Cyber crime evidently leads to job loss as 508,000 U.S. jobs were lost as a result of malicious cyber activity, according to a McAfee sponsored report.
This first-of-its-kind report quantifies the economic impact of cyber crime and helps readers better understand the true cost of cyber crime.
Findings of the report indicate that financial assets or intellectual property are not the only losses caused by malicious cyber activity. Businesses often have to deal with opportunity costs and damage to brand and reputation due to such activities.
Other losses include the cost of increased spending on cyber security, consumer losses from fraud and the opportunity costs of service disruptions.
McAfee advises businesses to approach each of these categories carefully as they help calculate the cost to societies.
“Other estimates have been bandied about for years, but no one has put any rigour behind the effort,” said Mike Fey, executive vice president and chief technology officer at McAfee. “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.”
Effect on global economy
Although the authors of the report have worked hard to develop their estimates, they note that they have not been able to calculate the exact impact of cyber espionage and cyber crime on the global economy.
However, they are sure that cyber espionage and cyber crime significantly decrease the pace of innovation. Moreover, these two activities bring distortion to trade between two countries.
The authors of the report also note that the loss of 508,000 U.S. jobs is only an estimate and the effects could be more wide-ranging if a good portion of these jobs were high-end manufacturing jobs that moved overseas because of intellectual property losses.
McAfee engaged the Center for Strategic and International Studies (CSIS) to build an economic model and methodology to accurately estimate these losses.
The company also plans to launch a second report in the coming days and it will be dedicated to review the ramifications of cyber security losses on the pace of innovation, the flow of trade and the social costs associated with crime and job loss.
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