Economic Impact of Cybercrime and Cyber Espionage

Cybersecurity

The Center for Strategic and International Studies and McAfee, Inc. have published a report on the Economic Impact of Cybercrime and Cyber Espionage.

From the report: “Is cybercrime, cyber espionage, and other malicious cyber activities what some call ‘the greatest transfer of wealth in human history,’ or is it what others say is a ’rounding error in a fourteen trillion dollar economy?’ The wide range of existing estimates of the annual loss–from a few billion dollars to hundreds of billions–reflects several difficulties. Companies conceal their losses and some are not aware of what has been taken. Intellectual property is hard to value. Some estimates relied on surveys, which provide very imprecise results unless carefully constructed. One common problem with cybersecurity surveys is that those who answer the questions ‘self-select,’ introducing a possible source of distortion into the results. Given the data collection problems, loss estimates are based on assumptions about scale and effect– change the assumption and you get very different results. These problems leave many estimates open to question.”

“The interim report relied on expert interviews and data provided by other reports and federal agencies to estimate economic damage caused by malicious cyber crime both in the U.S. and globally. It estimates global losses between $300 billion and $1 trillion annually.”

Despite varying estimates, the precise amount, “large as it is likely to be, may not fully reflect the damage to the global economy. Cyber espionage and crime slows the pace of innovation, distorts trade, and brings with it the social costs associated with crime and job loss.” In the United States alone, as many as 508,000 jobs have been lost to cybercrime.

Article formerly posted at https://www.hsdl.org/blog/newpost/view/s_4829