Global cybercrime worth $445bn

WASHINGTON, USA: Cybercrime has grown into a global industry worth around half a trillion dollars, with no sign of slowing, a research report has claimed.

CSIS Fellow, James Lewis says cybercrime is a low-risk growth industry offering great returns. Image: Deep Dive Intel

The report by the Centre for Strategic and International Studies (CSIS) working with security firm McAfee estimated the global economic cost of cyber-attacks at $445bn, accounting for the loss of 350,000 jobs in the United States and Europe.

"Cybercrime is a growth industry. The returns are great, and the risks are low," the report said.

The study gave a range of between $375bn and $575bn in global losses, but the authors said even these figures were conservative in the face of limited data from many parts of the world.

"The costs of cybercrime is going to continue to go up, barring a miracle," said Stewart Baker, a former Homeland Security official and co-author of the study.

James Lewis, a CSIS fellow and co-author, said the estimates are more conservative than some previous research pegging the cost at $1trn. He acknowledged the difficulty in collecting data.

Companies don't admit to being hacked,

"Maybe half of the companies that get hacked don't tell the local police," Lewis said at a forum unveiling the study.

"Many governments don't produce any data at all." The authors said they believe their economic models produce a good estimate of economic losses but admit that it's very difficult to measure.

Many of the losses stem from the theft of secret business information, or other forms of intellectual property.

Lewis said that in some cases, "someone might steal a billion dollars worth of intellectual property but is only able to monetise 10% of that."

Yet the report said that cybercrime was a tax on innovation because it reduces the return for new inventions or software, and may discourage some from investing or putting information online or in the cloud.

The researchers said the costs of cybercrime also include the impact it has on hundreds of millions of people having their personal information stolen. About 40m people in the US lost personal data last year, 54m in Turkey, 20m in South Korea, 16m in Germany, and more than 20m in China, according to the report.

"One estimate puts the total (number of victims) at more than 800m individual records in 2013," the report said.

"This alone could cost as much as $160bn a year. Criminals still have difficulty turning stolen data into financial gain, but the constant stream of news contributes to a growing sense that cybercrime is out of control," the report warned.

Source: AFP via I-Net Bridge