U.S Economy is Losing Billions of Dollars Yearly to Cyber Crime

As major economies in the global economy continue to develop with advancement in digital technologies, new concerns are rising up across all sectors. The US economy makes a significant part of the global economy and also enjoys some of the most advanced technologies. But it’s not all good and no bad for the world’s largest GDP. Cyber security issues are just as sophisticated as its economy.

Cyberattacks cost the economy billions of dollars every year. In February 2018, the White House announced that the U.S economy lost between $57 billion and $109 billion in 2016. These estimates came from report by the Council of Economic Advisors. The preparation of the report focused on analyzing the economic impact of cyber attacks on the government and various industries within the economy.

Industries that make up the largest shares of the GDP were hit the hardest by cyber security breaches and these include finance, manufacturing, healthcare, and government. The White House pointed out that cyberattacks against the economy’s critical infrastructure sectors such as manufacturing and finance could potentially damage the economy.

How activities by different cyber threat actors affect the economy

Actors in the cyber threat ecosystem exist in 6 broad categories: Nation-states, corporate competitors, hacktivists, organized criminal groups, company insiders, and opportunists. Three of these groups, namely nation-states, hacktivists, and company insiders can pose considerable threat to the economy and we are going to discuss them below.

1. Nation-states

The report by the Council of Economic Advisors identified nation-states that propagate cyber threats against the USA. They include China, Russia, Iran, and North Korea. These actors are usually well funded to undertake highly sophisticated attacks on targeted organizations that have national significance. The motivation of nation-states is to introduce political, economic, or military flaws that can potentially weaken the economy.

One of the tactics this group of cyber threat propagators uses is industrial espionage, which involves spying on a targeted rival company or manufacturer to discover its corporate secrets. Nation-states also engage in electronic theft of funds as well as ransom attacks when they need funds. According to the Insurance Information Institute, the amount of money stolen through identity theft and related data breaches in 2017 hit $16.8 billion.

Nation-states may engage in malicious activities to destroy businesses in the US following international incidents such as sanctions. All these activities affect the US economy, industries, businesses and civilians.

2. Hacktivists

Usually private individuals or groups with a political agenda, hacktivists target high-profile institutions or people. They carry out activities to spread propaganda about government projects, the opposition and organizations allied to it and so on.

When successful, hacktivists can cause devastating political and economic effects. For instance, disinformation and propaganda can destabilize states and economies. Cyberattacks by this group can also undermine democratic processes thus rendering government investment

in democratic growth worthless. When there is negative propaganda about government, projects may stall and this delays the economic benefits of public investment.

3. Company insiders

Company insiders are usually employees or ex-employees that are not happy with their employer. They carry out cyber attacks either for revenge or financial gain. The 2018 Insider Threat Report by CA Technologies stated that the most damaging security threats that organizations face today originate from trusted insiders (both negligent and malicious insiders).

About 27% of the organizations interviewed during the preparation of the report stated that the approximate cost of an insider attack ranges from $100,000 and $500,000. Multiplying this by about 1000 inside attack incidents reported every year over the last few years, the total cost sums up to between $100million and $500million for only 27% of organizations. The overall cost of this type of cyber threat is estimated at around $3billion per year. These losses negatively affect the companies’ finances, their employees, suppliers, and the economy as a whole.

It is important to note that every successful cyber attack has costs, however small they might be. These costs add up to the billions of dollars the economy loses every year. Everyone has a responsibility to fight cybercrime, and the least you can do is protect yourself in the little or big ways you can. One of helpful measures for individual and company protection against cyber crime is using a VPN when using the internet, and in particular when on public networks such as public Wi-fi. Using a reliable service like GoBestVPN.com will help to make sure that you are
protected from malicious groups online. This effort will go a long way in fighting cyber crime and reducing its cost on the economy.