Security woes threaten innovation in the computer industry, but they also offer an opportunity to innovate that the industry should seize, according to Microsoft CEO Steve Ballmer.

"Today we're faced with another new and growing challenge to innovation. That is the need for the highest levels of security in a world that, frankly, is full of thieves, con artists, terrorists and hackers," Ballmer told an audience of Silicon Valley business people at a luncheon organized by the Churchill Club in Santa Clara, California.

Microsoft and the industry should not surrender but fight. "Our company and our industry have to hit on all cylinders to meet this new challenge," he said.

Ballmer compared the threat of hackers and virus writers to that of bank robbers. "In the Old West, the banks did not shut down because of the bank robbers. They improved the banks, they improved law enforcement and went after them," he said.

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