Do the risks to our digital economy outweigh the benefits? Zurich and the Atlantic Council set out to answer that question by exploring four possible scenarios and discovered a startling USD 120 trillion gap between the best and worst outcome for the global economy.
The Internet and related information and communications tools have delivered enormous benefits to the global economy. These gains, however, are expected to tail off as the technologies become more ubiquitous, while the costs and associated risks look set to rise. The million dollar question, then, is whether the costs outweigh the benefits and what we can do to ensure the best possible outcome.
Zurich Insurance Group and the Atlantic Council’s Brent Scowcroft Center on International Security teamed with the Pardee Center for International Future to conduct an extensive quantitative analysis of this issue. Their findings are published in a new report, Risk Nexus: Overcome by cyber risks? Economic benefits and costs of alternate cyber futures.
The report explored four possible scenarios, from a worst-case ‘Clockwork Orange” world in which the Internet is over-run by hackers to a ‘Cyber Shangri-La’ where technology booms are driven by strong cybersecurity, delivering an estimated USD 190 trillion boost to global GDP by 2030. That is USD 120 trillion more than the worst case outcome, about 6 percent of cumulative global GDP, largely due to accumulating costs related to cyber incidents.
Disturbingly, the report notes that the one-off annual cost of managing cyber risks will begin to outweigh the annual economic benefits globally by 2019, as according to the report it already does in developed countries including the U.S.
The report offers a number of recommendations to counter this trend and to optimize the net benefits of the digital economy to society. It also highlights the need for global cooperation between the state, business and society at large to address these challenges and calls on national policymakers to “treat the Internet as a global resource that can be depleted like any other and that requires stewardship if it is to remain productive.
Disclaimer: Views expressed on this page and in the reports are not necessarily those of the Zurich Insurance Group, which accepts no responsibility for them.
