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Cybercrime is Growth Industry Estimated to be as Much as $575 Billion

07.29.14

A recent report estimates that the ”cost of cybercrime includes the effect of hundreds of millions of people having their personal information stolen—incidents in the last year include more than 40 million people in the US, 54 million in Turkey, 20 million in Korea, 16 million in Germany, and more than 20 million in China.” The Center for Strategic and International Studies and McAfee issued their June 2014 report entitled “Net Losses: Estimating the Global Cost of Cybercrime” with these comments about the impact on the world:

  • The cost of cybercrime will continue to increase as more business functions move online and as more companies and consumers around the world connect to the Internet.
  • Losses from the theft of intellectual property will also increase as acquiring countries improve their ability to make use of it to manufacture competing goods.
  • Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors.
  • Governments need to begin serious, systematic effort to collect and publish data on cybercrime to help countries and companies make better choices about risk and policy.

The report also has a chapter on acceptable losses which may come as a shock to many, but should not given these observations:

One way to think about the costs of cybercrime is that societies bear the cost of crime and loss as part of doing business and a tradeoff for convenience and efficiency. Companies and individuals have decided that the net gain of using automobiles and giant merchant ships outweigh the potential cost. The problem with these analogies is that many companies do not know the extent of their losses from cybercrime, leading them to make the wrong decisions about what is an acceptable loss.

Here is a list of the chapters in the report:

Estimating global loss from incomplete data

Regional variations

Incentives explain cybercrime’s growth

Acceptable loss from cybercrime

IP theft and innovation cannibalism

Penalty-free financial crime

Confidential business information and market manipulation

Opportunity cost and cybercrime

Recovery costs

Obviously cybercrime is huge, will never get smaller, and no one is immune

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