WASHINGTON - The technology sector, beset by lackluster interest in computers and other gadgets, could get a boost from creation of the Department of Homeland Security, which portends increased government spending on anti-terrorism gear.
President Bush signed legislation this week that will bring 22 existing federal agencies together in the new department, which will require hundreds of millions of dollars' worth of new phones, computers and other contraptions to get up and running. The government is expected to spend even greater sums on anti-terrorism research and on creating new data-scrambling, surveillance and electronic screening devices.
Overall, industry experts estimate that surveillance, identification and intrusion-detection equipment sales and services could grow from less than $16 billion annually to nearly $40 billion over the next five to seven years. Those figures include government and private-sector outlays.
The Homeland Security measure is "a very big positive," said Barry Leffew, a vice president at VeriSign Inc. of Mountain View, Calif., a company that provides Web site authentication and security services. "It could generate a very substantial" amount of business.
Companies providing equipment and services to airports have been the main beneficiaries of increased vigilance since the terrorist attacks last year. But scores of other businesses also are hawking a wide range of wares, including radar-tracking devices, electronic fingerprint scanners and computer encryption software.
One security company benefiting from the trend is TimeDomain Corp. The Huntsville, Ala., start-up won a $3 million contract from the Pentagon to develop a radar-tracking device for military use. The company has been working on a technology called ultra-wideband, which potentially could provide new wireless services such as radar surveillance of intruders, locating buried earthquake victims and greatly improving collision-avoidance systems.
"There is a big emphasis on commercial, off-the-shelf solutions" in government security contracts, said Jeff Ross, a TimeDomain vice president.
Nonetheless, some experts fear that the security mandates could backfire.
"When the government starts putting its fingers in commercial technologies, you are going to end up wasting a whole lot of taxpayer money and end up with things that only bureaucrats love," said James Gattuso, a research fellow at the Heritage Foundation, a conservative Washington think tank.
Jube Shiver Jr. is a reporter for the Los Angeles Times, a Tribune Publishing newspaper.