The global cost of cyber crime

Cyber crime is a growth industry that's stripping the global economy of billions of dollars each year. One study calculates the losses.
Written by Kirsten Korosec, Contributor

Cyber crime is a growth industry that's stripping the global economy of billions of dollars each year. The total losses have been the subject of debate, but a study released this week says cyber crime could cost the global economy as much as $575 billion a year.

The report by the Center for Strategic and International Studies estimates the likely annual cost to the global economy is more than $445 billion, a figure that includes both the gains to criminals and the costs to companies for recovery and defense. The maximum annual losses could be as high as $575 billion, according to the report sponsored by security software company McAfee.

The cost to individuals whose personal information was stolen is estimated at $160 billion a year. Forty million people in the U.S., roughly 15 percent of the population, have had their personal information stolen by hackers, according to the study.

While individuals suffer, the bulk of the damage exacted by cyber crime is to companies and national economies. The study found hundreds of reports of companies being hacked. For instance, 3,000 companies in the U.S. were hacked in 2013.

G20 nations tend to bear the burnt of the losses, according to the study. The four largest economies in the world--U.S., China, Japan and Germany--lost $200 billion due to cyber crime in 2013, according to the report.

For developed countries, cyber crime has shifted employment away from jobs that create the most value. For example, the organization's first report found that losses from cyber crime could translate into more than 200,000 jobs lost in the U.S. alone.

The cost of cyber crime could be higher largely because intellectual property losses are so difficult to estimate. Other forms of cyber crime include market manipulation and stolen confidential business information as well as criminals who gain access to financial networks and siphon out money.

Thumbnail photo: Jeffrey Beale

This post was originally published on Smartplanet.com

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