Demand for new technologies and system upgrades due to heightened homeland-security concerns may create a $100 billion industry over the next several years. With more than 170,000 employees and several very large agencies now under its umbrella (including the Customs Service, Secret Service, Coast Guard, and Border Patrol), the Department of Homeland Security expects to receive more than $41 billion in FY2004, or about 64% more than it got just two years ago. Only about $8 billion of that is earmarked for science and technology. But add in spending from local, state, and private corporations, and the amount of spending almost triples that of the federal budget.
Several independent market research organizations tally the market for U.S. technology products and services at more than $98 billion. The Homeland Security Research Corp. predicts that overall spending on domestic security will climb to $180 billion in 2008.
One problem, says intelligence and analysis firm Provizio (www.provizio.com), is that vendors who support homeland security will have to figure out how to sell their products or services to a specific agency. Despite the huge market projections, the market is fragmented with no centralized procurement for homeland-security technologies. Provizio believes this can actually be a good thing: "With the fragmented market, vendors are able to target multiple customers within various agencies and levels of government," it says. Yet long sales cycles within multiple potential clients will increase vendors' costs of sales.
The federal government has already signaled where it might spend millions on big-ticket items and programs related to homeland security. One is a high-frequency surfacewave radar to detect small maritime vessels and low-flying aircraft. Raytheon (www.raytheon.com) is leading its development. While it's under the Department of Defense's (DoD's) Counterdrug Technology Development Program Office, it's being considered as a homeland-security tool. The idea is to provide low-cost, all-weather, accurate, and reliable surveillance of surface vessels and small aircraft well beyond the visible horizon.
Similarly, Silicon Graphics Inc. (www.sgi.com) and General Dynamics Advanced Information Systems (www.gd-is.com) are working together to produce the U.S. Navy's Area Air Defense Commander Capability System, powered by SGI's computing and visualization technology, for forward-deployed operations and homeland defense. The system provides military commanders with information from radar and data links into a graphic representation.
With the highly publicized success of unmanned aerial vehicles (UAVs) in Iraq, homeland-security officials are now seriously considering using them domestically for round-the-clock surveillance. In fact, the DoD is already working with industry and the Federal Aviation Administration (FAA) to integrate UAVs into U.S. airspace.
"We see this as a multiyear effort," says Air Force Major Jim McCormick, co-manager of the newly established UAV Interoperability Working Group, which is addressing this issue. The objective, he says, is to establish a common set of rules for the use of UAVs across the U.S. within five years. Boeing (www.boeing.com) and the Defense Advanced Research Projects Agency (DARPA) have already demonstrated that a UAV controlled from the ground could be integrated into air-traffic-controlled airspace with manned aircraft.
One of the most lucrative opportunities for the industry may come from within the Department of Homeland Security, which is concerned about the threat of missile attacks on passenger airlines. The threat is taken so seriously, the government is considering paying for the installation of antimissile devices on commercial aircraft in the U.S., which could cost billions of dollars.
Analogic Corp. (www.analogic.com) has already partnered with Sanders Design International (www.sandersdesign.com) to develop and produce an aircraft infrared countermeasures system for commercial airliners against shoulder-fired, heat-seeking missiles. Analogic is also working with Lockheed Martin to market a range of detection products, starting with a device that identifies threat materials to prevent them from being carried onto aircraft in carry-on luggage.
Another technology bound to gain from homeland-security concerns is RF identification. Four U.S. companies—NaviTag Technologies (www.navitag.com), Hewlett-Packard (www. hp.com), toy maker Hasbro (www.hasbro.com), and trucking firm Anderson Cargo (www.andersoncargo.com)—along with Swiss firm Jungbunzlauer (www.jungbunzlauer.com) are already testing a small RF ID tracking device on cargo containers that are shipped from abroad and then trucked over U.S. highways. As part of an experiment supported by the U.S. Transportation Department, agents acting as terrorists will attempt to break into the containers.
Then, there's biometrics. A study last year by the U.S. General Accounting Office (GAO) identified seven "leading" biometric technologies that could potentially secure the nation's borders—facial recognition, fingerprinting, hand geometry, iris recognition, retina recognition, signature recognition, and voice recognition. The report concludes that, in addition to privacy and policy implications for increasing security, "the cost of biometric border control would not be trivial."
The DoD's Biometrics Management Office selected BearingPoint (www.bearingpoint.com) to develop technologies that could greatly enhance security at the department's facilities. A BearingPoint priority is a DoD Common Access Card, which is a computer-chip-based smart card. Distribution of these contactless cards (meaning they don't have to be inserted into a card reader) for certain military units is expected to exceed 4 million this year.