Europe risks being left behind in another key IT market, encryption software, unless its regulatory structures and national laws are harmonised at the EU level, according to Jan Trojborg, Danish minister for research and IT.
Trojborg told delegates at the European expert hearing on digital signatures and encryption in Copenhagen yesterday that Europe is already lagging behind international competitors in security software.
"On the market, I can see some alarming signs. In the US, encryption software is freely available, and the domestic market is thriving. But in Europe, the situation is fragmented, with different laws, export controls and regulatory structures. We cannot afford to be left behind," he said.
Trojborg gave the warning in the opening speech of this meeting of encryption experts and policy makers from the EU, US and Asia. The event was co-organised by the Danish government and the European Commission.
In a speech on trends in the European encryption industry, Paddy Holahan, product development manager at the Dublin based IT firm Baltimore Technologies, said that Europe has a long tradition of high quality encryption technology, but that it tended to be for national or specialised applications, such as military intelligence.
"Every European country has cryptography companies, but we have not been very successful in leaving our national borders. The US and others clearly lead the way in terms of software applications," he said.
However, while the US domestic market is open for strong cryptography, US export controls on products stronger than 56-bits are distorting the market, and must change in the future, Holahan said.
The current US policy on encryption exports was described as "incomprehensible" by Danish delegate Peter Landrock, who said that Europe must take advantage of this opportunity to win global market share in a sector of the IT market not already dominated by the US.
David Aucsmith, security architect with US IT giant Intel, said that, although the US was ahead of Europe in security software, Europe had the lead in one key product, smartcards.
"The use of a personal token, as something that you have or as something with stored value, is something that we will see more and more of. Usage in the US has been limited up to now, but I think we will see them proliferate in the next year or two," Aucsmith said.
Intel will introduce smartcard ignition keys for PCs by the end of the year, as part of a dual authentication process - the smartcard will be reinforced by knowledge of a password - but their manufacture will remain largely outside the US because of the federal government's export controls, he said (see Newswire 23 April).
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