Cybercrime costs $445B US a year to global economy, report finds
Cybercrime is a growth industry that damages trade, competitiveness and innovation, McAfee says
Cybercrime costs the global economy about $445 billion US every year, with the damage to business from the theft of intellectual property exceeding the $160 billion US loss to individuals from hacking, according to research published on Monday.
The report from the Center for Strategic and International Studies (CSIS) said cybercrime was a growth industry that damaged trade, competitiveness and innovation.
"We worked with them because we were interested in having a think-tank develop the best estimate of cybercrime worldwide," said Tom Gann, vice-president of governmental affairs at McAfee, the security software firm that commissioned the study into costs.
A conservative estimate would be $375 billion US in losses, while the maximum could be as much as $575 billion US, said the study,
"Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors," Jim Lewis of CSIS said in a statement.
"For developed countries, cybercrime has serious implications for employment."
Major nations targeted
The world's biggest economies bore the brunt of the losses, the research found, with the toll on the United States, China, Japan and Germany reaching $200 billion a year in total.
Losses connected to personal information, such as stolen credit card data, was put at up to $150 billion.
"Oftentimes those that have been hacked don`t even know they`ve been hacked and have a hard time estimating the true cost of that," Gann said in an interview with CBC's The Lang & O'Leary Exchange.
"When it comes to corporations they can be hacked and not fully understand the downstream effects until much later once a competitor has developed a competing product."
Gann said intellectual property theft is a key driver of cybercrime.
"The critical question was whether the organization that did the hacking actually had the technical and business process capabilities necessary to replicate the technologies they had stolen," he said.
About 40 million people in the United States, roughly 15 per cent of the population, has had personal information stolen by hackers, it said, while high-profile breaches affected 54 million people in Turkey, 16 million in Germany and more than 20 million in China.
McAfee, owned by Intel Corp, said improved international collaboration was beginning to show results in reducing cyber crime, for example in the takedown last week of a crime ring that infected hundreds of thousands of computers known by the name of its master software, Gameover Zeus.
"In our practice, we found many Fortune 500 companies to be quite well-protected, we found protection levels less strong and in the small businesses, which have less to invest and have staff who are less well-trained in cybersecurity," Gann said.
He said it is a complex business to protect an organization, involving the right processes, good strategy, the right technology and getting the entire system working together.
With files from CBC News