Security Sells

homeland security. terror.
Since the days when Samuel Colt made a fortune peddling his Peacemaker revolvers to frightened frontiersmen and a budding U.S. Army, astute entrepreneurs have profited by selling to Americans worried about security.

Today is no different.

Since Sept. 11, vendors of a cornucopia of protective gear have beseeched Americans and their government to buy in the name of "homeland security."

"If you phrase it the right way, you'd be amazed at what you can sell," said Loren Thompson, a military analyst with the nonpartisan Lexington Institute think-tank.

With the U.S. government and private companies girding to spend tens of billions of dollars to thwart - or at least cope with - future terror attacks, the business appears to be emerging as a sector all its own.

Offerings range from computer and communications technology to security consulting to concrete barriers, chain-link fences and private guards.

Companies are jockeying to position themselves for a piece of the $29 billion federal anti-terrorism package, along with the coming 2003 federal budget, which is expected to be piled with tens of billions more in homeland security funds.

A few firms are already doing some serious selling, including makers of airport luggage and passenger screening machines. Companies are opening Washington offices and staffing government sales departments with retired military officers. Others sell research attempting to divine hot sectors and probable government buyers.

The homeland security sector will attract $100 billion in private and government spending by 2008, predicted Dani Inbar, co-founder of Homeland Security Research, a new firm that tracks the emerging sector.

Don Dickson, publisher of the new Homeland Defense Journal, predicted that the Sept. 11 attacks will be the biggest catalyst for U.S. technological innovation since the Soviets launched their Sputnik satellite in 1957, spurring the competing U.S. space program.

Back then, the space program inspired a flurry of consumer products like Astroturf and Tang.

This time, too, the homeland trend is entering the home.

A sales pitch for DuPont's EVAC-U8 personal hood, which allows a person to breathe while escaping a burning building, declares "Here's an effective, inexpensive way to increase Homeland Security for you and your family."

Another company markets home radiation detectors under the banner "Homeland Protection," while warning of the potential for a "dirty bomb."

Other copycat products include an $18.95 "Department of Homeland Security" doormat and a Bally's Casino "Homeland Defense" gaming token.

In the short term, Dickson pointed to several items he expects the government to purchase, including sensors that monitor drinking water and air quality. Other probable winners are perimeter security devices, such as fences and cameras for power plants and military bases, along with interoperable radio systems that link police, fire and emergency personnel.

Inbar predicts the screening of people will be an $8 billion business in five years, with airports, stadiums and governments installing machines that check identity, criminal history and scan clothing and luggage for drugs or explosives.

In the face of the marketing onslaught, experts warn that the government is susceptible to panic buying, especially of technology that isn't appropriate or fully developed.

"Politicians get political gain out of spending money and doing things even if it's not effective," said Paul Nisbet, an aerospace analyst with JSA Research in Newport, R.I. "There's an awful lot of wasting of money under the aegis of homeland security."

One high-profile seller is Oracle Corp. chief executive Larry Ellison, who has suggested an Oracle database be used to hold the identities of all Americans, verifying them with a national identity card.

More quietly, IBM Corp. has beefed up its Washington presence. Microsoft hired a chief security strategist this spring to chase after the same market. Computer maker Dell's federal homeland security offerings include disaster recovery and data protection services.

But many of the big winners will be the government defense contractors with knowledge of the labyrinthine rigors of government contracting, such as Boeing, Lockheed Martin, Raytheon, General Dynamics and SAIC, analysts said.

The market is also beholden to the terrorists that spawned it. If new strikes don't happen as feared, spending will wither.