Simon Singh: E-mail and Espionage
Corrections or additions?
These articles by Melinda Sherwood and Barbara Fox were published
in U.S. 1 on September 22, 1999. All rights reserved.
One Currency, Many Opportunities
Some feared the introduction of the Euro on January
1 would pose a serious challenge to the almighty dollar and create
an upset on the scale of Y2K. But other American companies are finding
new opportunities made possible by the unified currency, which until
2002 is only visible on bank statements and in check form. “It
might have been to get your parts from Italy, but tomorrow it may
be a good deal to get parts from Spain,” says Bob Orr, a
partner in the information industries practice at PA Consulting Group,
the management systems and technology consultancy based at 315
Enterprise
Drive. “The key is how to take advantage of price transparency
and new markets.”
Learn about opportunities for American companies from Euro experts,
Orr included, at the Princeton Chamber’s panel on Thursday, September
30, at 8 a.m. at the Sarnoff Corporation at 201 Washington Road.
James
Clingham of Galaxis USA LTD; David Round of First Union Bank,
a market and sales consultant for Europe, the Middle East, Africa
and the Indian Subcontinent; Stephen Stambaugh, senior vice
president and director of First Union’s International Corporate Group;
Ann Carthy, also with PA Consulting Group; and Steven
Richman,
partner, Gallagher Briody & Butler, each give their perspectives.
Cost: $40. Call 609-520-1776.
Orr, who specializes in matters of finance in multinational companies,
reports that the Euro has had an almost Y2K-like impact on clients’
information systems, accounting, and reporting. One client, he says,
had more than 1,000 different information systems and interfaces that
needed to be modified for currency denomination units. “Just about
every fundamental business process,” says Orr, “from managing
customer revenue, to supply chain, to sales and marketing, had to
be fairly fundamentally reengineered.”
Orr graduated from Rice University, with a BA in economics and
management
science, Class of 1971, and lives with his wife and four children
in South Orange. Prior to joining PA Consulting Group, a 2,700 person
organization with over 50 offices in 20 countries, Orr worked for
Andersen Consulting, KPMG, and Morgan Stanley.
The good news about the Euro, says Orr, is that cheaper goods and
new markets will be visible to the naked eye when businesses don’t
have to translate currency values. “The Euro has changed the
landscape
in terms of where you manufacture things, where you add value in its
development, and where you might locate offices,” he says.
“Many
companies were very good at taking advantage of differences in pricing
across borders, so a product in Spain might be relatively cheaper
than a product in France, and someone in procurement could cut costs
out of the project.” That could mean more American companies in
the mix. “You’re going to see a lot of increased competition
because
there’s always been a barrier to entrance,” says Orr.
Some of the opportunities for new and existing business to jump on
between now and January 1, 2002, when the Euro will be issued in paper
notes and coins:
Lower costs of capital.New market opportunities. If you can take advantage ofprice transparency, says Orr, to significantly reduce the cost ofyour product, there may be markets there that weren’t available beforebecause of your price structure. New markets may also open up aroundyour new production location.Longer-term purchase contracts. Many of the currentpurchasingagreements are tied to currency rates, so companies may be sourcingfrom many different companies. The stability of the Euro will givea company more confidence to streamline purchasing arrangements andset up longer contracts.New sources of materials. The standard currency will makeit easier to look for new sources of raw materials across borders.Could American consumers and businesses end up paying more,rather than less, for imported goods? Right now the jury is stillout, says Orr. “Companies are really starting to pay attentionto this right now,” he says. “We won’t have the real warstoriesfor a while. But things don’t have to be complete until 2002. I don’tknow if there’s a bible on it yet.”