Recommendation

The Small Business Administration should form a small business cybersecurity co-op.

Details

Small businesses often don’t know what types of cybersecurity products and services they should be buying, or if they do know, they often can’t afford them because the per-user costs are too high. Companies that sell IT security products and services often use variable pricing based on the number of users or require minimum purchase amounts. These high per-user costs make these solutions unattractive or unfeasible for many small businesses. SBA should assist small businesses by establishing a cybersecurity cooperative to create a large pool of willing buyers for various cybersecurity products and services, including cyber risk insurance. Participation in the cybersecurity co-op could be open to any small business and depending on the level of interest, it could be organized around particular regions or sectors. The co-op could identify and evaluate cybersecurity products and services for its members and negotiate better rates for its users than they could get on their own. Establishing a co-op would allow small businesses to get more value for their cybersecurity investments and increase adoption of best-in-class cybersecurity tools, as well lower costs for those selling these products and services by reducing their customer acquisition costs.

Keep reading:

▪ Daniel Castro, “Testimony to the U.S. Senate on Preparing Small Business for Cybersecurity Success,” April 25, 2018, https://itif.org/publications/2018/04/25/preparing-small-business-cybersecurity-success.