The cost of cyber-crime is greater than the GDPs of countries like Singapore, Austria, Thailand, Denmark and South Africa

Cost of cyber-crime greater than most nations' GDP

The cost of cyber-crime is so high that if it were a nation it would be ranked 27th in the world based on revenue, according to a new report.

The practice is now such big business that it is currently costing the world more than $445bn (£266bn) a year, according to a new report from the public policy research institution Center for Strategic and International Studies (CSIS), equal to more than 0.5 per cent of the world's total gross domestic product (GDP).

Various studies have estimated that the internet economy generates between $2tn and $3tn a year, but according to the CSIS analysis, cybercrime extracts between 15 and 20 per cent of that value created by the internet.

And its effects are most keenly felt in advanced economies where IP creation and IP-intensive industries are a large driver for growth, as opposed to industries like agriculture or low-level manufacturing, meaning high-income countries lost more as a per cent of GDP than low-income countries – as much as 0.9 per cent on average.

“Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors,” said Jim Lewis of CSIS.  “For developed countries, cybercrime has serious implications for employment. The effect of cybercrime is to shift employment away from jobs that create the most value. Even small changes in GDP can affect employment.”

According to the authors of the report, studies of how employment varies with export growth suggest that the losses from cyber-crime could cost as many as 200,000 jobs in the USA, while European Union data suggested Europe could lose as many as 150,000 jobs.

The report was commissioned by online security firm McAfee and security experts, including some from EU law enforcement agency Europol and Nato, have been discussing the report and what more needs to be done to stop the increasing number of web attacks.

According to Raj Samani, chief technical officer of McAfee in Europe and a special adviser to Europol, not protecting yourself online is so irresponsible that it could damage the entire UK economy in the long term as ideas are stolen and taken elsewhere, but the big problem remains a lack of understanding among the public about the threats that exist.

"We want the economy to grow, and it's being held back by cyber-crime, and actually if you're not taking measures to protect yourself you're contributing to our economy not growing. If you're not taking important measures you're contributing to criminals, and I mean nasty criminals, making money off you. Not taking action is resulting in people losing their jobs," he said.

The report says there are 20 to 30 cyber-crime groups that were operating on a "nation-state level", meaning that they are working on an industrial scale, and can overcome almost any kind of web defence they face.

"Ideas are the currency of the digital age and our ideas are being stolen. Do you want the next Facebook to be out of London and Silicon Roundabout? It won't be if we don't protect our data because they'll steal it and run it somewhere else,” he said.

"This is important: it's the future of economic growth in this country. It's so important that people understand. We're not talking about viruses, we're talking about protecting yourself and preserving your livelihood."

Operation Tovar, which disrupted the viruses that led to the National Crime Agency issuing a two-week alert last week, has been highlighted as an example of the sort of global collaboration that needs to occur more often, and be as widely reported in order to help users better understand the threat, and the value of their data.

Paul Gillen, from Europol, said that this operation, which involved officers from the US, the UK and around the world, was the perfect example of the collaboration that is needed to take on cyber-criminals.

"No single law enforcement agency can get an instant result on their own. We have to work in partnerships and Operation Tovar was a great example of this with the pooling of resources and ideas. This is not the end of the war however. The war goes on," he said.

Recent articles

Info Message

Our sites use cookies to support some functionality, and to collect anonymous user data.

Learn more about IET cookies and how to control them

Close