International Startups Find New Trouble in America, NSA

Throughout the international market, America has been known as one of the biggest fans of foreign startups, but the NSA's tracking may be stalling business interests.
From: Alex Summers
January 2nd, 2014 | 0 Comments

Israel has become one of the world’s most prominent sources of innovative startups. Unfortunately, one of their biggest investors just shot themselves in the foot.

Throughout the international market, America has been known as one of the biggest fans of foreign startups. The ink is still drying on Samsung’s $30MM dollar acquisition of Israeli Web TV startup Boxee last month. Google’s jaw-dropping $1 billion dollar acquisition of Israeli-based traffic app Waze made Israel an undeniable competitor for startups across the world.

However, once news leaked that America’s National Security Agency (NSA) was reading and recording citizens’ personal and “private” online information (emails, phone records, passwords, etc), nations like Israel face a new challenge…

Can America be trusted anymore?

The NSA and America’s New Identity

Imagine the implications of a government funded and supported organization that “may or may not” have access to just about everything you’ve ever sent, saved, or stored online. Every international business relationship uses cloud and online storage for crucial and private data – what is that data wasn’t private anymore?

The implications for global commerce are astronomical. According to a recent study by the Information Technology and Innovation Foundation, in light of recent revelations about NSA access to customer information, some 56 percent of non-US residents were less likely to use US-based cloud providers.

What company isn’t going to think twice before joining their future to a business that could be being watched and tampered with by its own government?

The bottom line: America has become a business risk.

International Reactions

German Interior Minister Hans-Peter Friedrich recently declared, “Whoever fears their communication is being intercepted in any way should use services that don’t go through American servers.” Officials in other countries in Europe have expressed similar hesitations.

In addition, according to the Information Technology report, around 36 percent of U.S. residents said that the NSA leaks have made it more difficult for them to “do business outside of the United States.”

American businesses and investors buy startups from across the globe, but this new halt in business is bound to hurt international commerce. Projections of how much financial damage these allegations will cause around the world aren’t known yet, but many experts say that it could be in the billions of dollars.

The question on everyone’s mind is simply this: can America recover?

The good news is that, in time, trust in the US can be restored. It starts with companies who want to do business internationally making sure they’ve installed state of the art Internet protection on their systems to protect against malware and viruses. Much of the data being collected is collected through Trojan horses, back doors and cookie information. Internet protection can help a company thwart these intrusions in their tracks.

Next, the NSA and the government officials who decide who gets tracked and who doesn’t need to figure out a better screening system to help protect innocent Americans from becoming business liabilities to themselves.

America’s Next Move

Transparency in American government would really help straighten things out. Unfortunately, the NSA and similar agencies have shown a reluctance (even actively covering their tracks) towards revealing any of their inner workings, much less allowing affected companies to separate FISA requests from normal law enforcement activity.

Several organizations and groups are trying to encourage the NSA to be more transparent, but so far the issue is at an impasse.

America has a new identity, one that won’t be easily overcome. To make matters worse, the NSA and other American agencies don’t seem to quick to cooperate.

If America wants to regain their credibility and ensure safe relationships in the international commerce arena, we need to prove to the world that your secrets are indeed safe with us.