Cyber security threats a clear danger: ex-Intel exec

A top ­hi-tech executive from Israel has warned governments and firms against piecemeal solutions to cyber security.

One of Israel’s most senior ­hi-tech executives and the man who spent three decades at the top of global tech giant Intel has urged governments and corporations to take a “systematic’’ approach to cyber security, warning that piecemeal solutions will not work.

David Perlmutter, who led key divisions at Intel for 34 years and was responsible for the computer chips that replaced Intel’s long-time Pentium brand of PC processors, said cyber security threats presented a “clear and present danger’’ for governments and business.

“A lot of our digital infrastructure was not built with cyber security in mind. There are a lot of good start-ups in the cyber space arena, (but) the winners in this space will be people that use a more systematic approach,’’ he told The Australian during his first visit to Australia last week.

“The solutions have to be built into new systems — you don’t build a bank without a good safe. You are talking about building an industry here. It takes a lot of expertise and knowledge.’’

His comments come in the wake of Malcolm Turnbull’s announcement last week of $230 million in fresh funding to make Australia a world leader in cyber security.

The government pledged to establish Joint Cyber Threat Centres to help organisations share sensitive information and work with industry to co-design a model for Academic Centres of Cyber Security Excellence in universities.

It will also offer free cyber security health checks for ASX 100 companies and 5000 small businesses.

Mr Perlmutter is now general managing partner of Eucalyptus Growth Capital, which is raising a $US300m ($387m) fund to make late-stage investment in Israeli hi-tech companies.

The fund is focused on companies poised to scale up from $US10m-$US30m to $US100m-plus in revenues and seeking to become major players in the global digital revolution.

Last week he pitched the fund to Australian superannuation funds and wealthy investors.

“The funds and people here have a good understanding of the Israeli hi-tech phenomenon,’’ Mr Perlmutter said.

“The Australian funds are keen to meet and understand which is very positive.’’

He said while pension funds were traditionally wary of investing in early stage technology businesses, Eucalyptus would work with companies that had already proven their products and technologies.

“These are companies with significantly less risk on the technology side. It is by far closer to what these people (super funds) are more comfortable with, which is investing in a real company, not an idea,’’ he said.

So far Eucalyptus has raised around $US100m but Mr Perlmutter said he was still keen to secure a lead investor.

Veteran venture capitalist Bill Ferris, chairman of Innovation Australia, has said super funds need to invest more into the VC sector to drive commercialisation.

HESTA was one of four of the nation’s largest industry superannuation funds that last year backed Brandon Capital Partner s’ third Medical Research Commercialisation Fund, a VC fund aimed at keeping Australian medical science breakthroughs from heading offshore.

Brandon raised $200m from AustralianSuper, HESTA, StatewideSuper and Hostplus.

Mr Perlmutter cautioned that creating a new technology ecosystem in Australia would take patience.

“These things don’t happen in a day,” he said. “The most fundamental thing is education. In Israel the amount of engineers and scientists per capita is one of the highest in the world. You need STEM (science, technology, engineering and mathematics) education in schools. If you don’t have this large and deep, whatever government does, it doesn’t happen. You also need the ecosystem of investment. To bring in a lot of multinational players to play in Australia to inspire people to invest and become entrepreneurs.’’