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Manufacturing Cybersecurity: Not Just A China Issue

Posted By Paul Tate, June 10, 2013 at 12:00 PM, in Category: Cybersecurity

As President Obama and Chinese President Xi Jinping settled into their ‘informal’ Californian-desert Summit last weekend, the issue of Cybersecurity was already very much on their discussion agenda.

Recent months have seen a rising clamour of U.S. accusations of Chinese cyber spying. In February, cyber intelligence firm Mandiant suggested extensive hacking by a unit of the China’s People’s Liberation Army had gathered proprietary information on more than 100 major companies including their product blueprints, manufacturing plans, clinical trial results, pricing documents, negotiation strategies and other internal data.

A report sponsored by computer-security company Symantec also estimated that U.S. companies lose roughly $250 billion annually because of IP theft (although not just to China, of course). This prompted National Security Agency claims that China’s attempts to steal corporate intellectual property had led to “the greatest transfer of wealth in history.”

And last week, Scott Paul, president of the lobbying group the Alliance for American Manufacturing, urged Obama to raise strong objections during his China Summit over the potential theft of defence equipment secrets.

Even on the day before the latest US/China summit, a new bill was presented to U.S. lawmakers in Washington called the Cyber Economic Espionage Accountability Act. Sponsored by House Representatives Mike Rogers and Tim Ryan, and Senator Ron Johnson, it urges the Department of Justice to punish foreign hackers with a series of measures ranging from criminal prosecution, to denying offenders access to the U.S., freezing their assets and revoking visas for any who are already U.S. –based.

“Stealing intellectual property not only threatens the manufacturing jobs we have—it threatens the jobs we are trying to create. We need to ensure that countries like China and Russia no longer gain a competitive advantage through cyber crimes,” said Tim Ryan.

These are indeed serious concerns, and worthy of geo-political debate at the very highest levels. Nevertheless, manufacturers shouldn’t be distracted by the alleged conduct of any single foreign economic power when it comes to the serious business of cybersecurity. It’s a far bigger problem than that. There are multiple issues involved - and not just for U.S. manufacturing companies.

For example, the latest 2013 nine-country Cost of Data Breach Study published by the Ponemon Institute last week, notes that companies in Germany are in fact most likely to suffer from malicious or criminal digital attack, followed by firms in Australia and Japan. And across all nine countries, 64 per cent of all data breaches were actually due to human error or system glitches – and not criminality. 

This rising combination of multiple digital vulnerabilities already has, and will continue, to cause major operational problems for manufacturing companies in today’s increasingly technology-dependant, IP-enabled, cloud-friendly business world.

That’s why Cybersecurity was such a hot topic for attendees at last month’s 2013 Manufacturing Leadership Summit in Palm Beach, Florida. In a special meeting of the Manufacturing Leadership Council, members agreed that cyber disruption and theft were now becoming such important issues for the future of the manufacturing industry, that the topic of Cybersecurity should be added as a whole new category to our Critical Issues Agenda for the year ahead.

Many Summit attendees also participated in a special Think Tank session on the Cybersecurity issue, strongly recommending that manufacturing companies should stop being merely reactive to the increasing wave of digital threats, but should become far more pro-active in their security measures, even suggesting the development of digital attack software that can identify and disable potential threats before they have the chance to cause major disruption.

Clearly, whatever outcomes emerge from the latest U.S./China Summit last weekend, or the current legislative attempts to punish digital offenders, manufacturing Cybersecurity is fast becoming an essential aspect of leadership and operational efficiency for the modern manufacturing sector.

What’s your view? How important is Cybersecurity to your manufacturing enterprise today? Do you already have a Cybersecurity strategy in place? What are your plans for the future?

* Watch out for more critical insights, the latest global industry developments, and the exclusive results of a special survey on Manufacturing Cybersecurity over the months ahead.



Category: Cybersecurity
Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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