August 1 2013

More Than Privacy Is At Stake

Mercury One Orbit

Carrie L. Lukas

Many Americans were aghast to learn of the scale of government’s data collection of the public’s communications.  Especially against the backdrop of the politicization of the IRS, Americans are rightfully concerned that this practice opens doors to abuse.

Part of the problem is that technology, for all of its benefits, has made us more vulnerable. Once private information—about our personal finances, relationships, movements—is now laced into a technological web, which can be easily penetrated by the public. The question Americans are left asking is, how can we continue to exploit the unbelievable benefits of modern technologies while protecting private information?

  This issue is important, not just to our sense of personal space or for national security, but because it also has profound economic implications.  That’s especially true since it isn’t just our own government that is infiltrating what was once private information, cyber hackers—including those employed by foreign governments—are too.

The General Accounting Office found that in 2012 federal agencies reported 46,562 cyber security incidents, which “have placed sensitive information at risk, with potentially serious impacts on federal and military operation; critical infrastructure; and confidentiality, integrity, and availability of sensitive government, private sector, and personal information.” 

  Yet it’s not just our government’s secrets that are at risk.  The Virginia-based cyber security firm, Mandiant, recently released a report detailing the Chinese People’s Liberation army’s persistent cyber attacks on U.S. corporate entities.  The report alleges that since 2006 a single unit has successfully infiltrated “141 companies spanning 20 major industries, from information technology and telecommunications to aerospace and energy,” allowing them to steal “large volumes of valuable intellectual property.”   

The numbers involved are staggering.  The National Security Agency Director, Gen. Keith Alexander, called cybercrime “the greatest transfer of wealth in history.” The price tag for all intellectual property theft from U.S. companies is at least $250 billion a year.  That’s far more than what businesses pay in federal corporate income taxes.

  This massive lost income means fewer jobs, reduced pay, and a lower standard of living for Americans.  It also discourages investment in innovation that is key for increasing our quality of life in the future.  Businesses and potential investors today are asking, why pour resources into research and development when that information and innovation may just be stolen?

Even more troublingly, respect for property rights has fallen so low that some of the theft is taking place in plain view.  As the Chamber of Commerce’s Mark Elliot reported, on April 1 India’s Supreme Court decided to deny a U.S. based drug company, Novartis AG, a patent for a ground-breaking cancer medication (Glivec), in spite of 40 other companies having recognized the patent and Novartis’s right to protect its intellectual property.

  This may not sound like a big deal—few are crying over big drug companies losing a little profit—but it has enormous implications for how much people will continue to invest in developing the next round of medical breakthroughs.  People may instinctively object to the high costs of many new drugs and treatments (often overlooking the programs designed to help those who cannot afford them gain access), but companies and investors have to recoup the resources spent on the incredibly costly process of bringing a drug to market. Otherwise, new treatments and cures just won’t be developed.

Protecting intellectual property and cyber privacy isn’t just about people wanting to prevent embarrassing personal information from being revealed to the public.   This is a major economic issue that deserves ongoing attention.  Our government needs to carefully delineate the proper boundaries for its own use of technology and information gathering, and find better ways to protect Americans’ intellectual property rights.

Carrie Lukas is the managing director of the Independent Women’s Forum (www.iwf.org).

 

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