Cyber-crime costs region's businesses almost £107 million a year - a new report reveals
Story supplied by LU Press Office
A report into the cyber security market in the North West has revealed that online criminal activity is costing key sectors in the regional economy almost £107 million a year - threatening growth, businesses and jobs.
Key regional businesses and organisations involved in health, transport, professional and scientific sectors are at significant risk to cyber-crime, according to the report.
Companies involved in advanced engineering, manufacturing, finance and insurance, business administration and support services, as well as public administration and defence organisations, are also vulnerable to large financial or critical information losses.
The report, commissioned by Lancaster University's Security Lancaster - an EPSRC-GCHQ Academic Centre of Excellence in Cyber Security Research - also identified that wider take-up of robust cyber-security measures by North West businesses and organisations could help to avoid more than £70 million in losses to cyber-criminals.
Smaller businesses are most vulnerable to hackers and industrial espionage in part because of their reduced size and inability to withstand significant losses, but also because of poor awareness of cyber-security, meaning they are less likely to have robust security measures in place. The North West feels this vulnerability more acutely because its economy is more balanced towards SMEs than other parts of the UK.
Dr Daniel Prince, associate director of Security Lancaster - Lancaster University's dedicated security research centre, said: "This report highlights the growing threat that cyber-crime poses for businesses and organisations across the region.
"As technology continually evolves and becomes more prevalent in business and our personal lives, there are more opportunities for criminals, who may not even be in the UK, to steal money, private data, or intellectual property.
"Business leaders need to take these threats seriously and put security measures in place if individual companies, and the North West as a whole, are to prosper."
The report's figures are based on a very conservative estimate of the number of companies that experience a breach of their security.
The report takes into account that 50 per cent of firms experience at least one breach a year - previous reports by organisations such as Price Waterhouse Coopers suggest cyber-security breaches can be as high as 93 per cent of large companies and 87 per cent of SMEs.
Exact figures indicating the extent of cyber-crime are notoriously difficult to obtain due to many victims' reluctance to admit breaches through fear of reputational damage.
Lancaster University commissioned the independent report, produced by Pierre Audoin Consultants, as part of market research to examine the cost of cyber-crime to the region, and also the potential size of the market for the cyber-security industry.
The UK cyber security market is worth £2.7billion - the North West-based industry consists of around six per cent of this total. The UK Government has a target of raising cyber-security exports to £2billion by 2018. The report shows that the North West's cyber-security market is currently worth around £428 million a year. However, most of the current demand is being met by cyber-security businesses based outside the region.
Therefore there is significant potential to grow the regional cyber-security industry.
Dr Prince said: "Despite the alarming figures that reveal how damaging cyber-crime is to our economy the report also highlights that there are business opportunities to grow the cyber-security sector in the region.
"The report highlights the need for business owners to undertake simple steps to protect their businesses and livelihoods. This provides a very significant market demand for business providing the vital protection to keep our economy on track.
"We have the potential to create an industry worth £100 millions in the North West. However, as the report also points out, there is a shortage of people with the right skills to fulfil these roles - we are working on addressing that skills-gap here at Lancaster University, as well as providing support through our academic and research expertise."
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