Economic outlook bright for biometrics, ID card industries

Despite the global economic downturn, the growth potential for government programs aimed at verifying the identity of people in the United States and abroad remains strong, industry officials said at a conference in Washington today.

Comment on this article in The Forum.Companies that produce secure identification documents and use biometrics, such as fingerprints and iris scans, stand to benefit the most as governments award contracts for identity verification solutions, officials said at a conference organized by Imperial Capital LLC, CapitalSource LLC and Civitas Group LLC.

"Traditional paper documents just don't work anymore," said Paul Beverly, president of North American operations for Amsterdam, Netherlands-based Gemalto, which specializes in digital security documents. Jim Hayward, chairman and president of Applied DNA Sciences, said the U.S. public has become tuned into the value of using DNA for security through television programs such as the CBS blockbuster "CSI" series, where police investigators use forensics and biometrics to crack some of the toughest cases. Applied DNA Sciences, headquartered in Stony Brook, N.Y., uses plant-based DNA to secure a host of items, such as passports, driver's licenses, currency and fabrics.

"We feel we have built a recession-resistant business," Hayward said. Indeed, Hayward estimated the market for biomaterial genotyping at $1 trillion. The company boasts that its DNA markings cannot be counterfeited. Hayward said the Transportation Security Administration had about 1,500 uniforms for airport screeners stolen last year. He declared that the uniforms would be identifiable if they had DNA markings on them.

Internationally, LaserCard Corp., based in Mountain View, Calif., expects its profits to grow at the end of FY09 and in subsequent years due to identity verification projects in Angola and Italy, said Robert DeVincenzi, who became the company's chief executive officer and president in June. He said government programs represent 60 percent to 65 percent of the company's revenue. The firm also expects revenue from optical memory card programs in FY09 to grow by as much as 50 percent.

Companies that specialize in providing full services to government clients are expected to fare the best, industry officials said. Gemalto's Beverly, for example, said governments are not only looking for a contractor to provide secure devices but also to manage the process for enrolling people into secure identity programs, provide software solutions and issue secure documents. He said government programs account for the fastest growing segment of Gemalto's business. Specific programs the company eyes for growth include electronic passports, national identification cards and secure driver's licenses, Beverly said. "Clearly there are some strong market drivers that we have," he said.