A new report from the Center for Strategic and International Studies in the US suggests that cybercrime now globally costs businesses approximately $400 billion every year, damaging the performance of both companies and national economies.
The report, titled Net Losses – Estimating the Global Cost of Cybercrime and commissioned by McAfee, underscores to degree to which cybercrime damages trade, competitiveness, innovation and global economic growth. Studies estimate that the internet economy annually generates between $2 trillion and $3 trillion, a share of the global economy that is expected to grow rapidly. Based on CSIS estimates, cybercrime extracts between 15 per cent and 20 per cent of the value created by the internet.
Cybercrime’s effect on intellectual property (IP) is particularly damaging, and countries where IP creation and IP-intensive industries are important for wealth creation lose more in trade, jobs and income from cybercrime than countries depending more on agriculture or industries of low-level manufacturing, the report found. Accordingly, high-income countries lost more as a percent of GDP than low-income countries – perhaps as much as 0.9 percent on average.
The report found that global losses connected to “personal information” breaches could reach $160 billion. Part of the losses from cybercrime are directly connected to what experts call “recovery costs”, or the digital and electronic clean-up that must occur after an attack has taken place. The CSIS report discovered that while criminals won’t be able to monetise all the information they steal, their victims must spend significant resources in acting as if they could do so. CSIS found that there can be a tenfold increase between the actual losses directly attributed to hackers and the recovery companies must implement in the aftermath of those attacks.
“Over the years, cybercrime has become a growth industry, but that can be changed, with greater collaboration between nations, and improved public private partnerships,” said Scott Montgomery, chief technology officer, public sector at McAfee. “The technology exists to keep financial information and intellectual property safe, and when we do so, we create opportunities for positive economic growth and job creation worldwide.”
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