Insights

Changing World: Cyber Security

June 30, 2019

In these e-mails, we tend to focus on life improvements powered by technological innovation. But we should also be mindful that technology adoption opens up new opportunities for criminal activities. Most of us receive frequent spam or even scam phone calls and phishing e-mails. A lot of us have also been victim of data breaches in places as diverse as Equifax, Marriott, Adidas and Facebook. A survey of about 250 businesses around the world conducted by Accenture has found that their annual average cost of cybercrime has almost doubled over the past 5 years (see figure).

 

 

Cybercriminals attack all type of actors: individuals, businesses, cities and even countries. These are damaging and costly attacks: the White House estimates that malicious cyber activity cost the US economy as much as $109 billion in 2016; McAfee estimates that in 2018 cybercrime cost the global economy $600 billion. It is also a pervasive phenomenon: Tenable found in a 2019 survey that as much as 90% of companies in the energy, health-care and manufacturing sectors experienced damaging cyberattacks in the past 2 years.

This has profound implications for an investor: on the one hand, it brings an additional risk to business that needs to be assessed when evaluating investment opportunities; on the other hand, it opens business opportunities for entrepreneurs that can help organizations and individuals deal with this threat. Gartner estimates that the annual spend on cyber-security was about $124 billion. This spend has been growing in the high single-digit to low double-digit range and is expected to continue to grow at that rate for the next few years.

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