Booming Cybersecurity Industry Highlights the Threat of Cyber Crimes

Young hacker in data security concept

Digital technologies have become a critical enabler for economic growth and societies now place heavy reliance on the internet. The digital world has brought not only enormous benefits, but with these benefits also come significant vulnerabilities. Cybersecurity incidents are increasing at an alarming rate and are impacting on societal norms, essential services, and organizational welfare. The rate of cyber crimes has grown exponentially and is consistent with the expansion and evolution of technology.

The proliferation of cyber attacks is causing widespread damage to companies, governments, and individuals. Cyber-attacks range from denial of service attacks, website defacements, to access to sensitive information and attacks on critical infrastructure. The recent WannaCry malware incident affected many, affecting over 230,000 computers in over 150 countries in the span of a day. WannaCry targeted computers running Microsoft Windows by encrypting data and demanding ransom payments in Bitcoin cryptocurrency. Large organizations with presumably good cyber security were affected – among them, the United Kingdom’s National Health Service (NHS), Spain’s Telefónica, FedEx and Deutsche Bahn were affected. A particularly high profile incident that arguably had an impact on the recent election campaign, was Hillary Clinton’s private emails becoming front-page news in the midst of her presidential campaign.

A screenshot of the malicious WannaCry message that sent cyberspace into disarray.
A screenshot of the malicious WannaCry message that sent cyberspace into disarray.

The ever-increasing number of cyber attacks are costing organizations large amounts of money to address and prevent them. However, the delay in operations and the potential domino effect it will have on their customers could cost the company much more in money and reputation. It isn’t just the number of cyber security attacks that is increasing. The degree of these attacks is on the rise as well. PwC reported that these attacks are “becoming progressively destructive and target a broadening array of information and attack vectors.”

Digitization is quickly increasing the impact that these cyber attacks can have and the channels in which they propagate. With the expanding number of services available online, businesses are particularly vulnerable to increasingly sophisticated attacks. An example is a vulnerability as a result of the trend toward migrating data to the cloud. A publication by White & Case outlines some of the vulnerabilities as a result. The migration of data to third-party cloud providers creates a centralization of data – this creates more opportunities for misappropriation of stolen data from a single attack. Similarly, the emphasis on mobile services has opened up corporate systems to more users, exposing sensitive data that can have regulatory, reputational, and financial impacts. With the boundaries between digital and physical realms being increasingly blurred – particularly so with the evolution of the Internet of Things, the possibility that appliances and physical objects we interact with every day can be compromised. Hackers can exploit these devices to conduct data breaches, corporate or government espionage, and damage critical infrastructure like electrical grids.

With US federal agencies and other governmental agencies around the world under pressure to increase their levels of security to defend against crippling cyber attacks, businesses are expected to follow suit when regulatory pressure increases in response to increasing public awareness. Governments are already tightening regulation to ensure businesses take greater responsibility to prevent and detect cyber security breaches, for examples through tackling malicious VPN use. In the United States alone, 47 states have laws requiring breaches that result in the theft of customer data. A key policy that governs this area in the United States is the Data Security and Breach Notification Act of 2015, a companion to the Consumer Privacy Bill of Rights Act of 2015 that governs the collection and dissemination of consumer data. The European Union have also introduced similar regulations.

“Similar to other compliance areas, board directors can be held liable for not discharging their duty to prevent harm to the corporation. In performing their oversight role, directors should stay informed about the corporation’s cyber security defenses. They must ask what the risks are and determine what needs to be done to mitigate them. In today’s connected world, it is, unfortunately, becoming a question of ‘when’ rather than ‘if’ some sort of data breach will occur.” Detev Gabel, a partner at White & Case in Frankfurt and leader of the Firm’s Data, Privacy and Cyber Security Group.

