World Economy

Cybercrime Drains Nearly 1% of Global Growth Annually

Cybercrime cost has jumped by $155 billion since 2014.Cybercrime cost has jumped by $155 billion since 2014.

Global businesses are losing the equivalent of nearly 1% of global gross domestic product a year to cybercrime, and it’s impacting job creation, innovation and economic growth.

So says a report from cybersecurity firm McAfee and the Center for Strategic and International Studies, which estimates that cybercrime costs the global economy $600 billion a year—up from a 2014 study which put the figure at $445 billion, ZDNet reported.

The cost of cybercrime amounts to 0.8% of global GDP, with the $155 billion jump since 2014 attributed to the speed with which new technology is adopted by cyber criminals and an increase in the number of internet users in parts of the world with weak cybersecurity.

In addition, cybercrime-as-a-service is allowing low-level hackers to easily make money from targets, while sophisticated cyber-espionage and hacking operations are able to divert significant amounts intellectual property and funds from lucrative targets without being spotted.

Although the vast amount of money being lost to cyber criminals, represents a problem itself, it also has a knock-on effect on businesses and the economy as a whole.

“Really, the fundamental question here is about the economic impact of cybercrime,” Raj Samani, chief scientist and fellow at McAfee, told ZDNet. “We need to focus the efforts on how these things have a detrimental impact on economic growth, an economic impact on new jobs being created, an economic impact on revenue,” Samani added.

  Some Net Losses

Last year’s NotPetya attack provided clear examples of how falling victim to cyber criminals can cost businesses dearly, with Reckitt Benckiser, FedEx and Maersk among those facing losses of hundreds of millions due to the impact of system downtime.

For example, Maersk had to reinstall 4,000 servers, 45,000 PCs, and 2,500 applications, with the need to do so impacting on the shipping firm’s ability to do business. Moller-Maersk Chairman Jim Hagemann Snabe described the incident as a “very significant wake-up call for Maersk, and you could say, a very expensive one.”

Meanwhile, in the UK, telecommunications provider TalkTalk suffered a high profile data breach after falling victim to hackers in 2015. The company says it lost £60 million ($83.6 million) and over 100,000 customers as a direct result of the incident, with the drop in customers reducing TalkTalk’s revenue in the long term. The cost of falling victim to cybercrime is likely to have been detrimental elsewhere.

“Maybe that money was earmarked for hiring more people, maybe it was earmarked for investment. But those are jobs in the United Kingdom that weren’t filled because of cybercrime,” said Samani.

To combat the cost of cybercrime, the McAfee/CSIS report makes some simple recommendations, such as regularly patching systems and software in order to prevent cyber criminals exploiting known vulnerabilities to conduct attacks.

The report also recommends increased international cooperation in the fight against cybercrime, along with “a requirement for additional resources for investigation and to expand agency resources, and for cybercrime capacity building in developing nations”.

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