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Economics Seeps Into Intelligence Assessments

The first globally synchronized economic recession since the Great Depression is causing repercussions far beyond home foreclosures, skyrocketing fuel prices and lost jobs. In the intelligence realm, analysts find themselves considering its ramifications on politics, governments and security. Even cyberspace, an environment that is tenuously secure at best, may be feeling the effects of a stagnant economy as organizations—both public and private—put off investments in both security upgrades and research.

Analysts have begun to put on a lens that focuses on the economic aspect of countries' behaviors. This new lens is not one that is natural for analysts, a senior U.S. intelligence official says. It means considering a number of factors, including the effects of technology. And, in a globalized society, the economic shock—both positive and negative—can be stronger and more widespread.

Although the impact of the economic recession has had a larger effect on some nations more than others, few countries have remained unscathed. Initially, the crisis in the financial markets was the nexus of the problems experienced in the industrialized world, sparing many emerging market economies from the first phase of the economic downturn. However, once consumer demand from industrialized countries sharply contracted, the economic crisis began seeping into market-based nations’ economies.

Financial instability can lead to political changes that may or may not improve security worldwide. There already has been fallout from the crisis, especially in Europe. On the other hand, in some instances incumbent governments have been re-elected with an even stronger mandate. India is one example, the official says.

Although the economic crisis is a threat to U.S. security, it is uncertain whether it is the largest menace the country faces today. The intelligence official allows that some interpreted Dennis C. Blair’s testimony before the Senate Select Committee on Intelligence in February 2009 that way because it was his first topic. However, Blair, who is the director of national intelligence (DNI), in fact described the economic crisis and its geopolitical implications as the primary near-term concern the United States faces.

The apprehension includes how the crisis could feed into security threats from terrorism or a shift in focus from security issues to economic issues. When public resources are being spent on subsidies to citizens, less are available for national security or fighting the Global War on Terrorism. In some cases, countries facing an economic crisis may be tempted to sell out to the highest bidder.

Continued uncertainty about the impact of the economic crisis on national security leaves a number of unknowns about the future health of economy and financial systems. A shock of any kind, including the failure of a major corporation, could undermine the progress of the still-recovering banks and financial institutions. Something as seemingly unrelated as a worldwide outbreak of the H1N1 influenza this fall could have economic fallouts if people limit their visits to retail outlets, hotels and restaurants, the official points out.

The Internet may be one place consumers would turn to should the H1N1 influenza reach pandemic levels. However, the economic downturn has had ramifications in this environment as well. Ed Granstedt says work on new solutions to quash cyberthreats is being delayed because innovation, invention, adoption and information technology expenditures are shrinking. Granstedt is the vice president of strategy, mission solutions group, national systems, QinetiQ North America.

According to Granstedt, the threat can be broken down into three drivers. Digitization allows nearly everything to be converted into a zero or a one; information can then be processed and rapidly exploited; and standardization moves information around the world.

From the cyberspace intelligence aspect, organizations must stop operating in a local way. Instead, they must examine their systems in a global context and create a global situational awareness. They must begin forecasting the problems they will face in cyberspace security, and then bring that analysis back into local relevance, he recommends.

To some degree, U.S. leaders will have to "place the right bets" about what they think will be important and relevant to the future. It is too soon to tell whether they are placing the right bets now. "We're not going to know that until we get downstream of this," Granstedt states.

The downturn in the economy is affecting adversaries as well, making cost-effective cyberattacks attractive, he allows. Adversaries have easy access to sensitive information, and the safeguards are not yet commensurate with the value of that information, and this troubles him.

During this time of economic recovery, some steps can be taken to help ensure cybersecurity, he believes. One approach would be to offer incentives to companies to invest in information systems security. Another is to view cybersecurity not only as an information technology department function but also as a core critical element to every aspect of an organization's mission and make a commensurant investment in information security, Granstedt advises.

 

Read the expanded version of this article in the October 2009 issue of SIGNAL Magazine, in the mail to AFCEA members and subscribers October 1, 2009. For information about purchasing this issue, joining AFCEA or subscribing to SIGNAL, contact AFCEA Member Services.