Report for the Cabinet Office estimates that theft of intellectual property costs �9.2bn a year alone
Cyber crime costs the UK more than �27bn a year, according to a report commissioned by the Cabinet Office into the integrity of computer systems and threats of industrial espionage.
The extraordinarily high estimate was revealed by the security minister, Baroness Neville-Jones, and reflects the spread of computers into many aspects of domestic and business life.
The report, by information consultants Detica for the Cabinet Office, calculated that the theft of intellectual property ? such as designs and formulas ? from businesses costs �9.2bn. Pharmaceutical, biotechnology, electronics, IT and chemicals firms are being hit hardest.
Industrial espionage, including firms spying on each other, is said to cost �7.6bn. Cyber crime also costs citizens �3.1bn a year and the government �2.2bn a year, the report said.
The Cabinet Office said that "in all probability, and in line with worst-case scenarios, the real impact of cyber crime is likely to be much greater". It is thought that many firms are reluctant to report cyber attacks out of fear that it would damage their reputation.
Attacks on the UK's IT systems were identified in last year's strategic defence and security review (SDSR) as one of the four most serious threats to national security, alongside terrorism, natural disasters and major accidents.
Backed by �650m in new government funding announced in the SDSR, the national cyber security programme will develop ways of responding to threats from states, criminals and terrorists.
The size of the cyber crime estimate has surprised some experts. The UK Payments Administration, the banks' centralised clearing system, said that levels of online fraud and "card-not-present" fraud had been falling due to improved security. The banks are expected to record smaller losses of around �50m for online banking fraud and �230m in card-not-present frauds this year.
Neville-Jones said that the best response was to disrupt criminal networks rather than prosecute people. She said: "I don't myself believe that the successful combating of this kind of crime is going to lie primarily through prosecutions.
"I think it's going to be through much better defences and disruption ? screwing up their network. It doesn't have to be an offensive capability, but it's perfectly possible, as we know, just as an intruder can screw up a company's network, the reverse can happen.
"If you look at terrorism, if we'd relied on prosecution, we would have had lots of incidents by now. We have to rely to a very significant extent on actually disrupting the activity while in course."
David Cameron met representatives of some of Britain's biggest private companies this week to talk about protecting the country against cyber attack.
Foreign secretary William Hague and Neville-Jones also took part in the talks at 10 Downing Street, with firms including BA, Centrica, National Grid, BT, Barclays, HSBC and GlaxoSmithKline. They agreed to form a working party to look at detailed proposals for action, drawing on expertise from the private sector.
The SDSR said that it was impossible to put a precise figure on the financial cost of criminals using the internet. "Over the last decade the threat to national security and prosperity from cyber attacks has increased exponentially," it stated.
Source: http://www.guardian.co.uk/uk/2011/feb/17/cyber-crime-costs-uk-27-billion-a-year
BHARTI AIRTEL BT GROUP CANON MEMC ELECTRONIC MATERIALS MICROSOFT
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