The US Needs an Industrial Policy for Cybersecurity

Vinod K. Aggarwal and Andrew W. Reddie

Defense One, 2019

President Trump’s recent Executive Order restricting the use of Huawei’s telecommunications equipment was hardly the first time the U.S. government has intervened in the private sector for purposes of national security. During World War II, for example, the U.S. government pumped investment into the American steel industry to ensure the military had a sufficient supply to build tanks, ships, and other armaments.

In the ensuing decades, however, other industries made more far-fetched claims for intervention. The American wool industry argued in the 1950s for government protection of domestic production by claiming that up to 200 million woolen blankets could help the population survive an atomic war. Oil industry lobbying in the 1950s led the government to impose oil quotas, which ended up draining American reserves and contributing to the oil spike of 1973. Just last year, Trump’s tariffs on steel made by U.S. allies, levied in the name of national security, drew protests from the American defense industry.

The 2018 tariffs notwithstanding, industrial policy—actions taken by governments to grow sectors of the economy that are deemed to be strategically important, but in which market dynamics have led to an under-provision of a good or service—has largely fallen out of favor. But in recent years, the steady barrage of attacks on the digital infrastructure of U.S.-based companies and government agencies suggests that one key sector has a far more plausible claim to make for government intervention: the cybersecurity industry.

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