source:nytimes.com

A new partnership among two prominent Israeli venture capital funds, a handful of major private-sector companies and the city’s economic growth development enterprise is hoping to turn New York City into the nation’s leading center for yet one more major industry: cybersecurity.

Cyber NYC, as the project is called, is among the nation’s most ambitious cybersecurity initiatives, which over the next decade could transform New York City into a global leader of cybersecurity innovation and job creation.

The multiyear project would simultaneously create a Global Cyber Center in Chelsea, a cybersecurity innovation hub in the SoHo neighborhood of Manhattan and an academic cybepartnership with area colleges, such as Columbia University, New York University and City University of New York. At the same time, major corporations such as Goldman Sachs, Mastercard and PricewaterhouseCoopers also are participating in advisory roles or to assist with the project’s training and hiring.

“We are at a seminal moment in the trajectory of the cybersecurity industry,” said James Patchett, president and chief executive of the New York City Economic Development Corporation, which is spearheading the Cyber NYC initiative, including assembling and leading public-private partnerships and developing and overseeing six programs to grow New York’s cyberindustry and expand the work force.

 

Cyber NYC will initially be funded by about $70 million in private investments, including from the two Israeli firms: Jerusalem Venture Partners, a venture capital fund; and SOSA, a corporate innovation specialist, among others Another $30 million is coming from the city. Its goal: to create 10,000 local cybersecurity jobs over the next decade as part of Mayor de Blasio’s New York Works Plan.

 

Two new cybersecurity centers in separate locations will work in tandem to anchor this project. In SoHo, a 50,000-square-foot cybersecurity investment hub will support cybersecurity start-ups in New York City. In Chelsea, the 15,000-square-foot Global Cyber Center will bring together investors, corporations and start-ups and serve as a virtual testing ground to run simulations. Both are expected to be completed before the end of 2019.

According to the New York City Economic Development Corporation, cybersecurity already is a $1 billion-plus industry in New York, with more than 100 companies and 6,000 employees as of 2017.

 

The real driver behind a project like Cyber NYC is the nation’s urgent need for improved cybersecurity at all levels of corporate and government operations. Nearly 60 million Americans have been affected by identity theft, according to a 2018 online survey by The Harris Poll, an increase from 15 million in 2017.

Cybersecurity attacks have become so common that experts worry about the onset of “cyberfatigue” as consumers begun to shrug off their impact. A corporate cyberattack takes place every 40 seconds via ransomware across the globe, reported Cybersecurity Ventures, a research specialist in the global cybereconomy. That figure is expected to be every 14 seconds by next year. Cybercrimes, Cybersecurity Ventures also noted, are predicted to cause $6 trillion in damages by 2021, an increase from $3 trillion in 2015.

Despite the clear need for cybersecurity upgrades and improvements, not everyone is convinced that a project like Cyber NYC is the right solution.

“This sounds like a huge marketing pitch,” said Bruce Schneier, a cybersecurity expert who has written 13 books on the topic. “I’ve worked in this field forever, and I’ve never even heard the term cybersecurity hub.” Such skepticism doesn’t really bother Erel Margalit, founder and chairman of Jerusalem Venture Partners, which is overseeing the creation of the cybersecurity investment hub in SoHo.

“Come and see what we already have done in Israel,” Mr. Margalit said, in response to Mr. Schneier’s skepticism. Jerusalem Venture Partners has raised over $1.3 billion to create and finance more than 130 companies — more than one-third of them in cybersecurity, including CyberArk, which is one of Israel’s largest cybersecurity companies (Israel is second to the U.S. in terms of overall investment in cybersecurity firms). “If someone wants to call this a marketing ploy, O.K. The storytelling part is important. When you tell people a story, they listen.”

Mr. Margalit, who as a former member of Israel’s legislative body, the Knesset, led its cybersecurity task force. Mr. Margalit earned his Ph.D. at Columbia and was living in New York City during 9/11. He says that his company will oversee much of the business end of the venture. “Most innovation occurs when the two disciplines meet: investors and cybersecurity experts,” he said.