Economics, Security and Innovation

This paper takes into account an economic perspective of security and innovation. In particular, it discusses aspects of economics that may be relevant in order to assess and deploy security technologies. At the micro level of analysis, as an example, this paper highlights discussions on the economics of security in the cloud. Do we really understand the economics of security in the cloud? Are there economic models that capture operational security in the cloud? Early work at HP Labs on trust economics underpins a systematic approach to information security decision-making and risk management. The results on trust economics highlight how economics may drive operational security and the deployment of security technologies. At the macro level of analysis, drawn from ongoing work within the Security and Trust Coordination and Enhanced Collaboration, this paper links economics to innovation in cyber security and privacy. Despite the R&D investments in cyber security and privacy, the general perception is that security and privacy technologies are deployed ineffectively. This paper also presents an integrated framework taking into account market perspectives that may support identifying suitable R&D strategies and assessing their impact.