The digital economy is set to unlock tremendous economic value for countries over time. But a common setback for the use of various new technologies is their vulnerability to hackers.
That’s because companies and individuals are not taking cybersecurity seriously, according to Erik Brynjolfsson, director at the MIT Initiative on the Digital Economy and a professor at MIT Sloan School.
The threat of cyber-attacks “can be addressed much more effectively than it has been,” he told CNBC’s “Street Signs” at the annual Barclays Asia Forum in Singapore. “I think we’re just not taking it seriously enough.”
Brynjolfsson was commenting on the news that a Google bug exposed the account information of 500,000 users, spurring the tech giant to make a slew of privacy changes and shut down the Google Plus service for consumers.
“The story here isn’t really about Google, it’s about our atrocious cybersecurity — not just in social networks, but in banking or voting systems,” he said. “Whenever I talk to the real cyber experts, they tell me the lights are blinking red, that we’re so vulnerable, and we need to do a lot more to make our information system secure.”
There have been numerous incidents in recent years where technology companies suffered breaches that resulted in user data getting compromised: Uber was fined for a 2016 data breach, Facebook recently discovered a security issue that allowed hackers to access information that could have let them take over around 50 million accounts, and the personal information of millions of Americans was affected in a data breach at credit reporting firm Equifax last year.
Combating cyber threats “boils down to prioritizing at a higher level,” Brynjolfsson said. Some of the fixes are straightforward: For example, he said, two-factor authentication might prevent unauthorized logins and machine-readable paper ballots could make voting systems more secure.
“These small additional steps, they may slow down some of the processes incrementally, add a little bit of cost, a few percent here and there, but they’ll make us tremendously more secure,” he said.
In cybersecurity, he explained, using publicly available cryptography is usually more secure than proprietary systems that are built for specific companies — that’s because the former is extensively tested by the cryptography community.
Digital economies are set to grow as companies spend more money to transform their businesses using technology. International Data Corporation said that in 2018, worldwide spending on digital transformation will shoot past US$1 trillion.
Cybersecurity challenges aside, there are plenty of benefits in a digital economy, according to Brynjolfsson.
Artificial intelligence, for example, can make the world more interconnected and specific developments in areas of vision systems, speech recognition, and decision-making about credit or hiring are creating plenty of opportunities, he said. Still, it will be a challenge for society to help workers who lose their jobs to automation transition into new roles, Brynjolfsson added.