How bin Laden Made One Industry Boom

By Bill Saporito Friday, May 20, 2011

    • It's possible that the Navy Seal team that killed Osama bin Laden on May 1 carried communication equipment made by L-3 Communications. It's also possible that if you were a U.S. airline passenger that Sunday, you passed through the L-3 ProVision Millimeter Wave Checkpoint Screening System--the controversial body scanner being installed in airports across the country. L-3 was in the security business before 9/11. But the New York City--based company is one of many to benefit from the rising demand for the communications and surveillance equipment used to combat terrorism.

    If one of bin Laden's goals was to disrupt or destroy U.S. businesses, he had the opposite effect in this segment of the economy. The 9/11 attacks created a market for intelligence and surveillance just as the Internet and the exponential growth of computing power were changing their use. L-3 had sales of $1.9 billion in 2000. This year its sales are projected to reach nearly $16 billion, fueled by contracts covering everything from port security to avionics. Smiths Detection, a division of the U.K.'s Smiths Group that makes baggage scanners and has expertise in explosives and chemical detection, grew 15% last year. Companies like Siemens and Honeywell have capitalized on the boom by outfitting office buildings--don't forget your ID card--and cities across the U.S. with security systems. Chicago has 10,000 security cameras in place, and there are an estimated 30 million security cameras across the country, as well as hundreds of thousands of people manning them.

    Even the hunt for bin Laden helped create a new market for unmanned aerial vehicles (UAVs), also known as drones. According to defense analyst Teal Group, the market for UAVs, which include Predator drones made by General Atomics, will reach $5.9 billion this year. Small-drone makers like AeroVironment have seen their stock soar during the past three years as the U.S. finds new uses for the eyes on the sky.

    Predator drones have been particularly effective in hunting down al-Qaeda and Taliban leaders in remote areas of Pakistan and Afghanistan, and the death of bin Laden could dampen recruiting. Analysts have already downgraded several defense giants. If we keep winning battles in the war on terrorism, they may need to find a line of work that prospers in peacetime.