The Morales Law Firm would like to share this article: Hacking seen as Growth Industry in Report published by the San Francisco Chronicle.
By: Chris Strohm
Hacking seen as Growth Industry in Report
Cybercrime remains a growth industry.
That’s the main message from former U.S. intelligence officials, who in a report Monday outlined scenarios for how $445 billion per year in trade theft due to computer hackers will worsen. They warned that financial companies, retailers and energy companies are at risk from thieves who are becoming more sophisticated at pilfering data from their servers.
The outlook “is increased losses and slower growth,” with no “credible scenario in which cybercrime losses diminish,” according to the report published by the Center for Strategic and International Studies. Some of the damage will be hard to trace, such as economic downturns caused by foreign competitors selling products based on stolen designs and financial markets undermined by hackers.
The damage done already includes 40 million people in the U.S. having their personal information stolen within the last year and an unnamed oil company losing hundreds of millions of dollars in business opportunities when hackers obtained its oilfield exploration data, according to the report. Network security company McAfee Inc. sponsored the report for CSIS, a nonprofit policy research organization in Washington.
Online crime could result in the loss of 200,000 U.S. jobs and 150,000 European jobs, with the total cost rising to as much as $575 billion, according to the report.
“Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors,” the authors of the report said.
The study is intended to provide a comprehensive estimate of the cost of global hacker attacks as governments and companies fight digital incursions that could have catastrophic consequences.
The biggest driver in the cost is stolen intellectual property, said Tom Gann, vice president of government relations for McAfee, a unit of Santa Clara chipmaker Intel Corp.
“It is increasingly likely that the hackers will realize they can also make money in trading ahead of the plan for a merger,” said Stewart Baker, a lead author of the study who was general counsel for the National Security Agency in the 1990s and later an assistant secretary at the Department of Homeland Security, who is now a partner at the law firm Steptoe & Johnson LLP.
Trying to pinpoint the cost of hacking attacks hasn’t been easy and previous estimates have varied. Estimates should be viewed with skepticism, especially because the value of intellectual property can be exaggerated, said Jim Harper, a senior fellow with the nonprofit Cato Institute.