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Cybersecurity helps Maryland’s economy

Government initiatives like cybersecurity could put Maryland in position to weather what industry leaders say may be another bleak economic year in 2011.

Economic leaders said at the Greater Baltimore Committee’s annual economic outlook conference Wednesday that the country is poised to experience renewed turbulence, but that Maryland is better off than other states, in part thanks to public initiatives like the opening of the U.S. Cyber Command and the military Base Realignment and Closure process.

While the economy is growing in line with past recoveries, the nation could be headed toward a double-dip recession, said Hugo J. Warns III, senior vice president and director of research at Stifel Nicolaus & Co. He said the risk of the Bush-era tax cuts expiring and the passage of the Currency Reform for Fair Trade Act, which would attempt to crack down on Chinese currency manipulation, would create conditions similar to those that led to the stock market falling 40 percent in 1937.

“Now protectionism and taxes are coming back,” Warns said. “It’s frightening, but totally avoidable.”

Warns added that an increasingly “adversarial relationship between Washington, D.C., and the business community” will add to private sector woes.

Warns and Kevin A. McCreadie, president and CIO of PNC Capital Advisors Inc., agreed that the exploding national deficit is a looming threat, and must be dealt with sooner or later.

“At some point we have to get our fiscal house in order,” McCreadie said. “These are unsustainable conditions. It’s about when, not if.”

But Warns was uncertain whether anything will be done about it.

“I don’t think anybody in Washington has the stomach to deal with it,” he said.

But McCreadie said a number of government initiatives should help Maryland to fare better than other states.

“Things like [Base Realignment and Closure] and [the U.S. Cyber Command] will buffer some of the economic headwinds other states are seeing,” McCreadie said. “We’ll be in a better place in 2011, and certainly by 2012.”

The decision to base the U.S. Cyber Command at Fort George G. Meade in Anne Arundel County could create upwards of 30,000 jobs, projected Lt. Gen. Harry D. Raduege Jr., chairman of the Deloitte Center for Cyber Innovation in Washington.

As a result, universities in the state have begun offering cybersecurity training programs to prepare students interested in the field. The University of Maryland University College offers a bachelor’s degree as well as two master’s degrees in cybersecurity, and the University of Maryland announced this week that it is launching a new “cybersecurity initiative,” an attempt to develop new research programs and to build public-private partnerships to connect the federal and private sector cybersecurity industries.

“[The new educational programs] create great job opportunities, both at the blue collar and managerial white collar levels, and people could even aspire to a higher-level, chief information officer ‘platinum collar’ job,” Raduege said. “The needs are growing exponentially. Attacks are coming, cyber crime is coming, and it’s creating a great opportunity for us.”

Karl Gumtow, founder and CEO of Baltimore-based CyberPoint International LLC, explained that cybersecurity is not solely a national security matter. Cybersecurity also affects private citizens and industry, from identity theft to corporate hacking and espionage.

“Cybersecurity is IT optimization and risk management,” Gumtow said. “It’s very simple, and sometimes it can just be a change in company policy.”

But Warns said he is pessimistic about how big an impact these government initiatives will have on the overall economy.

“What [McCreadie] stressed about policies micro-economically in the public sector is true,” Warns said. “But the private sector will still face the same issues seen across the country.”