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The third wave of the Internet is upon us, or so suggested AOL co-founder Steve Case ^[2] at this year’s SXSW Interactive ^[3] in Austin this week. According to Case, companies will need to foster partnerships with embedded stakeholders such as teachers, doctors, and large corporations in order to thrive. Case continued that tech businesses would need to improve and increase their interaction with government as its role as both regulator and customer is ‘heating up.’

A glance at US Department of Defense budget figures ^[4] leaves no doubt that the government focus on cyber is already intense. Spending at US Cyber Command is set to skyrocket by 92%, with costs totalling out at just over $1 billion over the next five years, with department-wide cyber spending estimated to hit $5.5 billion for fiscal year 2016. If numbers aren’t enough to convince readers of the high priority the Pentagon’s placing on cyber, US Secretary of Defense Ashton Carter ^[5]’s decision to make Fort Meade his first troop visit underlined the case.

Beyond cyber operations, one area where government has a significant impact is in research and development. Nowhere is that clearer than at the US Defense Advanced Research Projects Agency (DARPA). DARPA has announced that it will work to tackle one of the most pressing concerns for consumers in the digital economy, privacy ^[6]. The Brandeis Program, named after the former US Supreme Court Associate Justice Louis Brandeis ^[7], aims to build ‘information systems that can ensure private data can only be used for its intended purpose and no other’.

Of course, not everyone trusts the US government’s intentions in online privacy. A beneficiary of immense support from the US State Department and various other departments, the developers behind Tor ^[8], an anonymity service, are looking to diversify their funding base, primarily tapping non-government support in response to growing public concern over official intrusiveness. Of course non-government entities are not necessarily neutral themselves. The private sector is far from immune to politicking, especially when it comes to cybersecurity ^[9]. A look into leading cybersecurity firms Kaspersky Lab, CrowdStrike, FireEye, and others shows that politics can play a large role in decision making.

In Australia, the cyber debate has also been heating up of late, with commentators calling on the government to lift its game. Alan Dupont ^[10] has called on Defence to recognize the ‘crucial role’ that space and cyber space play in military operations and to use the 2015 Defence White Paper to carry out a ‘much-needed reset’. In Sydney ^[11], a group of defence experts expressed concern over the lag between private sector and government efforts on cyber security. And Nigel Phair ^[12] has tapped into the global concern over the skills-demand gap for cyber expertise, calling on Canberra to go beyond a cybersecurity review and proactively nurture cyber talent).

With the high demand for talent a clear challenge for both government and business hiring, newly-appointed head of ANU’s National Security College, Rory Medcalf ^[13], has suggested a revamped Australian Defence Force reserves as an opportunity to close the skills gap. That idea—similar to schemes that have been gaining traction in the UK ^[14] and the US ^[15]—would allow the military to tap into private-sector expertise in times of need.

Looking to our neighbourhood, Ben Heyes ^[16], CISO at Commonwealth Bank, has highlighted Australia’s opportunity to become a regional hub for cyber security capability—a move which would be both a boon for our economy and an avenue for enhancing regional cyber maturity. Reports suggest ^[17] that Australia has been heavily involved in certain aspects of regional capacity building. Recent revelations suggest that the Defence Signals Directorate (now the Australian Signals Directorate) sent an officer to New Zealand to help boost their cyber capabilities and lead a new operational unit within the Government Communications Security Bureau (GCSB). Of course there’s plenty of scope for broader, less controversial, capacity building efforts across the region.

Finally, make sure to join us and the Embassy of the Kingdom of the Netherlands next Wednesday 25 March ^[18], for a discussion on the Global Conference on Cyber Space (GCCS) 2015. The discussion will explore the aims of the GCCS, wider Asia-Pacific perspectives on the key themes of the conference, and Team Australia’s contribution to the GCCS.

Klée Aiken ^[19] is an analyst in ASPI’s International Cyber Policy Centre ^[20]. Image courtesy of Flickr user Case Foundation ^[21].