The director and chief economist of the US Cyber Consequences Unit, Scott Borg, made an impassioned plea to businesses and government's to take online privacy more seriously during his lecture at CeBit 2014 at Sydney's Olympic Park.

The US Cyber Consequences Unit (CCU) is an independent, non-profit research institute which provides assessments of the strategic and economic consequences of cyber-attacks.

Borg believes that privacy is about to become a much larger issue in the industry than it ever has been before. Too many businesses, he said, saw privacy as a nuisance, or a compliance issue - a view that is "profoundly wrong and dangerous."

"Privacy is the right to do things without scrutiny... it is vital to virtually any fundamental freedom of choice."

He noted that the countries that have the best grasp of personal privacy, namely the west, tend to be technological leaders - no small coincidence.

Borg said he was worried by recent comments by certain multinational CEOs and directors that privacy is a thing of the past. Both Google and Facebook's CEOs have been caught out making similar statements in the past. These are usually made in light of Gen-Y's predilection for posting too much of their personal data online - and thus we should give up on privacy. Borg disagrees vehemently.

He believes that online privacy is vital for any economy to work, and that half baked ideas and innovation are at the heart of producing the next generation of productivity.

Information economy

"In an information economy, your profits depend on information you can utilise that your competitors can't," he said.

The world needs to stop thinking in terms of commodities, he said, and focus on services. He believes that old models are based upon quantity and cost - the Information Age model has moved on.

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Google and Facebook have become experts at compiling elaborate customer profiles, they have access to more information about their customers than ever before. They have created an industry for themselves almost overnight.

They hold the key to the data that the producers need to create what the end user wants - and this increased customisation of the end product is what is driving technologies such as 3D printing.

"This new economy can produce enormously more value than ever before," he said.

Borg says that this new economy can create enormously more value, but it needs to be controlled. This info has the potential to completely wipe out privacy.

"The challenge is to maintain all these economic advantages, while still protecting privacy so we still have these engines of economic innovation," he said.

So how?

Borg said we need to make the distinction between machine access to data and human access to data. Most of us don't mind if it is a machine parsing data and producing ads related to our emails, as long as it is done by a machine. If a human does it, it's a different matter.

Overblown revelations

He said the post-Snowden revelations about NSA spying have been overblown. Much of that has been machine parsing of data, and that the NSA has at most "a couple of hundred people attempting to read all languages, globally". The NSA's spying is mostly done by machines and algorithms - there simply aren't enough staff to 'human spy' on everyone. He compares the NSA surveillance to the same tracking Amazon, Facebook and Google do daily in our lives.

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Borg claims the only thing the NSA revelations have achieved is to ensure that people feel 'inhibited and under threat' when online.

Ironically, Borg believes that if we actually gave more access to the machines, there would be even less of a requirement to use human eyes to spy. He proposes a two section authentication process, a threshold whereby a list of criteria would have to be achieved by any machine access before human eyes were able to look upon anyones data.

"We need to stop the hysteria at look at it analytically, and then decide where the line should be drawn," he said.

He also thinks there needs to be a culture change in the day to day way data privacy is handled by every company or public entity, regardless of size.

Rather than looking strictly at security, we need to look at storing data in different areas. Customer data and other information should never be stored in a single location, it should be broken up into separate components, spread across different types of data and stored in separate locations - both virtually and geographically.

That way if hackers breach a system they never have the entire data set of a customer, and it also means that the staff of a company can't intrude on personal data of those in the system.

Borg said it reaches beyond left and right political beliefs, and is too important to the future economy. Of particular importance is educating the political class.

He claims that, while the majority of the population has regular access to technologies, such as laptops and the internet, the political class are often detached from the realities of the tech world.

"They're people people, when they come home from work, they go fundraising. When they have to type an email, an assistant does it for them. That's why they often don't know what a USB stick or a JPEG file is."

Borg believes that it is part of why ICT thought leaders need to take the initiative and educate politicians, because they won't do it themselves.

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