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Defense technology needs stimulate new business
By Shelia Watson
Contributing Writer
For businesses looking to enter or expand into a high-dollar market, seeking ways to fill the needs of the U.S. Department of Homeland Security and the military could be the path to lucrative contracts.
Judging by the number of private companies showcasing their products and services at the fourth annual Homeland Security Innovation Conference, developing technology for security applications is indeed a viable — and popular — business plan.
More than 400 attended the three-day conference, presented by the Charleston Metro Chamber of Commerce’s ThinkTEC division and held for the second year at the Space and Naval Warfare Systems Center, or SPAWAR, on the Naval Weapons Station campus in Goose Creek.
The event focused on the Security and Accountability for Every Port Act, known as the SAFE Port Act, and highlighted the efforts of private business in developing technology for security initiatives.
The conference showcases the Charleston region as a model for the development of homeland security technologies and new opportunities for public and private applications.
The conference is attended by government contractors, military leaders, business executives, economic development professionals, safety managers, first responders and homeland security consultants and researchers who wish to gain updates on potential homeland security threats and gain insight on innovations from local and regional organizations.
“This is a perfect platform for these technology companies to network,” said Pennie Bingham, vice president of business development and innovation for the chamber. “There are some companies here that are starting up or expanding in Charleston because there are opportunities to be part of the security cluster.”
Tapping the security market
PanX Imaging Inc. is one such business developing technology to enter the security market, thanks to the particular needs of DHS and the military. The company specializes in the design and development of commercial and consumer-grade, high-definition,
wide field-of-view digital imaging sensors.
“We’ve been doing this work with imaging for a long time, but we’ve just recently looked into using our products for military applications,” said Jack Keable, CEO and chairman.
“The multi-lens cameras give a view from different angles, and we have an image integration system that can be used on tanks,” Keable said. “The real-time images from sensors on five areas around the vehicle are transmitted into LCD displays in front of and around the driver’s head.”
The effect is a 360-degree view of the exterior of the vehicle, which would help identify mines and other potentially hazardous materials.
“Having that kind of view from inside the tank could save lives in the field,” he said.
PanX Imaging is located in Hilton Head but will likely relocate to Charleston in the next few months.
“If we’re getting into the security market, we’d rather be here in Charleston,” said Carroll Campbell, company president.
Government looks to private sector
In 2005, the U.S. Department of Justice began looking into engaging private companies in national security efforts.
According to a report released by the department, because the private sector owns and protects 85% of the nation’s infrastructure, the government recognized that the resources, advanced technology and specialized knowledge of these companies can be put to use filling the needs of the U.S. Department of Defense and the DHS.
DHS responded to the report by creating the Small Business Innovative Research program. The goal of
SBIR is to increase the participation of small businesses in federal security initiatives and solutions. Currently about 3% of the annual non-operations budget is reserved for awards to small businesses.
The goal was to increase participation of innovative and creative small businesses in federal research and development programs and to challenge industry to bring innovative homeland security solutions to the market with the
Small Business Technology Transfer Program.
Even better news for technology companies is that the bulk of the funding for the grants is allocated to DHS branches operated at the state level.
The South Carolina Research Authority is involved in many security and high-tech projects, several of them related to Homeland Security. In addition, SCRA’s SC Launch! program participates in a matching grants initiative, in which companies in the program are awarded funds from SC Launch! equal to the amount of an SBIR Phase I grant it has obtained.
Creating, luring businesses
Bill Mahoney, president and CEO of SCRA, said such programs are a means of helping originate businesses in or attracting them to the area.
“The development of the security cluster is a tremendously positive advance for the region,” he said. “It sits right next to the development of the sustainability cluster in terms of relative importance.”
Mahoney said the industry is expanding in the region.
“We’ve seen the number of companies working on security technology with both Homeland Security and Defense grow significantly in the area,” he said.
One of the key benefits in the growth of those companies, Mahoney said, is that they tend to provide higher wages.
“What we found from a recent SC Launch! survey is that many of the companies, even some in the start-up phase, are paying a per-capita wage that is well above the state average because they’re dealing with the development of software and other technology for security applications,” he said.
Mahoney defined “above state average wages” at about $77,000.
Good for economic development
“The whole development of the security cluster means more companies are developing technologies, so even when there are not a lot of jobs — because many of them are small businesses — each of those jobs pays a higher wage than the state average,” he said. “So overall it makes for good outcomes for economic development.”
The U.S. Office of Management and Budget reports that since 2005, the federal government has given more than $600 million in SBIR money to private companies to protect the nation’s ports, borders and airports. A large portion of the money went to companies specializing in access control and surveillance systems.
That potential funding source is good news for the PanX Imaging management team.
“We’re looking for funding to get our security products to market,” said Campbell. “We’re talking to several investors now.”
The company already has taken an essential step that could move it ahead of the early-stage curve in filing two U.S. patents to protect its intellectual property on the stitching algorithm and the lens array concept.
“This is a product that can be a critical asset to protect our country,” said Keable. “We’re serious about getting it to market.”
Shelia Watson is a contributing writer for the Business Journal.
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