The bombings in London will have economic repercussions throughout Europe, Asia and the United States, says a Duke University business professor who specializes in global risk management.
"Because this attack focused on infrastructural transportation targets in London's financial district, I expect that though the casualties may not be as severe as the Sept. 11, 2001 attacks in the U.S., the economic effects will still be significant," said Campbell Harvey, a professor of international business at Duke's Fuqua School of Business.
"This is all about vulnerability," Harvey said. "When consumers feel less safe, it changes their spending patterns. Businesses will change their investment and employment plans. Lack of confidence negatively impacts growth."
The London attack -- and the earlier bombing in Madrid -- also points to the need to protect mass transportation other than aviation, said David. H. Schanzer, director of the Triangle Center on Terrorism and Homeland Security, headquartered at Duke.
"Aviation is clearly more secure than it was prior to Sept. 11, so the terrorists are clearly moving to softer, less fortified targets such as buses and subways," said Schanzer, who is the former Democratic staff director of the House Select Committee on Homeland Security. "We are spending a disproportional amount of homeland security dollars on aviation and rail has been given a lower priority. That's something that needs to change."
There are 140,000 miles of train routes and about 1,000 Amtrak and urban train stations in the U.S. Americans make 9 billion trips per year by train, and five times as many Americans travel by train as travel by airplane, Schanzer said.
New technology is needed that would allow large numbers of people to be screened for explosives without slowing down the train system to unacceptable levels. More teams of bomb-sniffing dogs are also needed, Schanzer said.
"Despite successes over the last four years combating Al Qaeda and removing its leaders, this incident demonstrates that the terrorist threat remains potent and the problem of terrorism is something we'll be dealing with for a long time," he said.
According to Harvey, Thursday's attack is likely to reawaken people's awareness of the risks of terror.
"I fear that the average American has become somewhat complacent given that it has been almost four years since the Sept. 11 attacks," Harvey said. "People rightfully believe that the probability of a large scale hijacking-like event is lower. However, they forget, at the same time, that it is far easier to carry out a car bombing."
Harvey expects to see the price of oil decrease as a result of the attack.
"The attack will damage consumer and business confidence which, in turn, will dampen expectations of future economic growth. The price of oil is closely tied to growth. Lower growth means lower oil demand and lower prices."
Harvey notes that a recent Duke University and CFO Magazine survey of 391 chief financial officers in the United States, Europe and Asia found that 35 percent of U.S. firms and 37 percent of European firms reported the threat of terrorism was already significantly affecting their bottom lines.
"I expect that the next reading of the terrorism index will at least double in Europe and surely increase in the U.S. and Asia, as a result of today's events." Harvey said, "All of this is bad news for capital investment, employment plans and economic prospects in general."