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2017 Cybersecurity Predictions: Japan Confronts SMB Cyber Resiliency, Anticipating Tokyo 2020

December 20, 2016

In Japan there is much hype around the 2020 Summer Olympics and the expectation that the event will create new business opportunities. There is also concern about cyberattacks disrupting the Tokyo 2020 Olympic Games operations and the theft of national security and/or trade secrets. This type of attack would harm the competitiveness of companies in Japan and damage reputations. With this in mind – and because the Internet of Things (IoT) is rapidly expanding and introducing new attack vectors. Here are some sure things and long shots for 2017, based on these dynamics.
SURE THINGS Cyber insurance will become more popular. Cyber insurance services have been available in Japan since at least 2012, but the growth of the market in this country had been slower than in the U.S. While Japanese companies were not motivated to invest in stopping potential risks whose damage scale was unknown before actually suffering from cyberattacks, U.S. organizations across various company sizes are willing to consider such risks and invest in them. Another key difference is that Japanese businesses tend to be more reluctant to reveal cyber incidents (per an article from ScanNetSecurity) to other parties, including their own cyber insurance companies, than American businesses are, probably because of the pressure of the shame culture which we profiled in a recent blog. The tide changed when the Ministry of Economy, Trade and Industry (METI) and Information-Technology Promotion Agency (IPA) published the Cybersecurity Guidelines for Business Leadership Ver 1.0 in December 2015 and the document encouraged companies to use cyber insurance. NISC’s Cybersecurity Approach for Business Management in August 2016 addresses how major companies and SMBs can seek cybersecurity effectively. The document acknowledges that their limited resources make it difficult to adopt sophisticated security products or solutions, and suggests SMBs use cloud-based security solutions and cyber insurance. As major companies have enhanced their security, attackers have ramped up targeting of SMBs (per an article from MYNAVI News) that often are short of the resources needed to detect breaches. This is the case, even though Japan’s economic strength and major companies are reliant on Japanese SMBs, some of which have high technical competence and provide parts for precision machines and metal-processing.