McAfee
report paints grim picture of lucrative industry, despite incomplete data.
Cybercrime
could be costing the global economy as much as $575 billion annually, according
to a new report from McAfee.
The
Intel-owned security company based its estimate on a range of sources, from
government agencies to NGOs and academic institutions, counting both direct and
indirect costs.
The
report, Estimating the Global Cost of
Cybercrime explained the methodology as follows:
“This
study assumes that the cost of cybercrime is a constant share of national
income, adjusted for levels of development. We calculated the likely global
cost by looking at publically available data from individual countries,
buttressed by interviews with government officials and experts. We looked for
confirming evidence for these numbers by looking at data on IP theft, fraud, or
recovery costs. In addition to a mass of anecdotes, we ultimately found
aggregate data for 51 countries in all regions of the world who account for 80%
of global income. We used this data to estimate the global cost, adjusting for
differences among regions.”
However,
the vendor cautioned that “differences in the thoroughness of national
accounting”, as well as underreporting of incidents and the difficulty of
valuing IP all make calculations an imprecise art.
High
income countries lost more as a percentage of GDP, which could be because they
have better accounting systems in place and/or that their IP is more valuable
and therefore a bigger target for criminals.
The
$575bn figure therefore comes from extrapolating a global total from high loss
countries. It could be as low as $375bn if McAfee had extrapolated from
“all countries where we could find open source data”.
On the
other hand, the figure would be $445bn if the firm aggregated costs as a share
of regional incomes, it said.
Whatever
the final figure, it’s clear that richer countries in Europe, North America and
Asia lost the most, because they are bigger targets and provide a better return
on investment for the hacker. For example, G20 countries are said to have lost
$200bn to cybercrime.
The
UK, at 0.16%, had one of the lowest losses to cybercrime as a percentage of
GDP, while the US (0.64%), came just ahead of China (0.63%) but trailed the
most affected G20 nation: Germany (1.6%).
McAfee
warned that as more businesses and consumers move online and more devices
connect to the internet of things, cybercrime will continue to grow. IP theft,
a “tax on innovation” will also increase as those countries which acquire it
become more adept at building a competitive advantage.
Aside
from calling for improvements to technology and defences, the report urged
governments to work harder on creating best practice cybersecurity standards
and cross-border law enforcement agreements.
It
added that they must do a better job on accounting for cybercrime losses to
provide a more comprehensive picture on where deficiencies lie.
For
the record, McAfee's report last year estimated cybercrime losses of $100-500bn
annually.
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