Congress and other activists have been waxing lyrical on the need for the federal government to act against encryption. The argument of many of these politicians has been that terrorists and other criminals use encryption to plan for attacks and crimes. However, it is important to look at the other side of the coin. Here are three important ways in which banning encryption may have an adverse effect on the US economy.

Many companies involved in encryption will relocate

If the federal government steps up its effort against encryption, it will force many companies working in the sub-industry to leave. Currently, many companies provide a broad range of encryption services to clients. If the companies feel that some of the investigative agencies may gain legal powers to interfere with their work, it is likely that the companies will choose to leave the country.

The departure of many companies may hurt the local economy. It will lead to job losses on the one hand. On the other, it will interfere with the current business environment that relies on a good political and legal environment.

Local companies may lose sales

If the federal government acquires powers to force local companies create encryption backdoors, this action may affect the business of the companies. For example, if the government forces device makers to create backdoors that the government can use to hack into devices, the companies may lose clients in the world. A poor operating environment at home may affect the success of large corporations in the country.

Encryption products are spread across the world

Useful encryption products are spread across different countries in the world. If the US government bans the use of these products or develops legislation that helps it to undermine the use of these products, this may not have a big effect. It is possible for players in other countries to fill the gap that the US government would have created. Hence, new companies will emerge in other countries, or local companies will just move to other countries.

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