New technologies and services such as dual authentication, phishing detection, and advanced encryption improve the defence against current threats. However, as these have become widespread, cyber criminals will look to shift their focus to other unidentified vulnerabilities. While the focus has predominantly been on purchasing and deploying technical controls, a risk culture around cyber security is key to fortifying cybersecurity in the organisation. A strong risk culture enables the organization to actively identify and prevent threats. Cybersecurity culture is defined by Rod Turk (Director of Ofefice of Cybersecurity) as “making sure that users — top to bottom, right to left — [are] keeping cyber security in their thought process no matter what they’re doing in the IT world”. Organizations need to ensure focus on individual responsibility and spread awareness of the role that each individual employee plays in ensuring that the organization is protected against cyber attacks. They need to address the need to educate employees on how the cyber security dots are connected to the organization’s ability to achieve its business objectives and avoid financial loss, regulatory implications, and reputational impacts.

Cyber crime is a threat to all organisations – it is up to business leaders to recognise the potential threat to ensure that their organisation is adequately prepared and protected from the risks associated with it.

How The Digital Age is Globalizing Business

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The expansion of trade has existed for millennia. Academics and economists contend that globalization, which has only gained relevance as a concept in the last decade, is as old as civilization itself. The concept of exchange, the underlying basis of market dynamics, was founded in primitive human societies. Markets began to merge as trading networks expanded and access to resources was made easier. As the Mercantilist and the Industrial revolution took place, growth and productivity continued to escalate. However, the a new commercial reality sparked by the digital age has emerged , characterized by widespread, and readily accessible sharing of information. This new era has transformed the commercial landscape into one which allows for unparalleled acceleration of globalization like never before.

According to a study conducted by Mckinsey, one in three goods now crosses national borders, and more than one-third of financial investments are international transactions. Time and geographical boundaries cease to be limiting factors in today’s business environment. The tremendous technological advances in transportation have reduced the barrier of distance a main catalyst in the development of global economics over the course of history. Over time, this has also steadily decreased the cost of distribution. A second major force shaping today’s economy is the internet, which has reduced barriers to communication. Through focusing on the online market and SEO, business is now borderless. Sales, inventory, competitor’s prices and new products now no longer have to rely on physical and unpredictable means of communication. More recently, is information communication in real-time.

One great example is the Internet of Things (IoT) which gives businesses the ability to monitor and manage objects in the physical world, digitally. This has remodeled logistics and supply chains, increasing efficiency. The technology of which the IoT is founded on, is Radio-Frequency Identification (RFID). RFID is now widely used for tracking and collecting information about a product, place, time or transaction. RFID uses electromagnetic fields to automatically identify and track tags attached to objects. Manufacturers and oil and gas companies, among others have improved their operating efficiency and reduce costs by implementing IoT technologies in their operations.

The development of information technology has also given rise to different digital platforms that makes cross-border production and exchange a lot more possible than they previously had been. In 2014, global e-commerce sales reached over US$1.3 trillion—nearly 2 percent of global GDP. About 40 percent of Amazon’s net sales in 2014 came from sales outside North America, and China’s leading e-commerce platform that includes marketplaces for business to business (B2B); business to consumer (B2C); and peer to peer (P2P) e-commerce, declared gross merchandise value of a whopping US$370 billion during the same year. These platforms allow smaller companies to participate in exporting and importing, and even compete with the largest multinationals. An MGI survey revealed that 86 percent of tech-based startups report some type of cross-border activity. Even global labor markets are being impacted by online marketplaces. Websites like freelancer.com and UpWork reduces yet another barrier in today’s unified global community by bringing jobs to talents abroad without requiring them to relocate or go through immigration.

The growth of the digital trade has thrusted us into yet another different era of knowledge economy, characterized by increase in high-technology and intangible investments, high-technology industries, more highly-skilled labor and associated productivity gains, rather than on the means on production and tangible capital (oecd.org). This has led to the emergence of new technology giants in industries where they had not previously been viewed as competitors. Consider Airbnb’s entry into the hospitality industry. The multi-platform technology platform has served over 30 million guests since its inception in 2008. Its current value of $10 billion now exceeds well-established global hotel chains such as Hyatt.

