Where Industry and Security Intersect
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The AT industry is not cohesive or easily characterized. The industry encompasses hundreds of companies that sell more than 17,000 different products11 to a broad spectrum of customers who can have radically different needs. The U.S. AT industry consists of large-, medium- and small-size businesses producing a wide range of products intended for a frequently limited, sometimes regulated, and often partially subsidized market.
AT companies include businesses that develop, manufacture, distribute and support products tailored — exclusively or in part — to the needs of persons with disabilities. Software, electronics, household items, medical supplies, furniture, enhancements to existing products, and specialized devices are just a few examples. To some extent, companies are aligned in industry subgroups, such as manufacturers that make devices for people with hearing disabilities, mobility devices such as wheelchairs, or AT products for people who are blind.
Sixty percent of all survey respondents have fewer than 10 employees, a finding that suggests that in many instances AT industry workers shoulder multiple responsibilities within their business organizations. And, survey data indicate that it is not unusual for AT manufacturers and suppliers to produce a variety of products that serve multiple sectors of the AT market.
Most firms are primarily engaged in manufacturing, assembly and distribution activities. Of the 287 firms that reported manufacturing as a primary or secondary activity, 245 of them (see Table 10) stated that product distribution is also a primary or secondary function for their companies. Product assembly is a major, or secondary, role for 166 of the 359 survey participants. Some 141 firms disclosed that they count applied R&D activities as primary or secondary functions in their operations.
The AT product areas with the largest number of company participants (as shown in Chart 1) are: devices to aid mobility, 20.7 percent; orthotics/prosthetics, 12.2 percent; aids to daily living, 12 percent; and communications devices, 10.4 percent. Survey data show that significant numbers of companies also focus on computer related products (9 percent), sensory aids (9 percent) and recreation, leisure and sports products (8.2 percent).
Fewer companies said they made products for the following AT sectors: furniture/furnishings, 5.6 percent; architectural elements, 5.4 percent; environmental needs and systems, 4.3 percent; and telecommunications, 3.3 percent.
A host of support organizations, including consultants, independent product distribution companies, and private testing and research organizations play important roles in the U.S. AT industry. Of the 359 companies that provided BIS with data, 72 indicated that they are not engaged in manufacturing as either a primary or secondary activity–meaning they perform other functions in the industry.
Product testing is one area where AT companies may rely heavily on outside firms. Only 89 of all reporting companies counted product testing as a primary or secondary activity for their firms. Similarly, just 62 companies stated that basic research is a primary or secondary activity. Nearly 70 firms reported that providing consulting services on AT industry-related issues is a primary or secondary activity for their enterprises.
The disparities between the number of companies that responded to the survey and those actually engaged in activities such as manufacturing, assembly, and distribution are partially explained by the use of contract manufacturers in addition to the contracted services mentioned above. Survey responses and conversations with owners of smaller AT businesses revealed that many firms use subcontractors (both domestic and offshore) to manufacture their products. Subcontracting can enable smaller companies to channel their often-scarce resources into new product development and/or marketing.
In addition, subcontracting can be a necessity in instances where product demand is too limited, or the nature of the AT device is so specialized that only a small production run is needed to produce a year’s worth of units. Under these circumstances, retaining an in-house production staff and maintaining production equipment may not be cost-effective. Some AT companies determine that their capital is better spent on other AT business activities.
Frequently, companies become engaged in the AT industry by starting to design and manufacture AT devices in response to a personal injury or an illness of a loved one–not as a conscious, planned entrance into the market. There are other manufacturers that move into the industry by acquiring proven or emerging AT products developed by other individuals or companies.
Still other companies become engaged in the AT industry by accident because products or capabilities targeted for the general consumer market find application in the AT market, according to comments provided by study participants. Firms that develop software or manufacture aids to daily living, for example, have suddenly found themselves with an AT customer base because of subtle design provisions or options in a portion of their product line that turn out to be suited for persons with disabilities.
While there is a large and growing customer base for AT products, the business is not always highly lucrative for companies because of the specialized nature of the products, low production volumes, and other factors. A few firms participating in the survey acknowledged that their AT sales were "loss leaders." They stated that their AT products are used to complement more profitable ventures in the medical products and health care services markets.
11 http://atto.buffalo.edu/registered/Resources/ATProductDatabases
