Fighting terror — there could be an app for that

In the wake of a string of terror attacks, European policymakers are grasping for ways to neutralize terrorist networks and prevent future attacks. As they do so, they are overlooking an important untapped resource: the Continent’s tech startup scene.

If Europe is serious about tackling terrorism, it should follow Washington’s example and mine the industry where today’s innovative minds congregate. The CIA is, for example, part-owner of Recorded Future, a Swedish tech firm that scans internet content to predict events, including terror attacks.

That’s just one company the spy agency has invested in via In-Q-Tel, a venture capital firm investing on behalf of U.S. intelligence agencies.

When it comes to investments, In-Q-Tel acts exactly like conventional venture capitalists (Google Ventures is among the Swedish firm’s other investors). But the firm’s focus is not on the bottom line. Its goal is to improve U.S. national security, which it does through a series of small investments targeting specific capabilities, according to the needs of the U.S. government’s agencies.

Since its founding in 1999, In-Q-Tel has invested in more than 360 companies. It averages one startup investment per week. Recently, it has helped fund Algorithmia, an online market place for computer algorithms; Anamoli, a firm that detects online threats; and Orbital Insight, a company specializing in analysis of large sets of satellite imagery.

The truth is that innovation doesn’t happen in-house anymore — and that’s something the Americans have understood and acted on.

Investing in the private sector is something the CIA has done for decades. During the Cold War, the agency regularly created so-called front companies. Pacific Corporation, a CIA-backed holding company, owned a number of airlines including Air America. After 9/11, the CIA reportedly set up a network of companies in Europe to gather intelligence on terrorists. But the CIA’s post-9/11 corporate experiment was a near-total failure: Most of the companies proved ineffective, and the agency swiftly shut most of them down.

The truth is that innovation doesn’t happen in-house anymore — and that’s something the Americans have understood and acted on, according to Christian Nagel, a Berlin-based veteran investor and co-founder of the €880 million venture capital firm Earlybird.

Europe has been slower to catch on. Government agencies do provide grants to incubators and startups. In Estonia, for instance, the government-run venture capital fund SmartCap has co-invested in a variety of local startups. But no European intelligence agency operates its own venture capital firm.

That’s something that should be changed. Along with human intelligence and signals intelligence, cutting-edge technology is the best defense against attacks.

Considering the extraordinarily clever ways in which today’s adversaries — including state actors, their proxies, terrorist groups and lone wolf terrorists — try to harm liberal democracies, Europe’s spy agencies would be wise to harness the minds at work in tech startups.

Governments could of course simply buy services from startups, but by investing they can also shape their direction. It’s a better use of taxpayer money, Estonia’s Chief Information Officer — and a former SmartCap executive — Siim Sikkut told me.

Headquarters of the Central Intelligence Agency. The CIA has invested in the private sector for decades | Jim Lo Scalzo/EPA

And while tech entrepreneurs might have been reluctant to accept the intelligence community’s investments a decade ago, indiscriminate terrorist attacks on civilians have made spy agencies palatable partners again.

One roadblock to the government using the startup sector for national security could be the lack of competition. European regulations stipulate that a government agency can’t give preferential treatment to a particular company. But, just like the CIA, European government agencies can operate through independent outfits.

Indeed, it’s in the interest both of government and the startup scene that they do so. If Europe’s spy agencies were to adopt an In-Q-Tel approach, they could capitalize on the tech sector’s innovative edge, boost their own work and shape the focus of research in the EU in ways that improve the security of its citizens.

Elisabeth Braw is a nonresident senior fellow at the Atlantic Council in Washington, D.C.