Industryweek 4845 Cybercrime

Cybercrime Costs May Reach $500 Billion, Study Estimates

July 22, 2013
The report said the impact of cybercrime includes loss of intellectual property and confidential information; reduced trust for online activities; additional costs for security, insurance and recovery; and damage to reputations.

WASHINGTON – Cybercrime costs the global economy between $100 billion and $500 billion annually, according to a study released Monday that acknowledged more data are needed for precise estimates.

The study by the security firm McAfee and the Center for Strategic and International Studies said the U.S. economy loses some $100 billion to cybercrime and cyber espionage, including loss of key business data and intellectual property.

The estimate is lower than some earlier reports that put the costs as high as $1 trillion, but study authors said it was a matter of narrowing the range of damage from cyber attacks.

"It will always be a range," said James Lewis, a CSIS scholar on cybersecurity and co-author of the report.

"The data is either sparse or distorted."

But Lewis said the report offers a better way to compare the cost of cyber crime to other types of risks such as drug trafficking or other types of theft.

"We believe the CSIS report is the first to use actual economic modeling to build out the figures for the losses attributable to malicious cyber activity," said Mike Fey, chief technology officer at McAfee.

"Other estimates have been bandied about for years, but no one has put any rigor behind the effort."

The report said the impact of cybercrime includes loss of intellectual property and confidential information; reduced trust for online activities; additional costs for security, insurance and recovery; and damage to reputations.

Lewis said the impact on business could translate into the loss of as many as 508,000 jobs in the United States, based on a government formula for the ratio of exports to U.S. jobs

"The raw numbers might tell just part of the story," he said.

"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."

Copyright Agence France-Presse, 2013

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Organizations Connect and Engage with Frontline Workers

June 14, 2023
Nearly 80% of the 2.7 billion workers across manufacturing, construction, healthcare, transportation, agriculture, hospitality, and education are frontline. Learn best practices...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!