Editions : July-September 2016

JOURNAL | POINT OF VIEW By: Alan Dupont

Prime Minister Malcolm Turnbull’s aim is to make Australia a cyber-smart nation. This is a formidable undertaking requiring sustained investment in cyber architecture and intellectual capital, major cultural change and a genuine cyber partnership between government, business and the wider community that has yet to materialize.

His starting point is that the Internet is the most transformational technological development in human history and therefore central to Australia’s future prosperity and security. It’s hard to argue with this proposition. Australia is already a wired economy. Nearly 90 percent of Australians are online, including 84 percent of small and medium-sized businesses. The Internet-based economy contributed $57 billion (79 billion Australian dollars), or 5.1 percent of gross domestic product, in 2014, which could grow to $100 billion, or 7.3 percent of GDP, by 2020. By 2019, the average Australian household will have 24 devices connected online.

But it’s not just humans who are connecting to the Internet. Machines are too, in ever-increasing numbers. Cars, fridges, power plants – just about every device we use has the capacity to communicate autonomously with other machines. By 2020, the Australian government estimates that there may be 50 billion devices connected to the Internet globally. John McAfee, a cybersecurity pioneer, believes the figure is likely to be 212 billion. The “Internet of Things” is increasingly the “Internet of Everything.”

Australia has been slow off the mark to understand and capitalize on the enormous economic potential of this cyber revolution. There are too few cyber entrepreneurs, business still regards cybersecurity as a technological, rather than a strategic issue, and there is an educational and vocational mismatch between what the digital economy needs and what Australia’s schools and universities provide. It’s still a long way from being a cyber-smart nation.

By contrast, a small country like Israel has embraced the cyber revolution, attracting 20 percent of global private sector investment in the burgeoning cybersecurity industry and joining the United States, Russia, China and Britain as an emerging cyberpower. Israel is nurturing a new generation of cyber-literate young people in its universities and schools, right down to the primary school level.

The good news is that the Cybersecurity Strategy puts Australia on a path to addressing the nation’s digital deficiencies by fostering a new network of cyber research and innovation. At its hub will be a Cybersecurity Growth Center that will define and prioritize cyber challenges. Cybersecurity centers of excellence in universities will be established to help address the serious shortage of cybersecurity professionals. They will be linked to previous initiatives designed to boost the country’s dwindling stocks of scientists, technologists, engineers and mathematicians.

However, these commendable steps and the accompanying four-year commitment of $166 million are insufficient to realize Turnbull’s vision, which requires nothing less than a cradle-to-grave investment of a kind rarely seen in Australia, starting with primary school education. Cyber literacy has to become an intuitive and foundational skill for all Australians.

A second impediment to realizing the full potential of the Internet is the rapid increase in malicious cyberattacks, which have grown exponentially in number and sophistication during the past decade to unprecedented levels. An estimated one million Australians were victims of online identity fraud in 2014, and cybercrime may be costing the economy as much as $12 billion annually. One in three Australian businesses have experienced some form of cybercrime. Deloitte, a professional services firm, ranks Australia as one of the five most vulnerable economies to cyberattacks in the Asia-Pacific.

The loss of intellectual property and state secrets in electronic smash-and-grab burglaries is an even more serious issue, because they are the crown jewels that determine a country’s competitive position and capacity to defend itself. Malicious actors who inhabit the cyberworld’s dark side and include criminals, terrorists, spies and hostile states undermine trust in the reliability and security of the Internet. So improving cyber defenses and sensitizing Australians to the risk is central to the government strategy’s success.

The core problem is finding the right balance between protecting users through better security and regulation, and maintaining an open and free system. In Turnbull’s words, Australians “must ensure that the administration of the Internet continues to be governed by those who use it – not dominated by governments. Equally, cyberspace cannot be allowed to become a lawless domain.”

Unfortunately, there are daily reminders that the bad guys are winning. The following headlines, taken from a representative selection of international news stories, give a sense of what a lawless Internet could mean: “Two teenage hackers crack Brinks smart safe in less than 30 minutes”; “Pirates hack into shipping company servers to identify booty”; “Islamic State brainwashes youth online”; “Electricity grid at risk, says spy boss.”

Despite the increasing coverage of stories about the dark side, most Australians do not see cyberthreats as first-order security issues because of the reluctance of governments and business to openly discuss the challenge. Governments worry about revealing sensitive intelligence methods. Companies fear a loss of reputation or business to competitors in publicly revealing the loss of intellectual property, personal data or money from a successful hack.

Another reason, according to Alastair MacGibbon, Turnbull’s new special adviser on cybersecurity, is Australians “seem to think that cyberattacks have no offline or kinetic effects,” unlike a highly visible and obviously destructive terrorist bomb, conventional war or natural disaster. Not being able to see the perpetrator, or vicariously share the anguish of victims, diminishes the emotional impact of a cyberattack.

Regrettably, cyberwars with real kinetic effects are already a reality, since it is possible to destroy a power generator with only 21 lines of malicious code, as Russian hackers demonstrated last December with a devastating attack on Ukraine that left 230,000 Ukrainians in the dark and was the first confirmed hack to take down a power grid. In championing the virtues of an open, free but secure Internet network, Australia’s Cybersecurity Strategy has struck the right balance between advancing and protecting Australia’s economic and security interests in the digital age. But the jury is still out on the ultimate measure of success: the creation of a dynamic digital economy supported by a resilient cybernetwork.

 

Alan Dupont is adjunct professor of international security at the University of New South Wales in Sydney and a nonresident senior fellow at the Atlantic Council in Washington. A version of this essay first appeared in The Weekend Australian in April.



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