Statement of H&T Subcommittee Ranking Member Janice Hahn before Subcommittee hearing entitled "Protecting Small Businesses Against Emerging and Complex Cyber-Attacks"

STATEMENT

of

Congresswoman Janice Hahn, Ranking Member

Subcommittee on Healthcare and Technology

House Committee on Small Business

“Protecting Small Businesses Against Emerging and Complex Cyber-Attacks”

March 21, 2013

Thank you Chairman Collins.

I’m proud to be serving as ranking member of this subcommittee—I think there’s a lot of work we can do together to empower our small businesses to put technology to work for them, and to help them access all the resources that are available to them to strengthen their business, hire, and grow. And of course, while the internet and new information technology offers tremendous possibility for our small businesses, it exposes them to cyber threats that can be particularly difficult for them to counter.

Developing new innovations is fundamental to our prosperity in the 21st century.   But even more essential is enabling the nation’s small firms to adopt these new technologies and become even more successful and efficient. Over the next decade, we can expect the growth of this field to produce good-paying jobs for millions of Americans.  The number of jobs dependent on technology is expected to grow – creating opportunities for large and small companies in every sector of the U.S. economy.

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 than other businesses.

For the established small business, modern technology can expand a firm’s client base using a company website, social networking, or other forms of online advertising.  Firms can utilize voice and video communication as a low-cost method to connect with customers around the world -- and reach previously untapped markets.   They can store data online, access office productivity tools, and even improve the energy efficiency of their business.

Yet, for all the benefits technology brings to the equation, it also creates more challenges for small business owners, consumers, developers, and vendors.  One such challenge is cybersecurity because being connected also means being exposed to new threats. Cyber threats can come in 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 and revealed that a total of nearly $86 billion annually is lost with companies incurring an average of $188,000 in losses. Sadly, some small companies fail to recognize the benefit of cybersecurity as an investment 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 testimony we hear today will not only highlight the variety of opportunities created by new technology but it will also help us better protect the nation’s small businesses from growing cyber threat.This Congress, the strengths and weaknesses of comprehensive cybersecurity—including issues of privacy and notification—will once again receive significant consideration.  Small businesses have much at stake in how the debate plays out.  It is my hope that today’s discussion will shed light on what these policies mean for online entrepreneurism.

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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