Brokers with commercial clients that stubbornly refuse to talk about cyber liability should consider sharing this statistic: the cost of cyber crime worldwide has been pegged at more than $484 billion.
Reducing this giant number can have a positive impact on world economies, states a new report from the Center for Strategic and International Studies (CSIS), sponsored by McAfee Inc.
“Cyber crime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors,” says Jim Lewis of CSIS. “The effect of cyber crime is to shift employment away from jobs that create the most value. Even small changes in GDP can affect employment.”
Net Losses – Estimating the Global Cost of Cybercrime concludes that cyber crime costs businesses about $435 billion worldwide.
The report found that global losses connected to “personal information” breaches could reach $174 billion.
Losses from cyber crime include those directly connected to the digital and electronic clean-up that must occur following an attack, the statement notes. In Italy, for example, actual hacking losses totalled $952 million, but the recovery, or clean-up costs, reached $9.26 billion.
“Over the years, cyber crime has become a growth industry, but that can be changed, with greater collaboration between nations, and improved public private partnerships,” says Scott Montgomery, chief technology officer, public sector for McAfee. “The technology exists to keep financial information and intellectual property safe, and when we do so, we create opportunities for positive economic growth and job creation worldwide.” (continued.)
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Studies estimate the Internet economy annually generates between $2 trillion and $3 trillion, a share of the global economy that is expected to grow rapidly, the statement says. Based on CSIS estimates, cyber crime extracts between 15 per cent and 20 per cent of the value created by the Internet.
The most important cost of cyber crime comes from its damage to company performance and to national economies, the report concludes, adding that cyber crime damages trade, competitiveness, innovation and global economic growth.
The statement notes that cyber crime has an impact on approximately 200,000 jobs in the United States and about 150,000 jobs in the European Union.
With regard to intellectual property (IP), the report found cyber crime’s effect is particularly damaging. Countries where IP creation and IP-intensive industries are important for wealth creation lose more in trade, jobs and income from cyber crime than countries depending more on agriculture or industries of low-level manufacturing.
For more, also see
'Brokers need to change corporate disconnect on cyber threats'
And:
'Legal liability for lax data protection coming to Canada?'
