so that penalties imposed on U.S. firms for engaging in joint ventures were reduced. The legislation also included provisions allowing industry firms to share technology, pool resources, and share the burden of risks associated with equipment and research and development costs. The act enabled foreign firms to engage in joint ventures with U.S. firms if equal treatment to U.S. firms was extended by their home country.

Research and Technology

Research and development (R&D) costs for new technology in the search and navigation industry are assumed by both the federal government and industry contractors. Most government funding comes from the Department of Defense and the Department of Transportation. The two departments integrated their goals and defined their responsibilities for R&D in a joint report, the 1996 Federal Radionavigation Plan. In spite of this plan, funding for research in this field continued its downward trend into the twenty-first century. For example, both departments received significantly lower funding than they had requested for the development of GPS-related technologies in 2000. Developments such as these caused industry firms either to begin replacing that support with company funds or to reduce their R&D investment.

Long-term R&D contracts made by industry firms with the federal government are often undertaken with no expectation of immediate profit. These so-called "loss contracts" sometimes involve the granting of exclusive data or technical rights to the contractor, which enable the firm to become the sole producer of the technology should it eventually reach a production phase.

The search and navigation industry is one of the most technologically sophisticated sectors of U.S. industry. Major advances in virtually every product group continue to occur at a rapid rate because unlike many other industries, search and navigation and other defense sectors are driven not only by intrinsic market competition but by a government-sponsored national security mandate to produce technologies superior to future projected threats as well as existing ones.

New Technologies. Overall trends in search and navigation systems include increased reliability, "fault-tolerance" (i.e., ability to operate through system failures), and reduced size, cost, weight, and power consumption of system components. Specific innovations now operational or under development in the area of flight control and guidance include night-vision helmets for pilots in which flight instrument data are displayed on a visor;" three-dimensional" synthesized cockpit voices that help pilots visualize threats surrounding the aircraft; aircraft optical sensors that can imitate the processes of the human optic nerve for increased sensitivity and responsiveness to external threats; and wind shear warning systems that can give pilots up to 90 seconds advance notice of dangerous conditions. Other advances include moving map displays projected onto the cockpit windscreen for navigation, voice-controlled avionics that respond to pilots' verbal commands, and on-board "Stormscope" systems that can detect lightning threatening commercial aircraft.

The major technological development in the field of search and navigation instruments is the growth of Global Positioning Systems (GPS) for the commercial, and especially for the consumer, market. GPS originated with the U.S. Air Force and was used by all branches of the military as guidance systems for troops, vehicles, and weapons. The system is dependent on 24 U.S. government-supported satellites in six separate orbits around the earth. A GPS receiver measures the time interval between a satellite's high-frequency radio signal and its reception by the receiver on the ground. With this data the user can instantly acquire the latitude, longitude, and altitude of the receiver via electronic triangulation. Depending on a number of factors, accuracy can range from 100 meters to less than a centimeter.

By late 1996, U.S. automobile makers were offering GPS systems as an option on select vehicles. Like other GPS systems, automobile navigators rely on satellite signals to plot the car's position and direction on an electronic road map stored in computer memory. In the United States, Hertz and Avis began to offer navigation systems in select areas on their rental units. By 1997 General Motors had made its OnStar navigation system available to purchasers of 24 of its car and truck models. The company was able to keep the price of the system down by integrating telephone and emergency service with GPS location and mapping.

Other electronic systems being adapted for automobile applications are radar, intelligent cruise control, and night vision. Intelligent cruise control automatically decreases the automobile's speed as it approaches a slower moving vehicle. This system became available on a limited number of high-end European cars in the 2000 model year. The price for this equipment remained high, adding $2,300 to the cost of a Jaguar XKR coupe in England. Also being developed are radar systems that will monitor a vehicle's blind spots for approaching automobiles and provide a visual warning signal in the side and rear view mirrors.

The National Highway and Traffic Safety Administration, however, was leery of many of these devices. The concern is that a plethora of electronic devices may prove distracting to a driver and cause more accidents than they are intended to prevent. A study focusing just on the advantages of instruments providing rear-end, blind spot, and lane-departure warnings showed, though, that if all cars had such devices, highway crashes would decrease by 15 percent. More sophisticated features, such as collision-warning devices that would alert a driver in a precarious situation, posed a daunting task for programmers trying to make such a system sensitive without creating false alarms. Other industry insiders fear that the high cost of these systems will scare away consumers. One approach involves integrating the features the consumers most desire into one unit. Research showed that emergency services, traffic updates, navigation, and the ability to track a stolen vehicle were most important GPS-related features for consumers.

The second largest market for GPS devices after the automobile market is the consumer/cellular or hand-held GPS receivers. These instruments are about the same size as TV remote controls and are used by outdoor enthusiasts intent on not getting lost. Sold by major retailers such as Wal-Mart and L.L. Bean, these devices sold for around $3,000 in 1989 but the mid-1990s saw the price drop to a few hundred dollars. By 2000 this market segment was expected to reach $2 billion in annual sales, a tenfold increase over just five years. Similar devices have been used for everything from keeping track of rare tortoises to locating oil wells in New Guinea.

Advances in nautical and marine search and detection technology include new mine-hunting sonar systems, vessel alert systems for oil tanker navigation in dangerous seas, sonar fish finders that project live-action sonar images onto display screens, and digital sonar systems that can see through large ocean-bottom objects to detect severed cables or an aircraft's submerged black box. The U.S. National Oceanic and Atmospheric Administration, which is part of the Department of Commerce, is also using search and navigation instrumentation to make U.S. waterways safer for commercial ships and recreational boaters. Automated nautical charts, a Differential Global Positioning System, and a Real-Time Tide and Current System are part of this agencies' innovative approach to maritime safety.

Further Reading

Content, Thomas. "Radar-Aided Cruise Control: Avenue to Safer Roads." USA Today , 23 November 1999.

Covault, Craig. "GPS, Milsatcom Assets Bolstered as War Looms." Aviation Week & Space Technology , 3 February 2003.

Cremeans, John E., ed. Handbook of North American Industry. Washington, DC: Bernan Press, 1999.

"DOT and DOD Budgets Suffer GPS, Augmentation Systems Cuts." Global Positioning and Navigation News , 20 October 1999.

Hoover's Company Profiles. Austin, TX: Hoover's, 1999. Available from .

Kelly, Emma. "U.S. Sets Honeywell Merger Rules." Flight International , 13 October 1999.

"Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing." 1997 Economic Census, Manufacturing Industry Series. Washington, DC: U. S. Department of Commerce, 1999.

U.S. Census Bureau. Annual Survey of Manufactures. Washington, DC: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, February 2002. Available from .

——. "Selected Instruments and Related Products: 2001.". Current Industrial Reports. Washington, DC: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau. September 2002. Available from .

U.S. Department of Commerce. International Trade Administration. "Industry Sector Data." 8 March 2003. Available from .

U.S. Department of Labor. Bureau of Labor Statistics. "2000 National Industry-Specific Occupational Employment and Wage Estimates." 8 March 2003. Available from .

——. "2001 National Industry-Specific Occupational Employment and Wage Estimates," 8 March 2003. Available from .

U.S. Industry & Trade Outlook '99. New York: McGraw-Hill, 1999.

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