The North American market is the dominant global force in cyber security for smart commercial buildings, according to our latest report: Cyber Security in Smart Commercial Buildings 2017 to 2021.

The report’s comprehensive regional revenue analysis showed that the US represented almost half (47%) of global revenues for cyber security in smart commercial buildings in 2016 with just over $2 Billion in annual revenues. In a distant second place, Europe represents just 23% and around half the sales of North America at $1 Billion, then followed by Asia Pacific and the Rest of the World – and there are very few signs that this will change.

“The North American region will continue to dominate the overall picture through 2021, but its overall share of global revenues will fall slightly to 44%, as faster growth, particularly in the Asia Pacific region (18.2% CAGR) and Rest of the World region (17.4%) begin to make their mark,” the report predicts.

While a number of notable factors have led to this preeminent position, the key reason, it seems, is that the US remains the number one target for cyber attacks, in general and on smart buildings. US-based IP addresses accounted for 65% of attacks detected in 2015, and it remains the largest source of hostile IP addresses, according to the NTT Group’s Global Threat Intelligence Report.

It is not just the sheer number of cyber attacks in North America that is raising the alarm, but also the rapidly escalating costs. The annual cost of cyber-attacks on US businesses is not only larger in the US than any other country but it is also growing faster than in any other country, according to the Ponemon Institute. The US had amongst the largest impact in terms of cyber crime as a percentage of GDP of all of the countries measured, coming in at 0.64% of GDP in 2014.

The cost reflects the scale of the threat but also the strength of the reaction. The US government in particular has been more proactive in terms of both investment into cyber security initiatives and cyber security policy development than other nations. The question of a government’s role in protecting against cyber threats should not be one of “if” but “how,” according to many cyber security specialists.

“I don’t see the choice as being between government involvement and no government involvement, but between smart government involvement and stupid government involvement. I would rather think about it now,” said cyber expert Bruce Schneier.

The White House has made clear intentions that it plans to be on the front foot in this emerging cyber battlefield. The US government will invest over $19 billion for cyber security as part of the President’s fiscal year 2017 budget. That is up from the $14 billion budgeted in 2016, and represents a more than 35% increase from fiscal year 2016 in overall Federal resources for cyber security.

Beyond funding, the Federal Trade Commission (FTC) has not held back from pursuing cases against the US business community for failing to implement good cyber security practices. An appeals court has already backed its lawsuit against the hotel chain operator Wyndham Worldwide for not protecting consumers' information. More recently, a lawsuit was filed against D-Link and its US subsidiary, for inadequate safeguards on its wireless routers and IP cameras.

The escalating defence against cyber threats in 2017 may be, in large part, a reaction to the DDoS attack last October, widely considered the biggest cyber attack in history. In the attack, poorly secured internet of things (IoT) devices were used to barrage the popular DNS service Dyn with requests, overwhelming the system and bringing down a host of the biggest sites on the internet. The fallout from this attack, and lawsuits such as that against D-Link, underline the new focus on cyber physical systems in the cyber security debate.

This atmosphere of continuous threat has fostered a positive business environment for the US cyber security sector. “The U.S. is home to a vibrant and dynamic start-up ecosystem, of start-up product and service vendors in the cyber security space, with extensive access to venture capital funding,” our report finds. It is not just Silicon Valley start-ups but also its established players that are pioneering new defence mechanisms.

“The U.S. is currently the number one location for cyber business by a comfortable margin. It is home to a large proportion of the world’s leading vendors of cyber security, as well as the many of the largest ICT corporations such as IBM, Google, Microsoft and Cisco, who are all taking an active role in the development of new cyber security solutions,” explains our report.

For a number of reasons, the US has always attracted cyber attack, both on domestic and international fronts. They have been forced to defend their assets by developing better and better systems, and in doing so they have created the world’s leading cyber security market. As threats grow around the world, US firms will be best placed to provide cyber security support globally, further cementing North America’s commanding position.

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