National Cybersecurity Innovation

Abstract

National cybersecurity plays a crucial role in protecting our critical infrastructure, such as telecommunication networks, the electricity grid, and even financial transactions. Most discussions about promoting national cybersecurity focus on governance structures, international relations, and political science. In contrast, this Article proposes a different agenda and one that promotes the use of innovation mechanisms for technological advancement. By promoting inducements for technological developments, such innovation mechanisms encourage the advancement of national cybersecurity solutions. In exploring possible solutions, this Article asks whether the government or markets can provide national cybersecurity innovation. This inquiry is a fragment of a much larger literature on various innovation policy options (including patents, prizes, grants, and research and development tax credits). It requires determining whether national cybersecurity is a public good and an examination of market failure and government failure. Along the way, it draws on a property-liability rules theoretical framework to argue that the patent system’s invention secrecy restrictions and government patent use are ineffective for national cybersecurity innovation. On a normative level, the interface between government intervention and markets presents innovation mechanisms for national cybersecurity. Turning to prescriptions, expansion of prizes should rapidly promote national cybersecurity innovation, and reciprocal public–private research and development interactions should gradually multiply knowledge spillovers.

Keywords: cybersecurity, national security, critical infrastructure, invention secrecy, government patent use, patent rewards, property-liability rules, eminent domain, public goods, innovation, public-private, prizes, CRADA, public finance, IoT, cyber-physical systems, SmartGrid, cryptography, SCADA