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The Economic Impact of Encryption [Encryption Digest 46]

The Economic Impact of Encryption [Encryption Digest 46]

economic impact of encryption
July 31, 2020 | Emil Hanscom

Encryption can play a vital role in the fiscal success of a nation. If lawmakers break encryption, local companies suffer the consequences. On the other hand, countries that value encryption open themselves up to economic opportunities.
 

In our latest Digest, we examine two stories about nations that take vastly different approaches to encryption.


 

 

Australia’s Tech World Feels the Pain After Encryption Breaking Law

Back in 2018, Australia passed an aggressive encryption bill. According to previous commentary from Venafi: “The new legislation gives the government’s security and intelligence agencies the legal authority to compel tech companies to break their encryption. It would require tech companies to provide law enforcement and security agencies with access to encrypted communications.”
 

Security experts strongly opposed the bill, stating that it could cause lasting damage to Australia’s growing technology industry. Now, it seems those fears were well-founded. Software development company, Atlassian, recently discussed how Australia’s encryption laws are having a negative impact on partnerships and recruitment.
 

As ZDNet writes: “The Act's passage has significantly degraded the global reputation of the Australian tech sector, as local companies and multinationals alike question whether actions compel them to the Act will degrade industry's ability to secure customer data and place their employees at individual peril," Atlassian head of IP, policy, and government affairs Patrick Zhang said.”
 

Hopefully, Atlassian’s revelations will serve as a warning to other nation’s considering similar encryption breaking bills.
 

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Trade Deal Stipulates Encryption Keys Must Be Protected

Meanwhile, Japan and Britain are taking a different approach when examining the economic impact of encryption. The two nations are currently discussing a major trade deal and have agreed not to disclose encryption keys or algorithms as a part of the pact.
 

As Reuters writes: “Under the bilateral deal, the two governments would not force their companies to hand over encryption keys, which are used to protect proprietary corporate technology and information, the Nikkei said. The two nations are expected to agree not to force companies to set up servers and other related facilities within their borders and to protect the free flow of data, the report said.”
 

This agreement could be the beginning of an international framework to uphold encryption technology. Many organizations may soon realize that encryption provide a beneficial impact on international and local economies.
 

After the situation in Australia, hopefully other nations take a more positive approach to encryption.
 

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About the author

Emil Hanscom
Emil Hanscom

Emil is the Public Relations Manager at Venafi. Passionate about educating the global marketplace about infosec and machine-identity issues, they have consistently grown Venafi's global news coverage year over year.

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