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Fear: The Next Growth Business?

What recession? Last week, at the conference of the American Society for Industrial Security, companies showed off mission-critical technologies and wrestled with the challenges of hypergrowth. A dispatch from the front lines of the anxiety economy.

San Antonio last week was at the vortex of an emerging anxiety economy.

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At the Henry B. Gonzalez Convention Center, where 15,000 people converged for the annual American Society for Industrial Security (ASIS) conference, sellers of products from bomb-proof glass to biometric face scanners professed that they were proud to be able to help make the United States a safer place — and reported that business had never been better.

Walking the aisles of the ASIS show, which caters to the $16 billion security sector, I felt like the most surveilled person on the planet. Clusters of cameras mounted on the walls of trade-show booths tracked my movement and scanned my facial features, comparing them to a database of wanted criminals. A gregarious golden retriever trained to identify narcotics sniffed my hand. I walked over a scrap of artificial grass, and the grass, thanks to a buried coaxial cable, knew that I was there.

Tools like these, which may have seemed intrusive and Orwellian before September 11, suddenly seem like just the thing to restore domestic tranquility. Sales rep after sales rep described phones ringing constantly since the attacks and long waiting periods for their products. There were crowds of people around some booths, like the one where PerkinElmer Inc. was demonstrating its new generation of X-ray machines. The latest models not only highlight possible explosives in red on their screens but also occasionally display nonexistent weapons, just to keep the operator on her toes.

The educational sessions focused on the importance of “hardening” soft targets, from small airports serving private planes to shopping malls to manufacturing plants — a process that requires a great deal of analysis and planning and usually a great deal of money. It occurred to me that the anxiety economy, like the Internet economy before it, is supplying plenty of new reasons for companies to invest in their futures — only this time, it’s not powerful Web servers they’re buying, but sturdy steel bollards (postlike barriers) to prevent someone from driving a truck full of explosives through their front door.

“During the heyday of the Internet a few years ago, you had lots of technologies looking for problems to solve,” says Avi Katz, the CEO and president of Equator Technologies Inc., a Silicon Valley company that makes microchips for video surveillance. “Now we have a big problem that is looking for technology. I grew up in Israel, where terror was a part of life. In America, we’ll have to develop a better security infrastructure.”

In many ways, the conference was reassuring. The show floor was full of technologies that will help security people do a better job; for example, closed-circuit-TV systems that can filter out unimportant information, like a tree swaying in the breeze, and help operators home in on important information, like the movement of someone climbing a fence. And there were fences that could alert a central command post exactly where they were being climbed. A portable device called R.A.P.I.D., which wasn’t displayed at the show but was discussed, allows the user to confirm the presence of dangerous pathogens like anthrax or smallpox, in consultation with experts who can review an instant lab report via the wireless Internet.

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Several public-health experts downplayed the possibility of biological terror attacks although they did show software designed to track the spread of contagious diseases. Interesting tidbit: Strep throat is actually more contagious than anthrax. While experts seemed to consider chemical attacks more plausible in the near term, they adjudged that the effects of such attacks would be fairly contained. (Gas masks were deemed to be only marginally useful, even if you kept one with you 24 hours a day; the best advice for minimizing the impact of a chemical attack, one physician advised, is to get rid of your clothes immediately and take a shower with soapy water.)

The worrisome part of the San Antonio conference wasn’t related to some new kind of terrorist weapon or technique; it was about a bureaucracy’s ability to change quickly.

Former U.S. Secretary of Defense William Cohen’s keynote speech addressed the terrorist threat to the United States and talked about possible responses. After the talk, I asked Cohen how difficult it will be for America’s defense and intelligence establishments to orient themselves to a new kind of threat — a widely distributed network of terrorist cells, as opposed to a nation-sized enemy easy to find on a map. His carefully qualified answer boiled down to this: “not very easy.”

“We have to keep one foot in the 20th century and one in the 21st,” Cohen said. “You still have North Korea, poised and ready to attack. You’ve got Saddam in Iraq. You’ve got Iran, and you’ve got to maintain your forces for that. The military is in the process of reshaping itself.” The U.S. Army is developing nimbler, more lethal strategies, he said, and the Marines have been training for urban warfare. The Air Force is experimenting with armed, unmanned aircraft.

Echoing the classic knowledge-management problem every large organization faces, Cohen conceded that it will be tough getting government agencies to improve the way they share information about national-security threats. “We have an amazing ability to gather information,” Cohen said, “but we don’t have the ability to analyze and distribute it in real time.” Cohen said that the barriers to better knowledge sharing among organizations like the FBI, CIA, and Immigration and Naturalization Service are more “bureaucratic and cultural” than statutory.

Both speakers and attendees at the conference seemed to think that increasing security would require a shift in mind-set as much as it would new investments in technology. Government agencies and private enterprises, they said, need better communication, a clearer sense of potential dangers, and a new commitment to “hardening targets” that are part of America’s infrastructure.

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For their part, ASIS attendees were snapping up all the security products they could find — a reflex like the one that was causing consumers to shop for gas masks. There was a long waiting period for walk-through scanners from Ion Track Instruments that could detect drugs and explosives on a person, and a sales rep for Interquest Detection Canines told me that the company had no dogs to sell right now. Robert Oatman, president of the executive-security firm R.L. Oatman & Associates Inc. said, “Just try to get a light-armored vehicle at this point.”

The anxiety economy could be a temporary phenomenon. Or it could be a new feature of the environment in which every business now exists.

Scott Kirsner (skirsner@fastcompany.com) is a Fast Company contributing editor.

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