The Effects of Cybercrime on the Global Economy

Within the past few weeks, news of the cyber-hack into Sony Pictures' confidential files has demonstrated once again the undeniable influence that individuals can hold over a major corporation due to the empowerment of the globalization of modern technology. Unlike any other time in human history, the rise of the "Information Age," which has led largely to positive global effects like easing barriers to trade, efficiency in communication or sharing ideas, and enhancing the private citizen's ability to raise awareness for social progress, has also enabled criminal activity to pose serious threats to not only fellow individuals, but massive corporations and governments as well. For this reason, the White House has called the attacks on Sony a "serious national security matter" due to the effects that cybercrime can inflict not only on a nation's informational security, but also on the global economy.

While Sony's decision to cancel the release of "The Interview," the film that sparked the hacks into Sony's information, has reportedly cost the corporation $200 million USD, the Center for Strategic and International Studies (CSIS) found that cybercrime costs the global economy about $445 billion USD every year. Furthermore, losses from theft of intellectual property of individuals exceeds $160 billion USD each year. Studies show that most victims of cyber-hacking come from the world's most developed countries, including the United States, China, Japan, and Germany. Although some major cyber-attacks are government sponsored, such as the Sony attack which was allegedly supported by North Korea, the majority of attacks occur against private citizens and are connected to the theft of personal information. 

Regarding the international system as a whole, cyber-attacks cause a major stumbling block for global economic growth due to its detrimental effects on innovation and the theft of ideas. Many small businesses without adequate protection are hacked without any knowledge of the act until their sales greatly suffer years later due to competitors gaining knowledge of the company's logistics, target markets, or personal information. As shown by the Sony attack, even some of the largest companies involved in software development can still fall victim to these attacks, but fortunately international collaboration has begun to show signs of reducing the rate of cyber crime. Therefore, as technological advances continue to spur on the efficiency in global commerce, firms must focus on protecting their personal and corporate information from information traders involved in the illicit markets of cybercrime.