Cybersecurity’s Growing Prominence in Investment Decisions

October 30, 2023

“We’ve been hacked” is a statement that strikes fear into C-suite executives. Since the dawn of the digital age, businesses and governments alike have contended with digital network risks. The meteoric rise of cloud computing, while making tremendous gains in the sharing and storing of large amounts of data, has exposed our information in unimaginable ways.

So, how do companies make location decisions that help protect their networks, data, and business continuity? While data protection is not the number one thing on the average company’s list (data centers excepted), it is a part of the decision framework. How highly it ranks, like many other factors, is a function of how sensitive their data is (think personal financial data or government and military secrets) and how vulnerable they are to cyber security risk independent of location, with far-flung, multi-nodal networks having a greater risk.

States and communities can make themselves more attractive to companies by having three things: a strong resiliency, a well-designed regulatory environment, and resources to help combat breaches and quickly recover when they do occur.

Just as utilities need to be resilient in the face of natural and man-made threats, so must communications networks. Locations that have invested in critical, redundant, and resilient digital infrastructure will be better able to withstand and recover from cyber security risks.

In addition, places that have invested in thoughtful regulations and policies to promote cyber security, while at the same time promoting innovation, will be attractive to corporations. In 2021, after major incidents involving the federal government, Microsoft, and an important gasoline pipeline, the US announced a bold cyber security executive order to develop a “new course to improve the nation’s cyber security and protect federal government networks”.

Last, deep resources to assist companies in both preventing and recovering from cyber interruptions are important in location decisions. Austin, Texas has invested in cyber security education, research, and innovation, and hosts several cyber security events and conferences every year. Toronto has a robust cybersecurity sector, with more than 200 companies and organizations, and a talent pool of more than 20,000 cybersecurity professionals.

While much of the heavy lifting for cyber security protection is internal to corporations, places can have a significant impact on the threats faced in any given location. Governments can provide resources, policies, and infrastructure to make them more attractive to companies in the digital world in which we do business.

Written by Didi Caldwell. This article first appeared in the October/November 2023 print edition of fDi Intelligence

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