An estimate of the global cost of cybercrime — losses from cyber-espionage theft of intellectual property, plus all types of personal and financial data stolen and dealing with the fallout — is being tabbed at least $400 billion annually, according to the report published today by the Center for Strategic and International Studies.
In its report “Net Losses: Estimating the Global Cost of Cybercrime,” Washington, D.C.-based think tank CSIS claims the countries hit most are the United States, China and Germany based on their overall national wealth in Gross Domestic Product (GDP). Those three countries together are estimated to have suffered $200 billion in cybercrime losses on an annual basis. CSIS acknowledges there’s going to be debate over how to calculate the cost of cybercrime the way it broadly defines it. But CSIS, whose research draws largely from the work of economists, argues it could not be lower than $375 billion and the maximum could actually be $575 billion.
“Even the smallest of these figures is more than the national income of most countries and governments and companies underestimate how much risk they face from cybercrime and how quickly this risk can grow,” the report says.
By coincidence, the CSIS report on the cost of cybercrime comes in the wake of the U.S. Department of Justice crime charges related to alleged cybercrime operations in China and Eastern Europe that are accused of stealing millions of dollars from U.S. businesses through either theft of trade secrets or outright financial fraud.
McAfee, part of Intel Security, sponsored the CSIS cybercrime report. Raj Samani, chief technology officer for McAfee EMEA, said the reality is many of the cyberattacks against businesses are “outsourced” to what appear to be about two dozen main cyber-gangs around the world. “We have this entire ecosystem out for hire,” he noted.
The CSIS effort to track the costs of cybercrime does depend on how much effort there is in each country to track it, the report acknowledges. “One factor explaining why some nations appear to lose more than others has nothing to do with cybercrime,” the report states. “Differences in the thoroughness of national accounting appear to explain the variation. The alternative explanation — that some countries are miraculously unaffected by cybercrime despite having no better defenses that countries with similar income levels that suffer higher loss — seems improbable.”
This story, "Annual cost of cybercrime hits near $400 billion" was originally published by Network World.