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Cyber Crime costs world economy £266M

11 Jun 14  | Cyber Security

Global ICT security firm McAfee has warned companies about the rising costs of cyber crime, reporting worldwide losses at a staggering £266bn ($455bn).

This roughly equates to a loss of 350,000 jobs in Europe and the US, according to a study compiled by McAfee and the Center for Strategic and International Studies (CSIS).

Jim Lewis, a Senior Director at CSIS, said; "Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors,".

"For developed countries, cybercrime has serious implications for employment. The effect of cybercrime is to shift employment away from jobs that create the most value. Even small changes in GDP can affect employment."

The recent study identified an increase in assaults on intellectual property, and McAfee called it "particularly damaging."

The CSIS found that traditionally it's the UK retailers that suffer the most, with cyber-hacking related losses amounting to £850m.

Personal breaches are also on the climb, with McAfee estimating that "personal information" breaches could cost in excess of $160bn and affect 800 million people worldwide.

The UK ranks fifth in a table of most affected countries and losses are estimated at $11.4bn, or around half a percent of gross national product.

"It is clear that cybercrime has a real and detrimental impact on the global economy. Over time, cybercrime has become a growth industry; the returns are great, and the risks are low," said Raj Samani, EMEA CTO at McAfee.

"However, this situation is not irreparable as stronger technology defences, greater collaboration between nations, and improved public private partnerships could prevent and reduce the loss from cybercrime."

Recovery costs are an increasing problem too, according to the report, which found that in Italy, the $8.5bn cost of cybercrime dwarfed the actual value of the losses directly caused by hacking, which stood at $875m.

"To put that into context, if cybercrime were a country it would have the 27th largest economy on the planet. Therefore this report should help everyone better visualise the scale of the threat we all face today."

The warnings come after a spate of cyber attacks and database breaches that affected ebay, Spotify and Office as efforts to tackle cyber criminals ramp up.

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