- Date published:
- Author:Brian Wood
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Brian Wood, VP Marketing
New Report Links Cybercrime to Loss of Half a Million US Jobs Per Year
Cybercrime is responsible for the loss of more than half a million US jobs per year, a joint report sponsored by McAfee and the Center for Strategic and International Studies finds.
Released on Tuesday, “Estimating the Cost of Cybercrime and Cyber Espionage” aims to quantify the economic impact of cybercrime, estimating a $100 billion annual loss to the US economy.
The report, CSIS argues, is more representative of the economic impact of cybercrime than other research methods like surveys because companies can’t effectively estimate what has been taken and intellectual property losses are difficult to quantify. To build out its research model, CSIS created six classifications of malicious cyber activity including the loss of IP, cybercrime, the loss of sensitive business information, opportunity costs like service disruptions, and reputational damage.
“We believe the CSIS report is the first to use actual economic modeling to build out the figures for the losses attributable to malicious cyber activity,” Mike Fey, executive vice president and chief technology officer at McAfee said in a statement. “Other estimates have been bandied about for years, but no one has put any rigor behind the effort. As policymakers, business leaders and others struggle to get their arms around why cyber security matters, they need solid information on which to base their actions.”
In June, McAfee released a report that found the average firm takes nearly 10 hours to detect a security breach, which could lead to even more financial loss.
As more research emerges around the tangible impact of cybercrime, businesses will have no choice but to take security more seriously, and will turn to their web hosting and infrastructure providers for solutions. A recent report by IDC predicts that the global market for cybersecurity solutions will reach $870 million by 2017.
“This report is also the first to connect malicious cyber activity with job loss,” James Lewis, director and senior fellow, Technology and Public Policy Program at CSIS and a co-author of the report said in a statement. “Using figures from the Commerce Department on the ratio of exports to US jobs, we arrived at a high-end estimate of 508,000 US jobs potentially lost from cyber espionage. As with other estimates in the report, however, the raw numbers might tell just part of the story. If a good portion of these jobs were high-end manufacturing jobs that moved overseas because of intellectual property losses, the effects could be more wide ranging.”
A second report is forthcoming which will look at the impact of cyber security losses on the pace of innovation, and the social costs associated with crime and job loss.
While cybercrime may impact innovation, patent trolls are another factor affecting US jobs and economic costs. According to Boston University, patent trolls cost the US economy about $29 billion in 2011.
The full CSIS and McAfee report is available for download on the CSIS website.