The effects of cybercrime extend to the financial sphere affecting not only the local but also the global economy. First, cyber attacks lead to an inherent loss of productivity in the affected networks and their affiliates. They can potentially cripple the operations of a particular government agency or the cooperation, which translates to network delays, unproductive staff time and little to no service delivery.
These are all adverse effects on the GDP of any nation. Second, cybercrime has the potential to reduce or even halt the amount of direct foreign investment on the country. A good example of this occurrence is in Nigeria. The country has a rampant amount of cybercrime the results of which have been a substantial reduction in the amount of direct foreign investment. Investors face the possibility of losing their money in such an economy.
It is speculated that the country loses as much as $80 million annually in software piracy and related fraud. In fact, internet-based companies dealing in money such as PayPal have expressed their concern about the country’s rate of cybercrime. Such incidences have far-reaching consequences on the Nigerian economy with projections showing that its cybercrime impact per capita is growing at an exponential rate. Third, economies with higher rates of cybercrime have been shown to have higher rates of loss of intellectual property.
These are not conducive environments for both innovators and investors. The lack of protection on intellectual property limits the economy in other related industries such as research and development, marketing and advertising. Fourth, countries affected by cyber attacks and cybercrime suffer from strenuous business relationship both locally and internationally.
Such states have a weaker negotiation stand and can secure little investor confidence. Thus doing business in or with such nations is tedious and in most occasions very risky. Lastly, the cost of fighting cyber attacks in itself is an incidental impact of the said occurrence. Companies and nations spend millions of dollars annually to beef up their cybersecurity measures or repair damaged infrastructure. This money could be redirected to other more profitable ventures.
Indeed, cyberterrorism has evolved over the years to claim its position as one of the primary concerns of the 21st century. It is predominantly perpetrated via the internet with the intent to cause fear. Cybercrime can be traced back to the 1990s and it can be categorized into three main categories. It has both social and economic Impacts.
Socially, it has the ability to instigate social discord, keep people under a perpetual state of emotional and psychological stress, and radicalize their political opinions. Economically, cybercrime leads to loss of profits, time, and investor confidence. It also complicates commercial engagements as well as necessitating the wastage of money while combating the issue. Thus cyberterrorism is an immediate public menace that requires immediate attention.