US President Barack Obama is seeking US$14 billion to tackle it. The UK wants to build a start-up industry around it. And Australia is in the middle of what could be a year-long review into getting better at it. The issue is cybersecurity, and at risk is the entire digital economy and consumer confidence in it. In this Cyber insecurity series we investigate the size and nature of the cybercrime threat, the industry growing with it, and the solutions emerging to get in front of it.

National security is shaping up as a key pillar of the Abbott government’s policy focus, and last year’s launch of yet another cybersecurity review is one plank of that.

According to a news report, the review has been delayed. At the same time the government is in danger of ignoring the direct link between measures to defend against cybersecurity threats, and its broader policy obligation to foster our digital economy.

Australia’s Chief Scientist, Professor Ian Chubb, last year observed Australia is the only country in the OECD without a national plan for science, technology or innovation.

The country’s digital competitiveness has been sliding downwards. According to the annual edition of the Network Readiness Index published by the World Economic Forum (WEF), Australia slipped from a ranking of 9th in 2004 to 18th in 2013 and 2014.

Between 1999 and 2011, our annual corpus of new domestic student graduates in information technology (IT) fell by 46%, though there was a small upturn in 2012 and 2013. We’ve has been able to compensate for the sharp decline in IT graduates in part by temporary ICT migrants to Australia, which in 2009-10 numbered 8,530 – double the number of our own IT graduates for that year.

The real situation of Australia’s digital economy and society is much more complex than these statistical snapshots suggest, but they are useful reference points.

Lack of coherent policy

Since the concept of the knowledge economy was devised in 1962 in the United States, none of Australia’s political parties have distinguished themselves by their grasp of the information revolution and what it means for our security. The last inspirational speech on this subject was made 18 years ago, by Paul Keating, one year after he left the Prime Minister’s job.

A cybersecurity strategy without a plan for globally competitive innovation in the digital economy is like building an ever-stronger wall while the building it protects gradually falls into disrepair. More importantly, the wall cannot even be secure if the home-grown talents do not match the rapidly evolving globally available digital technologies for attack.

Keating’s 1997 speech gave a lead on what the country should do. He said we needed both a “thriving IT industry and an information-educated workforce” and for these to then impact “on all our industries from farming to manufacturing to health care”. He said it would need “ideas and a strategic framework within which local and overseas businesses can operate” that would “accommodate and provide for a growing IT presence in our whole economy and society”.

The four prime ministers since Keating, to the extent that they even followed the issue of the digital world, have seen it more often as a threat than an opportunity.

In 2011, the Gillard government released plans for a new white paper focusing largely on cybersecurity (following a 2009 white paper on that subject). One year later, the government said it would expand the scope of that still unpublished white paper from a narrow focus on security to broader questions. Julia Gillard made this commitment in her closing speech to the Prime Minister’s Forum on the Digital Economy in October 2012.

The resulting paper, “Advancing Australia as a Digital Economy”, did not fulfil its promise. Once published, it was billed as an update to the National Digital Economy Strategy of 2011. But neither paper goes much farther than the issues of e-government, online access, the broadband network, or small grants to ICT enterprises. Neither paper had any concept of IT education beyond providing online access. The most challenging issue for an information economy, the creation of significant linkages between industry and R&D innovation in universities, has not been addressed effectively by any Australian government in living memory.

Communications Minister Malcolm Turnbull has several times espoused a vision of Australia’s digital future since his department is nominally responsible for our digital economy. But that portfolio cannot deliver even on the Keating vision. That would need an all-of-government approach led by the prime minister. The absence of such an approach is marked by the fact that the coalition’s policy for the digital economy going into the 2013 election did not even address the main concerns raised by industry at the PM’s Forum a year earlier. These were a lack of software engineers and lack of translation of advanced information technologies into key sectors like agriculture, education and health.

There have been clear advances in Australia’s digital economic performance, captured well in a 2014 report by PricewaterhouseCoopers. Yet nurturing of our IT skills base is hostage to an out-of-date political ethic of full employment, highly conservative notions of “work”, and a lack of political leadership on Australian economic security in the digital world.