Private sector lagging on security, says report.

• Author: Magnuson, Stew
• Position: SECURITY BEAT: Homeland Defense Briefs

It was assumed after 9/11 that the private sector would spend its own money to beef up security to protect its assets against the threat of terrorist attacks.

That assumption was wrong, according to a Council on Foreign Relations report, "Neglected Defense: Mobilizing the Private Sector to Support Homeland Security.

"With industries such as health care, energy, food supply, transportation and telecommunications in private hands, the need is acute, but leadership and incentives from the U.S. government, particularly the Department of Homeland Security, have not been forthcoming, the report argued. Such industries are likely targets of terrorist attacks, it added.

"The White House and Congress wrongly presume that market mechanisms on their own will provide sufficient incentives to provide the necessary level of security in the absence of decisive federal leadership and involvement," said the report's authors, Stephen Flynn and Daniel Prieto.

The White House issued the "National Strategy for Homeland Security" in 2002, which stated that "sufficient incentives exist in the private marketplace to supply protection."

That reasoning is deeply flawed and showed a lack of understanding about the diverse nature of the industries involved, the authors contended. "Private companies will pursue investments that make sense for their core businesses and offer greater...