CNBC
updated 9/19/2006 7:27:33 PM ET 2006-09-19T23:27:33

In the wake of 9/11 the business of homeland security is booming. The Department of Homeland Security was created and has spent over $130 billion to beef up control of our border, port security and national security in general.

In the five years since 9/11 not only has the Pentagon been rebuilt but the business of homeland security has skyrocketed.

Apogen Technologies is part of what some consultants call "the al-Qaida economy" in Northern Virginia. The Department of Homeland Security money has created more than 185,000 new jobs in the area since 9/11.

“With the formation of the Department of Homeland Security in 2003, we've seen somewhere between 30 and 40 percent growth consistently,” says Paul Leslie, CEO of Apogen Technologies.

Providing IT support to the customs agency Apogen has grown since September 10, 2001 from a $65 million firm with 300 employees to $250 million company with over thousand employees today.

And they are not the only ones. Three years ago, 3,500 companies were on the government payroll, now, just under 34,000 — a ten fold increase.

All part of the business of homeland security that for the most part did not exist 5 years ago — and the market is booming.

“In five years we've gone from $16 billion to north of $40 billion spent per year on homeland security,” Brian Ruttenbur, an analyst at the investment bank Morgan Keegan.

The first wave of big money went to big companies for beefed up airport security, including $15 billion to General Electric's Invision followed by IBM, L-3 Communications and Honeywell.

But the market is not just booming, it's also maturing.

“You are really beginning to see what we call a second generation of homeland security technologies and these are not repurposed technologies, but these are things that are really designed for this market,” says Mark Shaheen of the Washington consulting group Civitas Group.

The next big prize?

A new border security initiative — $2 to $10 billion in potential government spending big name defense giants: Lockeed Martin, Northrup Gruman, Boeing, Raytheon, Ericsson are all competing

“In terms of backend of airport security we are still wide open, in terms of container security, we are still wide open, in terms of border security we haven’t done much, we've put up a couple of cameras,” says Ruttenbur.

In truth nobody knows how big the business is, but Washington-based homeland security research predicts homeland security industry spending could top $170 billion a year by 2015.

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