Report: Cybercrime Costs $445 Billion Annually

Report: Cybercrime Costs $445 Billion Annually

This post is also available in: heעברית (Hebrew)

16590047_m featureA Washington think tank has estimated the likely annual cost of cybercrime and economic espionage to the world economy at more than $445 billion — or almost 1 percent of global income.

According to the Washington Post the estimate by the Center for Strategic and International Studies is lower than the eye-popping $1 trillion figure cited by President Obama, but it nonetheless puts cybercrime in the ranks of drug trafficking in terms of worldwide economic harm.

The report, funded by the security firm McAfee, which is part of Intel Security, represents one of the first efforts to analyze the costs, drawing on a variety of data.

According to the report, the most advanced economies suffered the greatest losses. The United States, Germany and China together accounted for about $200 billion of the total in 2013. Much of that was due to theft of intellectual property by foreign governments.

Though the report does not break out a figure for that, or name countries behind such theft, the U.S. government has publicly named China as the major perpetrator of cyber economic espionage against the United States.

iHLS – Israel Homeland Security

The Chinese government has accused the United States of being one of the biggest perpetrators of cyber-espionage, but the U.S. government has always objected that it does not steal intellectual property and hand it to its own industries to give them a competitive advantage.

CSIS estimated that the United States lost about $100 billion. Germany was second with $60 billion, and China followed with $45 billion. In both the United States and China, the losses represent about 0.6 percent of their economies, while Germany’s loss is 1.6 percent. Japan, the world’s fourth largest economy, reported losses of $1 billion, which researchers said was extremely low and not credible.

The report stated that countries appear to tolerate cybercrime losses as long as they stay at less than 2 percent of their national income. If losses rise above 2 percent, “we assume it would prompt much stronger calls for action as companies and societies find the burden unacceptable,” it said.