Business Impact

Getting a Piece of the Anti-Terrorism Action

Homeland security is breaking records for government R&D spending, and promising a windfall for tech firms.

Like most Americans, Larry Farwell wants to help fight the War on Terrorism. And he thinks his Fairfield, Iowa-based company, the Human Brain Research Laboratory, can do just that. The Laboratory has developed “brain fingerprinting,” a technology that measures a suspect’s brain waves-and, says Farwell, can tip off investigators to the man who knows too much. It works like this: Interrogators fit subjects with sensor-filled headgear and show them a random series of images, some related to their investigation. A computer analyzes the brain’s response to determine whether the subject recognizes the relevant pictures-an Al Qaeda training manual or a terrorist recruiter, for example. “In some cases, this could help identify someone intent on attack before they strike,” says Farwell.

After about a decade of development, Farwell’s company has yet to land a big contract with military or law enforcement agencies such as the CIA, the Department of Defense, the Secret Service, or the FBI. According to an October, 2001, report to the U.S. Senate from the General Accounting Office, these agencies were avoiding brain fingerprinting because “the research expenses, equipment and training costs were perceived to exceed benefits.” But that report was written before the War on Terrorism and the federal government’s threefold spending increase for security technologies. Now Farwell says he is optimistic about winning a contract, and countless other entrepreneurs, scientific labs, industry lobbyists and government contractors are scrambling to do their patriotic duty-as well as get a piece of the multi-billion dollar action.

In the first days after the September attacks, the president requested $40 billion to rebuild and reinforce the country against further atrocities. Congress more than complied, giving a total of $103.7 billion to R&D-related agencies such as the Defense Department, the National Institutes of Health and the National Aeronautics and Space Administration for fiscal year 2002, the largest amount ever allotted and the largest percentage increase in nearly 20 years. The bill earmarks $1.5 billion specifically for R&D into counter-terrorism initiatives-triple what was spent in 2001. “Emergency appropriations are routine,” says Kei Koizum, director of the Research and Development Budget and Policy Program at the American Association for the Advancement of Science. “The size of this particular funding [increase] is not.”

The money will go to a diverse set of agencies and projects. While the Ballistic Missile Defense Organization under the Department of Defense will get $7 billion-a 66 percent increase for one of the Bush Administration’s most controversial priorities-much of the rest is earmarked for a number of agencies not normally associated with defense or security research. The U.S. Department of Agriculture, for example, will get $40 million in emergency funds for research on food safety and potential terrorist threats to the food supply. Another $70 million will go to the Environmental Protection Agency to improve security at its labs. The Department of Transportation, the National Science Foundation and the National Institute of Standards and Technology will also get their share and will begin to dole out new contracts and beef up the budgets of current ones in the coming weeks.

Companies that tout the latest in facial recognition software (See “Recognizing the Enemy”), bio-sensors (See “Detecting Bioterrorism”) and intelligent networks (See “Networking the Infrastructure”) are attracting interest not just from the federal government, but from private investors as well. For example, the price of a share of stock in Visionics, a Jersey City, NJ-based maker of face recognition software, tripled in the days after the government announced that airports would incorporate such technology.

Whether or not these funds generate useful tools and applications remains to be seen. In the meantime, Farwell’s brain fingerprinting system-already passed over twice by the FBI in the last decade-may get one more look. “Priorities have changed,” says Farwell, who continues to make the rounds within the Beltway to show off his technology. “What might not have seemed worth the expense prior to last September looks much different today.”

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