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When the FBI used a mysterious "third-party" to unlock the iPhone of San Bernardino terrorist Syed Farook earlier this year, all eyes turned to Israel. In particular, Tel Aviv.
In recent years the country has been a hotbed of cyber security innovation. Leading firms such as Check Point, CyberArk and Checkmarx have all gone global thanks to the Israel's burgeoning pool of talent. It's so strong that one analysis listed 170 cyber security companies within the country. Israel is one of the few countries that can compete with Silicon Valley when it comes to developing methods to protect digital assets.
However, London, and the UK generally, is waking up to the lucrative market - both at home and abroad. Darktrace, founded by former Autonomy CEO Mike Lynch, was recently valued at $400 million , firmly putting the UK back on the cyber security map.
Darktrace's director, Emily Orton, tells WIRED, its success in attracting 300 staff is down to being able to "nurture talent in this country". And the firm's success has inspired growth elsewhere. CyLon (also known as Cyber London) is Europe's first cyber security accelerator. Founded in London in 2015, it runs 13-week programmes to help companies get up to speed.
"We've seen a trend of founders from other countries coming to London to build their cyber businesses," Grace Cassy, one of CyLondon's founders tells WIRED. She explains the cities financial district and banking industries draw startups seeking investment. "You wouldn't necessarily think an Israeli business would decide to come to London given the strength Israel has in this space, but actually there are things that London can offer that they couldn't get in Israel."
The potential money and access to industry giants (think gas, electricity, and commodities) means London can prove lucrative. Big data analysis firm Panaseer raised $2m (£1.5m) in November 2015; RipJar raised a "significant" amount in May 2016; and Digital Shadows raised £16m across four rounds. US venture capitalists Paladin have a specific £270m fund for UK firms and C5 Capital has set aside £75m for cyber security companies across Europe. Globally, $3.3 billion (£2.5bn) was invested in cyber firms last year, but the lucrative market is shrinking, according to analysts. "The startups go where the venture capital is. There are some clusters in Israel" Kirill Slavin, Kaspersky Lab's UK general manager and director, told WIRED. "But London is far ahead".
Firms working in cyber security are spread across the UK in clusters: 17 clusters span the UK in total and each location comes with its own challenges. But one universal mountain for startups in the UK is growth. "It's very difficult because it's difficult to find the investment or difficult to find the staff once you've got the money to pay them, or it is difficult to finalise customer relationships," says CyLon co-founder Poppy Wood.
"Incumbent businesses need to engage more closely with this rising generational talent and knowledge space," adds Gi Fernando, founder of Freeformers. "Senior execs must get involved and make decisions for recruitment not based just on whether a young person got a Maths degree from Cambridge but on their talent, and what they can teach the company about this subject." Slavin says startups in the UK are "way ahead" of those across the rest of Europe.
The potential lack of staff isn't a crisis limited to cyber security startups, it also affects one the UK's strongest, and most controversial, cyber assets. GCHQ, according to reports from The Register, is struggling to fill recruitment targets set for 2020 – although it says there is "a very healthy recruitment pipeline". It's hoped this recruitment shortfall may, in some cases, be plugged by young, highly skilled, graduates. In March 2014 the UK government gave 13 universities across the UK a national status as cyber security research centres of excellence.
"Hacking is perceived as a reason for vilification but it can also be used for good," says Fernando from Freeformers, who urges for a change in the public perception of cyber security.
Since Edward Snowden revealed the full extent of surveillance powers in the UK and US, GCHQ has been working to repair its battered public image. In September 2016 GCHQ launched its first cyber security startup accelerator, working along Wayra and the Department for Culture, Media and Sport,
"There was an interest [from GCHQ] in working at a startup pace and in a startup way, and of immersing even very senior people within the initial meetings," says Gary Stewart, a director at Wayra.
The startup incubator is part of a growing push from British bureaucrats to make the country a home for security innovation. A National Cyber Centre has been created, along with two innovation centres (one of which is the GCHQ/Wayra partnership), and £1.9bn is being set aside for developing the sector. Within this, as Chancellor George Osborne announced in November 2015, is the acknowledgement that the country should be copying successful models from overseas.
To tackle a future skills shortage, Osborne said 14-17-year-olds would be able to attend post-school classes to learn new skills. This, he said, was "modelled on a hugely successful Israeli programme". Whether the UK can replicate the success of Israel and Silicon Valley remains to be seen.
WIRED Security is a new one-day event from WIRED, curated to explore, explain and predict new trends, threats and defences in cyber security. To find out more and to book tickets, click here.
This article was originally published by WIRED UK
