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Trade Groups Push Cybersecurity Carrots, Not Sticks

Coalition says financial rewards would be more effective than laws in encouraging private-sector companies to upgrade their IT security.
Inside DHS' Classified Cyber-Coordination Headquarters
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Slideshow: Inside DHS' Classified Cyber-Coordination Headquarters

The Obama administration should use financial incentives to encourage private companies to improve cybersecurity and create standards, a coalition of industry groups and the U.S. Chamber of Commerce has recommended.

In a paper published this week, the Business Software Alliance, the Center for Democracy and Technology, the Internet Security Alliance, TechAmerica, and the U.S. Chamber of Commerce commend the federal government for work that's already been done based on Obama's Cyberspace Policy Review. That document, published in May 2009, made 24 cybersecurity policy recommendations for the federal government to implement.

The group made a host of recommendations to improve the partnership, urged by the review, between the federal government and private companies, one of which is to provide more financial motivation for private-sector companies to upgrade their cybersecurity.

"The... finding that cost and complexity, not lack of ability or commitment, are the largest problems in implementing effective cyber solutions has also been confirmed by multiple independent studies," according to the paper. "This research shows that although many enterprises are investing heavily in cybersecurity, many others, largely due to the economic downturn, are reducing their cybersecurity investments."

This is why regulation alone won't improve how businesses implement cybsecurity, the coalition said. The administration should use "a menu of market incentives" as well to encourage businesses to create cybersecurity standards.

Any incentives created, however, must strike a balance of being "powerful enough to affect behavior without being so burdensome as to curtail U.S. investment, innovation, and job creation," according to the paper.

The coalition makes recommendations in seven areas of cybersecurity: risk management; information management; information sharing and privacy; international engagement; supply chain security; innovation and research and development; and education and awareness.

Incentives are recommended as part of its risk-management recommendations, which also include the use and further development of international standards to promote cybersecurity and to recognize the different roles and responsibilities industries play in risk management.

The coalition is not the only entity to be critical of the administration's Cyberspace Policy Review. A report by the Government Accountability Office (GAO) released in October found that while the feds are making progress in implementing the cybersecurity policy recommendations made by the review, they must better define agency roles and responsibilities and establish firmer implementation schedules.

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