Today, over 2.3 billion people have access to the internet and this figure is expected to grow to five billion in the next few years. Some of the most valuable companies in the world have been underpinned by its existence. In developed countries, availability of the internet results in increased standards of living and job creation. The innovation of digital technology has become a key contributor to economic growth in developed countries. The potential for digital and information technologies is limitless, and will play a key role in the development of humankind’s potential.

The Untold Story of Silk Road and America’s Devastating Online Drug Industry

Ross Ulbricht: the mastermind behind America's grimacing online drug industry.
Ross Ulbricht: the mastermind behind America’s grimacing online drug industry.

The business environment has been drastically transformed by the rise of digital technology. Today, the name ‘Silk Road’ no longer depicts the textbook definition of the ancient network of trade routes. To tech-savvy millennials, ‘Silk Road’ refers to a massive online marketplace for illicit trade, mostly drugs. The website was hidden in what is called the Dark Web—a part of the internet that can’t be accessed through search engines like Google. To enter this mysterious cyber realm, you need special cryptographic software that obscures your online identity. But aside from that, the right amount of dedication and perhaps access to Reddit, it doesn’t take much else for anyone to enter and navigate the deep web.

The mastermind behind Silk Road was a 26-year-old kid from central Texas. After earning a scholarship to the University of Texas at Dallas, Ross Ulbricht landed a graduate scholarship at Penn State, where he studied materials science and engineering. A carefree idealist, he adhered to a libertarian philosophy and spent his college days exploring Eastern philosophy. Bright, handsome, and edgy, Ross Ulbricht was a Pablo Escobar in the digital age. At the peak of his success, Ulbricht lived in Glen Park, San Francisco where he would run his virtual drug empire out of little coffee shops and libraries. Only that the magnitude of his startup’s success justifies his comparison against the Colombian drug kingpin. Through a combination of Tor (The Onion Router) anonymous browsing and enticing web design, Silk Road managed to rack up more than $1 billion dollars in sales in two years.

A screenshot from Silk Road's glory days. The site is now shutdown.
A screenshot from Silk Road’s glory days. The site is now shutdown.

The combination of an anonymous interface with traceless payments allowed thousands of drug dealers and nearly 1 million eager worldwide customers to connect —The internet has not only affected how business is conducted, it has also reshaped the criminal landscape. As the first online platform for the drug trade, Silk Road represented an unexplored intersection between technology, commerce, and drugs. This was a serious threat to law enforcement agents. Various governmental organizations spent over a year attempting to infiltrate the organization. When the site was taken down in 2013, the closure took out 13,648 different drug deals.

Ulbricht was sentenced to life in prison without parole. Fast-forward five years later now, and the explosive growth of the industry is proof that the giant crackdown was ineffective as a deterrent for illicit activity on the dark web. The online black market continues to evolve and now turns over $100 million of illegal substances a year. This “invisible” network now boasts dozens of boutique single-vendor sites selling high-quality cannabis, LSD, or cocaine to a closed network, and some offer membership discounts to regular buyers. Adam Winstock conducted the Global Drugs Survey, the largest inquiry into drug-user habits, and revealed that “convenience, product choice, price and user ratings make buying drugs online attractive to some users”, and growth in this industry is reflective of the growth of e-commerce as a whole.

With fatal adulterants found in recreational drugs off the street, the communal nature of many of the sites which assist in the regulation of drug purity provides users a safer way of obtaining drugs. This was exactly the idea which had inspired Ulbricht to create ‘Silk Road’. Like most libertarians, Ulbricht believed that drug use was a personal choice and that the war on drugs was entirely futile. The problem lied in the drug business that was opaque and violent, and that a website like Yelp would make exchanges more transparent and reduce fatal overdoses. Ulbricht also wrote that his intention was to reduce the power of cartels by empowering nonviolent, small-time dealers. According to a paper published online by academics, the crypto market may have prevented bloodshed that would have occurred in the street. Online drug trade focused far more on less addictive and harmful drugs than might have been previously assumed: “Drugs typically associated with drug dependence, harmful use and chaotic lifestyles (heroin, methamphetamine and crack cocaine) do not much appear, and generate very little revenue”.

