Global annual cost of cyber crime estimated at $445B: report

Cyber crime and cyber espionage cost the global economy about $445 billion each year, according to new research looking at direct and indirect losses.

The report published June 9 from the Center for Strategic and International Studies and sponsored by McAfee, admits the estimate is based on incomplete data since many incidents go unreported, many companies do not announce losses, and some data available on incidents is incomplete.

For instance, previous surveys revealed hacked Japan-based companies lost on average about half of hacked US companies. However, explained CSIS, “if the rate of loss for Japanese companies is consistent with the rates for the US, China or Germany, this means that the figure provided to us by officials from several ministries may underestimate the cost of cybercrime by two-thirds.”

Nevertheless, the CSIS said it accumulated data from 51 countries, accounting for about 80 percent of global income. Using just high-income countries came up with an global estimate of $575 billion. Using only data from countries where the center could find open-source data gave a total of $375 billion. The approached used aggregated costs as a share of regional incomes.

CSIS acknowledged the possibility of an overestimation, “but the wealth of anecdotal data on the number of incidents and their effect suggests otherwise.”

“Losses from the US, China, Japan and Germany totaled $200 billion. “Low-income countries have smaller losses, but this will change as these countries increase their use of the Internet and as cybercriminals move to exploit mobile platforms—the preferred source for connectivity in the developing world,” said CSIS, adding that cyber crime will grow without more international cooperation.

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