Policymakers are urged to strengthen information security.
The US government’s data surveillance practices may hit technology firms harder than expected.
In 2013, the Information Technology and Innovation Foundation (ITIF) estimated that the revelations of government surveillance by former NSA contractor Edward Snowden could cost the US tech sector between $21.5bn and $35bn by 2016.
In its latest report, the ITIF said the figure will likely far exceed the original estimation due to the government’s failure to reform its surveillance practices.
The think tank proposed a series of reforms designed to enhance security, protect transparency, and increase cooperation and accountability in the worldwide technology ecosystem.
It recommended policymakers to strengthen information security by opposing government efforts to introduce backdoors in software or weaken encryption.
They are urged to strengthen US mutual legal assistance treaties and set up international legal standards for government access to information.
ITIF vice president and co-author of the report Daniel Castro said: "Foreign customers are increasingly shunning U.S. companies, and governments around the world are using U.S. surveillance as an excuse to enact a new wave of protectionist policies. This is bad for U.S. companies, U.S. workers, and the U.S. economy as a whole.
"Now that Congress has passed the USA Freedom Act, it is imperative that it turn its attention to reforming the digital surveillance activities that continue to impact our nation’s competitiveness."