Homeland security's second act

The idea seemed unthinkable three years ago, when the ruins of buildings destroyed by terrorists still smoldered. But it's true: A degree of normalcy has returned to the government and the country. The absence of new attacks in the United States has made such a turnabout not only possible but also probably inevitable, given the human desire to move on.

Of course, the lack of new attacks doesn't mean that the threat has disappeared — or even diminished. The country faces the same risks but in a less highly charged environment. The purpose of this special report is to explore how that changing backdrop is affecting the government's homeland security plans and priorities, and the fortunes of the companies in that new multibillion-dollar market.

It is understandable that government officials' initial response to the 2001 terrorist attacks would be to go into crisis mode, passing new laws, reorganizing agencies and re-evaluating contingency plans. Terrorism is, by its nature, an unpredictable threat. But our best defenses include better information and communication, not just more law enforcement officers on the streets. In addition, we live in a technology-dependent country, so information technology and automation naturally play a significant role in the government's response.

Officials at many IT companies, still recovering from the dot-com bubble burst and the general economic downturn, saw the government market — and homeland security in particular — as a promising and more reliable way to get business going again.

Certainly, government officials have spent a good deal of money on homeland security, with many high-profile projects supplying more than enough proof of the market's legitimacy. However, those procurements aren't enough to sustain the efforts of the hundreds of contractors who have been knocking on doors around Washington, D.C. And fewer vendors seem to be knocking these days than before.

To top it all off, analysts expect the previously rapid growth in homeland security spending to fall to more sustainable levels.

So what does this mean for the coming year and beyond? As stories in this special report illustrate, government officials have some difficult work ahead of them. However, a number of factors are in their favor: They have a more clear-headed sense of what their priorities should be, what the most promising technologies are and which investments will produce the best returns.

Tough choices will have to be made, and some projects won't get funded. However, security is not measured by the dollars spent on systems but by the effectiveness of those systems.

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