STATEMENT
Of the Honorable Cedric Richmond
Subcommittee on Healthcare and Technology
“Cyber Security: Protecting Your Small Business” 
December 1, 2011

Internet and telecommunication technologies have not only changed how we communicate but also how business is conducted. America’s 23 million small businesses are some of the savviest users of technology by using the internet to access new markets to grow and diversify. In fact, small businesses are the driving forces behind further technological innovation as they produce about 13 times more patents per employee.

However, being connected comes with being exposed to new threats. Cyber threats can take many forms, but they are all devastating to both business owners and their customers. A single attack can wipe out a small business, which is why cyber crime poses severe problems for small businesses that are not prepared to mitigate this kind of a risk.

According to studies, forty percent of all threats are focused on firms with less than 500 employees.  Every year, nearly $86 billion is lost with companies incurring an average of $188,000 in losses. Sadly, some small companies fail to recognize the benefit of investing in cyber security until it is too late. On the other hand, those firms that understand the importance of such an investment often lack the resources to implement an effective security system.

The Federal Communications Commission, the Department of Homeland Security, and the National Institute of Standards and Technology have all embarked on efforts designed to educate the public on computer security. In fact, federal spending on cyber security is expected to rise above $13 billion in 2015, up from about $8 billion this year. It is worrisome that despite the rise in cyber terrorism over the past few years and the growing impact it has on small businesses, a comprehensive cyber security policy remains elusive.

With 1.2 million people employed at small companies in New Orleans, it is important to ensure they are protected against cyber crimes by keeping our nation’s cyber infrastructure incorruptible. That’s why I am co-sponsoring the Homeland Security Cyber and Physical Infrastructure Act as a way to strengthen our infrastructure through research, development, and establishment of innovative cyber security technology.

Like everyday Internet users, small firms are exposed to cyber attacks and are vulnerable to their malicious affects. Today’s hearing will give us an opportunity to review whether the increases in federal investment in both financial and personnel resources will have an impact on a small firms’ ability to mitigate their cyber risk.

The testimony we hear today will help us better understand what role the government can play in educating the American public and the business community about the security risks and challenges they face.

Your recommendations on the best ways to protect the nation’s small businesses from this growing threat will be useful as we move forward in addressing this issue. In advance of the testimony, I want to thank all the witnesses for both their participation and insights into this important topic.  Thank you and I yield back.

 

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