Point/Counterpoint
Will There Be a
Homeland Security Business Boom?
Last month we reported on the new—and right now,
growing—homeland security business sector. But will its growth
last?
Introduction by Jefferson George, Director, DCI South
(Development Counsellors International)
Jefferson George Just four years ago, the term “homeland security” wasn’t
part of everyday conversation, much less considered a growth
industry. Since Sept. 11, 2001, however, several signs point
to ever-increasing investment in programs and products to
protect U.S. citizens.
Last year, a book by the Organization for Economic
Cooperation and Development, “The Security Economy,” explained
how increased awareness of and demand for security risks among
governments and corporations have helped create a $100 billion
market for security goods and services. Biometrics, radio
frequency identification (RFID), and other new identification
and surveillance technologies continue to emerge and stimulate
the security economy in the 21st century.
Media outlets across the country have taken notice. MSNBC
reported last year that a new government policy of
fingerprinting foreign visitors represents a
multi-billion-dollar opportunity for the U.S. biometrics
industry, which makes products that use details of a person’s
unique physical features—facial, eye, or fingerprint
patterns—to prove their identity. Meanwhile, The
Virginian-Pilot reported that the state of Virginia saw a 4%
increase in computer system and design jobs from August 2003
to August 2004, due in large part to “the surge of government
spending for homeland security.”
Evidence of this catalyst can be found in President George
W. Bush’s proposed budget. In addition to raising defense
spending by almost 5%, the 2006 fiscal year budget calls for
“critical upgrades in homeland security.” As The Washington
Post explained it, “If your job is to chase bad guys and throw
them in jail, the president’s budget plan has good career news
for you.”
In short, homeland security already has spurred increased
activity in several industries. Considering the potential for
even more technology, products, and services aimed at
protecting U.S. citizens, a homeland security business boom is
not only likely, but has already started.
Homeland Security will Usher in New Prosperity at Home
By Barry Broome, President and CEO, Greater Phoenix
Economic Council
Barry Broome The establishment of the Department of Homeland Security
has contributed to an increase in government contracting
within security-related industries. Many new technologies will
have broader applications and spur new opportunities across
the spectrum. To describe this phenomenon as a “homeland
security boom” misses the broader application possibilities.
Homeland Security needs are critical to the safety of America
and will bring prosperity to other industries as these new
applications take hold.
The $43.7 million grant awarded to Arizona State University
by the U.S. Army to develop flexible display panel technology
has the potential to produce innovations that will reach far
beyond military and security applications. This technology has
as much to do with reshaping the way combat infantry soldiers
retrieve information as it could for revolutionizing consumer
electronics in the workplace or home.
The $5.1 billion Department of Homeland Security contracts
(nationwide) and the $97.1 million contracts (within Arizona)
are fueling an array of groundbreaking research and
development. Ribo-med, a Greater Phoenix-based biotechnology
company, is currently partnering with Northrop Grumman to
develop a handheld sensor for the detection of bioterror
pathogens. This disease detection system is also being adapted
to diagnose cancer and RNA viruses in their earliest stages.
The technologies that are being developed to meet 21st
century security demands are becoming increasingly intertwined
with commercial applications demands and will provide a
broader economic impact beyond the immediate realization.
The Opportunity is There, but it’s Not Easy
By Ethan Hadley, Vice President, Economic Development,
Huntsville/Madison County (AL) Chamber of Commerce
Ethan Hadley Is opportunity knocking? I’d say, “Yes.” Is it beating down
the door? I’m not so sure. I exchanged email on this subject
with the recently retired assistant director for the Alabama
Department of Homeland Security, Dr. Glenn Priddy. Last year,
Priddy accepted the role as the first state-level science and
technology specialist for homeland security in the nation,
while retaining his position with the U.S. Army Space and
Missile Defense Command in Huntsville. It was an excellent fit
of experience since Priddy could leverage significant
investments by the U.S. Department of Defense (DoD) and other
federal agencies—many with direct applications to homeland
security.
Priddy told me that some numbers can be misleading, since
the U.S. Department of Homeland Security (DHS) budget is
roughly 10% of the DoD budget, and much of the DHS budget is
for on-going operations of the 22 former agencies that make up
DHS. However, DHS has opened new markets for products and
services and some local businesses have successfully entered
this market. For instance, Quantum Research invested company
funds in a mobile communications package and has successfully
converted that investment into a product for the Alabama
Department of Homeland Security that will substantially
improve interoperable communications within the state.
A number of local companies are also collaborating through
the Tennessee Valley Corridor Homeland Security Coalition to
pool efforts for homeland security applications. Some of their
capabilities will be presented to DHS officials at a Tennessee
Valley Corridor Conference in Washington in July.
The Question is Larger than Just Us
By Mark D. Waterhouse, CEcD, FM, HLM, President, Garnet
Consulting Services, Inc.
Mark D. Waterhouse A no brainer—of course there will, and we are already
seeing it. American ingenuity and the capitalist marketplace
drive us to capitalize on any new trend or situation and make
a buck.
The more interesting question is whether the homeland
security business boom will have the staying power of the
invention of the computer—or will it be more like the Beanie
Baby, with an initial flurry of economic activity that rapidly
fades to near obscurity?
Here’s where the discussion gets much more serious. If
there is a need for a homeland security business boom, that
means our country has significant and continuing image and
relationship problems in the global society. So, from an
economic development standpoint, what do we do?
One option is to continue on the course that led to 9-11,
and the more fundamental problems of economic inequities
around the world. Most assuredly, this will make the United
States the primary target for the violent venting of
frustrations by those who think we have too much when they
have too little. And of course, this will mean a definite need
for more self protection through increased homeland security.
A second option—and in my mind, a better one—is to devote
increasing efforts to improving economic standards across the
globe. Happier, healthier people who aren’t hungry and don’t
feel oppressed are less likely to label us as the world’s bad
guys, and the need for massive security measures will be much
less.
It’s entirely our choice—what will we do about it?
Seems like a great economic development challenge to me.
