Donald Trump made some questionable remarks this week that have rightly caused an almighty backlash. But one thing he did that may have more support, is sign an executive memorandum which will most likely lead to a lengthy investigation into alleged widespread Chinese theft of US IP. This is a big deal in Silicon Valley and something that has irked US business in general for years.
The question is, will this latest strategy actually result in any concrete changes on the Chinese side? As you can see from this new IDG Connect piece, I’m not convinced.
Years of theft
There are few things Democrats and Republicans agree on, but one is that China has had things far too long its own way when it comes to trade. The US trade deficit between the countries grew to $310 billion last year, helped by the growing dominance of Chinese businesses. Many of these have been able to accelerate their growth and maturation thanks to IP either stolen by hackers from US counterparts or take via forced joint ventures and tech transfers. Many of them are selling back into the US or their huge domestic market, undercutting American rivals.
Chinese firms don’t have the same restrictions around forced JVs and tech transfers to enter the US market. In fact, the likes of Baidu even have Silicon Valley R&D centres where they’re able to recruit some of the brightest locals, while government-backed VC firms have been funding start-ups to continue the seemingly relentless one-way IP transfer.
There are, of course, more nuances to the dynamic, but you get the point.
So, will this investigation get us anywhere? After all, it will empower the President to take unilateral action including sanctions and trade embargoes. Well, on the one hand, little gain can be made from stopping Chinese IP hackers, as they have stopped outright theft ever since a landmark Obama-Xi deal in 2015, according to FireEye Chief Intelligence Strategist, Christopher Porter.
“If anything, discontinuing straightforward theft of intellectual property for strictly commercial purposes has freed up Chinese actors to focus more on these other targets than ever before, so the risk to companies before and after the Xi Agreement depends heavily on what industry that company is in and what sort of customer data they collect,” he told me via email.
That’s not to say the Chinese aren’t still active in cyberspace, but it’s less around IP theft, which is the focus of this investigation, Porter added.
“We have seen an increase in cyber threat activity that could be Chinese groups collecting competitive business intelligence on US firms selling their products and services globally—several companies that were targets of proposed M&A activity from would-be Chinese parent companies were also victims of Chinese cyber threat activity within the previous year, suggesting that they may have been targeted as part of the M&A process to give the Chinese company a leg-up in negotiations,” he explained.
Which leaves us with JVs and tech transfers, which have provided Chinese companies with vital “know-how” and “know-why” over the years. To my mind, if there’s any area where the US can and should focus its diplomatic and negotiating efforts, it’s here. However, as reports in the past have highlighted, it took China years to construct a gargantuan, highly sophisticated tech transfer apparatus, and it won’t be looking to bin that anytime soon, especially with the Party’s ambitious Made in China 2025 strategy now in full swing.
Neither side will want to become embroiled in a trade war. The US has too many companies which count China as a major market – it’s Apple’s largest outside the US, for example – and Chinese firms are doing very well selling into the US, as that huge trade deficit highlights.
In the end, my suspicion is that this is just another bit of Trump tough talk which will actually produce very little.
“This long-awaited intervention should also probably be viewed in the larger picture of the way the Trump administration operates: in terms of ‘carrot and stick diplomacy’,” Trend Micro European Cyber Security Strategist, Simon Edwards, told me.
“It is also well documented that the US administration is trying to use trade deals to get action on the situation in North Korea; and perhaps this is more of a stick to be used with the accompanying ‘carrot’ of a greater trade deals?”
Time will tell, but it’s unlikely that US tech companies operating in China, and their global customers, will be any better off after this latest test.
We all know that skills shortages in IT, and information security in particular, are endemic. Globally, the industry is expected to need 1.8 million more workers by 2022, according to the Center for Cyber Safety and Education and (ISC)². One sure fire way to reduce this imposingly large total would be to encourage more women into the industry.
With that in mind, a new report, Women in Cybersecurity, makes for fascinating reading.
The report was compiled by Caroline Wong, VP at pen testing firm Cobalt, on the back of interviews with hundreds of female IT security practitioners in the US, UK, Singapore, Australia and elsewhere.
“Recent press coverage on the topic has a tendency to focus on the negative – under-representation, unfair pay, and challenges in the workplace,” she told me.
“These aspects are true, however I know there’s a story that’s just as true, and that’s how many women in the field are thriving. I personally know so many women – and now I have the data to back it up – that love their jobs, feel deeply satisfied by the work they’re doing, and are tremendously successful.”
One of the key takeaways from the report is the need for employers to prioritise diversity in their hiring. Often firms narrow their options too far by failing to consider candidates from other backgrounds. According to Wong, it’s critical that hiring managers are engaged in the process and thoughtful about what skills are needed for particular roles. In fact, over half of those women she spoke to had no IT or computer science background when entering the industry – but instead had experience in areas as diverse as compliance, psychology, internal audit, entrepreneurship, sales, and even art.
“I was pleasantly surprised by the seniority and diversity of the women who responded to the survey. The topic of women in cybersecurity has received more press in the past few years than ever before, and I think it’s possible for readers to assume that women working in this field is something new – it’s not,” concluded Wong.
“Some 36% of respondents have been working in the field for 10 or more years, while 53% have been working in the field for more than five years.”
So, listen up hiring managers. Try thinking outside the box when you’re next looking for candidates. The cybersecurity industry desperately needs fresh blood, and women make up a paltry 11% of the workforce globally at present. This needs to change – and fast.