The full effect of the online drug industry on society is still unknown. The key question is how this industry is governed in the future. Loopholes in legislation were arguably the catalyst for this industry to begin with.

Why America’s Tech Industry has the Responsibility of Solving Global Development Challenges

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Forbes contributor Gary Shapiro wrote an article expressing his insistence on America’s greatness as a nation, despite its flaws in response to a clip from the HBO series, The Newsroom. Titled the “most honest three and a half minutes of television ever”, the short clip delivers a harsh soliloquy on America’s decline. Aside from addressing the inaccurate statistics, Shapiro brought up multiple premises for his argument – one of them being the high numbers of immigrants that the United States attracts for its quality education.

Government officials of China strive to send their children to US schools, with 160,000 of their youth enrolled in American colleges or universities as a result of the “culture of innovation that we imbue”. This is self-explanatory even to those who have never stepped foot in the country— with Silicon Valley, Wall Street, Hollywood, and 17 of the world’s top 20 universities, Shapiro argues that the United States is a world leader in every aspect. Like it or not, the country is the most dominant in the key categories of power, even if there is denial by American citizens themselves – a testament to their righteousness. The economic, military and influential strength of the United States is unmatched by any other country in the world. At USD $16 trillion, its GDP is more than twice the size of China’s. Spending 560 billion dollars a year on military, the country has the most powerful military in the world and maintains good diplomatic and trading relations with almost every major nation.

No other country has the same authority in the international community and global footprint as the United States. I hold a strong belief in the importance of global cultural diversity that can be attributed largely to my years of study in the United States. With much of the world under the influence of Western society, few other places would have granted me the same educational and cultural background to appreciate diversity.

The United States’ influence can be attributed to two driving forces: vast natural resources that created opportunities for individual initiative and enterprise, and the country’s investment in science, engineering, aerospace, and technology as a result of competition with the Soviet Union. Both public and private sector investment contributed to employment, industrial growth, and innovation that placed it as a world leader in many different fields. In terms of domestic goals, the country is unrivalled. In the later years, plenty of their efforts had been directed towards people of other nations striving to fight for their liberties and democratic freedoms against the assault of power by those who would have chosen to forsake democracy in pursuit of forced dominance in the world.

The dynamism of America’s tech industry backed by its deep involvement with research and development and STEM will be key to a sustainable future. In the next two decades, the human population is expected to rise by 2 billion, with 95 percent of them in developing or underdeveloped countries. This growth will create unprecedented demands for basic needs of for water, sanitation, nutrition, health, safety and meaningful work. As globalization takes hold, a paradigm shift must occur which sees the world as a single unit rather than separate nations. Currently, countless American tech giants concentrate almost exclusively on developed markets – with a large focus on advertising and pay-per-click campaigns (PPC) to drive profit from mostly Western regions. Although these are the fundamentals of any business, Americans must work towards a new goal of contributing to the building of a more sustainable, stable and equitable world. These people will hold a critical position in fulfilling the basic needs of the global community and addressing more complex problems in regards to refugees, displaced populations, and the large-scale movement of populations worldwide resulting from political conflicts, famine, shortages of land, and natural hazards. These issues call for American education in science, engineering, and technology to solve the problems of developing countries. An example would be the Engineering for Developing Communities (EDC) founded by The College of Engineering at the University of Colorado. The program has an overall mission to globally educate students in providing sustainable, appropriate technology solutions to the endemic problems of developing communities worldwide. Such collective efforts will ultimately determine the well-being of future generations to come.

Tags: International Development, Engineering for Developing CommunitiesGlobalization