Global cybercrime costs up to $500b a year

Enterprise Innovation editors
30 Jul 2013
00:00
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The US economy loses $100 billion aside from as many as 508,000 jobs yearly due to malicious cyber activity, according to a new report from the Center for Strategic and International Studies (CSIS).

The McAfee-sponsored study shows that global losses due to cybercrime may be as much as $500 billion yearly.

CSIS enlisted economists, intellectual property experts and security researchers to develop the report that used real-world analogies like figures for car crashes, piracy, pilferage, and crime and drugs to build out an economic model.

CSIS noted the difficulty of relying on methods such as surveys because companies that reveal their cyber losses often cannot estimate what has been taken, intellectual property losses are difficult to quantify and the self-selection process of surveys can distort the results.

The cost of malicious cyber activity involves more than the loss of financial assets or intellectual property. There are opportunity costs, damage to brand and reputation, consumer losses from fraud, the opportunity costs of service disruptions, “cleaning up” after cyber incidents and the cost of increased spending on cybersecurity.

“This report also connects malicious cyber activity with job loss,” said James Lewis, director and senior fellow on technology and public policy program at CSIS, and a co-author of the report.

“Using figures from the Commerce Department on the ratio of exports to U.S. jobs, we arrived at a high-end estimate of 508,000 US jobs potentially lost from cyber espionage," said Lewis.

He added that the effect of the net loss of jobs could be small, but if a good portion of these jobs were high-end manufacturing jobs that moved overseas because of intellectual property losses, the effect could be wide ranging.

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