The Dark Side of Technology

• Author: Chris Wellisz

The Dark Side of Technology Finance & Development, September 2016, Vol. 53, No. 3

Chris Wellisz

The benefits of the digital age are tempered by the risks

Digital technology has given us comforts and conveniences that could scarcely be imagined even a generation ago. The Internet saves students and scholars hours of tedious research in libraries and enables instantaneous visual, oral, and written communication at virtually no cost. Anyone with a smartphone can use GPS to avoid getting lost in an unfamiliar city or find the nearest Starbucks. There’s online shopping and banking for consumers and computer-aided diagnostics for doctors. Such are the wonders of the digital era that scholars Erik Brynjolfsson and Andrew McAfee have dubbed it “The Second Machine Age,’’ declaring that computers are doing for our mental capacity what the steam engine did for muscle power.

But there are drawbacks to progress. Some critics of the digital era lament the power of a few giant social media outlets to shape public opinion. Others raise serious concerns about pathologies such as cyberbullying and Internet pornography. And there are those who worry about the potential loss of privacy, and the danger to civil liberties, at a time when practically every movement, phone call, and email message leaves a digital trail that can be exploited by a nosy neighbor or an intrusive government.

While these are all legitimate concerns, they are impossible to quantify. Yet some aspects of digital technology do impose measurable costs on companies and economies that offset at least part of the efficiency offered by the second machine age.

Hackers can take control of cars or shut down an electric grid. Cyberthieves steal personal information and use it to drain bank accounts or make fraudulent online credit card purchases. Email, mobile phones, and social media, while revolutionizing communication, take a toll on the productivity of office workers mesmerized by their Twitter feeds or addicted to instant messaging.

Cybersecurity RisksWhen a group of former officers from Unit 8200, Israel’s signals intelligence corps, set out to start a private cybersecurity business, they agreed that Internet-connected cars were the next big thing.

“They just looked at what was going on in the markets and they thought, OK, there are going to be millions of connected cars on the road quite soon,’’ said Yoni Heilbronn, vice president for marketing at Argus Cyber Security Ltd.

Three years later, Tel Aviv–based Argus has added offices in Germany, Japan, and the United States. The company is flourishing as stories about hackers taking control of cars—not to mention accidents, though not hacking, linked to the autopilot feature of Tesla Motors vehicles—focus public attention on the need to improve automotive cybersecurity.

Welcome to the Internet of Things—objects connected to a network that allows them to send and receive data—which is expanding to include devices ranging from diagnostic equipment in hospitals to coffeemakers and other home appliances. This year, the number of Internet-enabled devices will expand 30 percent to 6.4 billion, predicts Gartner Inc., a leading information technology research and advisory firm. Worldwide spending on security for the Internet of Things will jump 24 percent to $348 million.

A connected world offers new opportunities for cybercriminals to gather personal information that can be used for fraudulent transactions or for ransomware—malicious software that can immobilize devices or encrypt data and demand money in return for a decryption key.

“It’s a new point of access for the fraudsters,’’ says Bradley J. Wiskirchen, chief executive officer of Kount, an Internet security firm based in Boise, Idaho. “They don’t necessarily have to hack into my computer if they can hack into my printer or refrigerator and collect data on me.’’

Hacking into Internet-enabled household...