For subscribers
Cyber-security companies are thriving – even when they fail
This may be the ultimate industry for providing very lucrative but ineffective solutions.
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Companies and governments are spending an escalating fortune on information technology security, but cybercrime is only growing worse.
PHOTO: PEXELS
John Thornhill
It is a sad but undeniable truth that some of the world’s most profitable products are terrible. That lightbulb realisation dawned on me when I worked on the Financial Times’ Lex column and learnt that the most successful pharmaceutical drugs – for manufacturers if not patients – were those that alleviated symptoms but did not cure the complaint. Eliminate the problem and you kill demand. Where is the financial incentive in that?
Lightbulbs, curiously enough, are another example of the same phenomenon. Why develop everlasting lightbulbs (the Centennial Bulb has been in continuous operation in a Californian fire station since 1901) when you can sell ones that blow periodically? Economic theory suggests that these inefficiencies should be competed away. Real life does not always work that way.
