Cyber espionage and other malicious cyber crimes cost the U.S. economy between $24 billion and $120 billion annually, according to a report released Monday by the Center for Strategic and International Studies (CSIS) and McAfee.
The report is part of a broader effort to create a model for quantifying the damages caused by cyber espionage and crime, including the loss of intellectual property, reputation damage and the impact to U.S. jobs.
Estimates have ranged from $6 billion to $1 trillion, said James Lewis, a cybersecurity expert at CSIS, who co-authored the report with Stewart Baker, a former assistant secretary for policy at the Department of Homeland Security.
The goal is to narrow the range of estimated damages in a follow-up report. Once a more precise range is determined, Lewis said he wants to flesh out the data by industry sector and determine which are most at risk to cyber crime and espionage. This type of data could be useful for companies as they calculate cyber risks and the impact of being hacked and losing company secrets, Lewis said at a Washington event Monday when the report was released.
Phyllis Schneck, vice president and chief technology officer for McAfee‘s global public sector agrees. Schneck said the report may ultimately help companies decide how best to secure their systems, in light of the administration’s work with industry to create voluntary standards for securing critical infrastructure.
“Studies likely this, no matter what the number is ... should help put logic into what is recommended going forward,” Schneck said. CSIS conducted the report for McAfee.
The interim report relied on expert interviews and data provided by other reports and federal agencies to estimateeconomic damage caused by malicious cyber crime both in the U.S. and globally. It estimates global losses between $300 billion and $1 trillion annually.
“The dollar amount, large as it is likely to be, may not fully reflect the damage to the global economy,” according to the report. “Cyber espionage and crime slows the pace of innovation, distorts trade, and brings with it the social costs associated with crime and job loss. This larger effect may be more important than any actual number and it is one we will focus on in our final report.”