– Melinda SherwoodTop Of PageSimon Singh: E-mail and EspionageLast week the White House decreed that United Statesfirms could export its most powerful encryption techniques, and inso doing it nosed ahead of Congress in the race to curry favor withtechnology companies. This controversy over how strong encryptionshould be — and whether United States-based companies could sellstrong encryption codes overseas — has created some strangebedfellows,explains Simon Singh, in his new volume “The Code Book:The Evolution of Secrecy from Mary, Queen of Scots, to QuantumCryptography,”new from Doubleday ($34.95)In this volume Singh illuminates the timely subject of encryption,revealing its contributions to linguistics and computation as wellas its dramatic effects on the outcome of wars, monarchies, andindividuallives. His earlier book, “Fermat’s Last Theorem,” wasuniversallypraised for its lively presentation of what could be a dull (for most)mathematical subject, and he attracted a standing room only crowdat a reading in Princeton then. Singh speaks and signs his book atthe Princeton University Store at 36 University Place on Thursday,September 23, at 6:30 p.m. Call 609-921-8500.Singh is the particle physicist from the University of Cambridge whoco-produced and directed the BBC documentary on Fermat’s theorem.In the story about Fermat’s Theorem he offered mathematical historyfrom Pythagoras through Turing, but always focused on the drama,bringingit to a climax when Princeton University mathematics professorAndrewWiles announced in 1993 that he had a long-awaited proof for thetheorem.Turning his attention to cryptographic freedom, he writes that itwould allow everyone, even criminals, to be assured that theirE-mails are secure. “On the other hand, restricting the use ofcryptography would allow the police to spy on criminals, but it wouldalso allow the police and everybody else to spy on the averagecitizen.”Those against the exportation of encryption devices include theNationalSecurity Agency, which operates a worldwide network of listeningstations,including Echelon, which indiscriminately harvests information byusing receivers that detect the telecommunications that bounce offsatellites.Those in favor of encryption are the Center for Democracy andTechnology,the Electronic Frontier Foundation, civil libertarians, andcorporationsthat want to enhance E-commerce and store information on databases.”Probably the greatest infringement of everybody’s privacy isthe international Echelon program,” writes Singh. “Whereaslaw enforcers argue that encryption should be banned because it wouldmake Echelon ineffective, the civil libertarians argues thatencryptionis necessary exactly because it would make Echelon ineffective.”Singh suggests a middle way between cryptographic freedom andrestrictions:key escrow, comparable to having two keys to open a safe deposit box.For instance, the government could store two halves of a computerchip in separate facilities for use only in emergencies. Another wayis for a certification authority, such as a company called Verisign,to verify that a public key does correspond to a particular person.Certification authorities can also guarantee the validity of digitalsignatures, as when President Bill Clinton and Prime Minister BertieAhern digitally signed a communique in Dublin.A more controversial service, known as key recovery, can be providedby a Trusted Third Party (TTP). “Imagine a legal firm thatprotectsall its vital documents by encrypting them with its own public key,so that only it can decrypt them with its own private key. Such asystem is an effective measure against hackers and anybody else whomight attempt to steal information. However, what happens if theemployeewho stores the private key forgets it, absconds with it, or is knockedover by a bus? Governments are encouraging the formation of TTPs tokeep copies of all keys. A company that loses its private key wouldthen be able to recover it by approaching its TTP.”Some argue that TTPs are effectively a reincarnation of keyescrow,and that law enforcers would be tempted to bully TTPs into givingup a client’s keys during a police investigation. Others maintainthat TTPs are a necessary part of a sensible public keyinfrastructure,”writes Singh.He predicts that “in the near future the pro-encryption lobbywill initially win the argument, mainly because no country will wantto have encryption laws that prohibit E-commerce. However, if thispolicy does turn out to be a mistake, then it will always be possibleto reverse the laws. The deciding factor will be whom the public fearsthe most — criminals or the government.”Broken codes have won wars and lost lives, and Singh is fully up tothe task of investing each of these tales with all the drama due.Mary Queen of Scots, says Singh, wrote to her conspirator freelybecauseshe believed the code could not be broken. She was wrong.He tells of 420 Navajo “code talkers” who passed messagesthat the Japanese never were able to decode. They passed 800 messages,all without error, during the first days of attack on Iwo Jima, andmilitary experts say that the Marines would never have taken Iwo Jimawithout the Navajos’ help.Singh’s ultimate drama will be his announcement about who broke the15-page code puzzle included in “The Code Book,” The winnerwill receive $15,000, and if the prize has not been claimed in oneyear, it will be awarded to the person who has made the most progresssoonest. Progress will be tracked athttps://www.4thestate.co.uk/cipherchallenge.Perhaps Singh will drop a few tips at his book signing.– Barbara FoxNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
