Cybercrime costs global economy $400b per year

NetworksAsia staff
11 Jun 2014
Daily News

Costing approximately $400 billion in losses to businesses worldwide per year, cybercrime can have a significant impact on the global economy.

A new report released by the Center Center for Strategic and International Studies (CSIS) estimates that the internet economy annually generates between $2 trillion and $3 trillion. However, cybercrime extracts between 15% and 20% of the value created by the internet.

“Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors,” said Jim Lewis, senior fellow and director of the Strategic Technologies Program at CSIS. “For developed countries, cybercrime has serious implications for employment. The effect of cybercrime is to shift employment away from jobs that create the most value. Even small changes in GDP can affect employment.”

In the US alone, the report noted that cybercrime "shifts employment away from jobs that create the most value." Thus, it is estimated to lead to approximately 200,000 job losses, while in the European Union the cost would be about 150,000 jobs.

"Governments need to begin serious, systematic effort to collect and publish data on cybercrime to help countries and companies make better choices about risk and policy," the report noted.

Sponsored by McAfee, the CSIS report sponsored by McAfee, “Net Losses – Estimating the Global Cost of Cybercrime,” puts more than just dollar value to losses due to cybercrime, but strives to understand how it affects the global economy.

It cited that the most important loss from cybercrime is in the theft of Intellectual Property and business confidential information. "IP is a major source of competitive advantage for companies and for countries. The loss of IP means fewer jobs and fewer high-paying jobs in victim countries…IP theft from cybercrime works against innovation and shows the global rate of technological improvement," the report explained.

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