The digital economy has become so fundamental to Australia’s economy that widespread interruptions from a major cybersecurity incident could cost $30b and 163,000 jobs, modelling from a “critical and deliberate” analysis of Australia’s cybersecurity industry has concluded.
Building trust – and maintaining it in the face of continual attacks – is fundamental to continued economic growth, AustCyber’s newly launched Australia’s Digital Trust Report 2020 noted in modelling the industry’s economic fundamentals and the potential financial damage of a cybersecurity strike.
Such strikes have become increasingly prevalent as Australia’s proactivity pivots the country onto the world theatre – making it such a prominent target for hackers that no less than Prime Minister Scott Morrison recently fronted the media to warn about a cyber threat so severe that he subsequently allocated $1.35b to fight it.
A recent analysis of Center for Strategic and International Studies data found that Australia was the world’s sixth most-targeted country in terms of ‘significant cyber attacks’ – those targeting government agencies, defence and high-tech companies, or comprise economic crimes with damages of greater than $1m – with 16 such incidents reported between 2006 and 2020.
This pace had escalated in 2020 as opportunistic cybercriminals took advantage of the systemic global instability caused by the COVID-19 pandemic – and, AustCyber CEO Michelle Price said, the quality of the post-pandemic recovery would be directly linked to the trust that businesses have in the cybersecurity protections put in place to protect them.
The pandemic “caused a rapid move to remote working and education, renewed focus on online business delivery and fast adaptation of supply chains using digital technologies,” she said in launching the report with a warning that just one week of digital disruption would directly cost Australia’s economy 6157 jobs and $1.2b in losses.
A four-week disruption would push direct job losses to 36,941 and economic losses to $7.3b, while indirect losses would blow out to as much as $30b and 163,042 jobs.
The potential damage from such an interruption – and the extent to which it would compromise investors’ trust in Australian industries – made avoiding such digital disruption a key priority, particularly as world economies pivot to recover after the pandemic.
Fight global, buy local
The pandemic has been massively disruptive on Australia’s digital skills sector, with programmers suffering, remote work throwing businesses into chaos, universities exploring alternative skills-development methodologies, and many workers considering a post-pandemic career change as the IT industry barely keeps its head above the rising waters of digital and economic disruption.
Yet sharks are circling below, with scammers and cybercriminals capitalising on the pandemic early and targeting remote workers at home as security researchers moonlight as cyber vigilantes to rein in the exploding cybercrime.
By quantifying the potential exposure of Australia’s economy to cybersecurity compromise, the report draws a link between economic investment and the quality of the skills-led recovery – which will be crucial in helping turn around an economy in which 1 in 6 jobs is “digitally geared”.
That investment, Price noted, would benefit the Australian economy by returning at least $4.70 in direct revenue – and a further $5.00 in “spillover benefits including job creation” – for each dollar that Federal, state, and territory governments spend on locally-built cybersecurity solutions.
Governments “must use sovereign cyber security products and services”, the report recommended, as well as underwriting “sustained capability creation and industry growth” and working with industry to drive jobs growth by developing Australia’s reputation for ‘digital trust’.
Digital activity directly contributed 527,726 jobs to the Australian economy and $317b in gross output during the last financial year, the report found, and related secondary expenditure and value creation contributed to over 2.3m Australian jobs.
Cybersecurity, specifically, contributed some 19,475 jobs and $15.7b in direct revenues to the Australian economy – nearly half the $34.6b online retail sector.
That was a much higher economic output per job ($806,161) than industries like digital health ($599,027) and online retail ($303,236), but trailed emerging industries such as solar power generation ($961,810 per job) and the space industry ($3.9m).
Properly protected, increases in digital infrastructure could actually drive significant economic and employment benefits this year and next, as COVID-19 related digital infrastructure spending – in areas such as digital activity, online retail, and the IT industry sector – creates up to $230b in economic revenue impact and a job benefit impact of 505,700 per year.
Given its fundamental role in protecting Australia’s digital post-COVID future, Price noted, cybersecurity is a ‘horizontal sector’ that underlies every other aspect of the coming economic recovery.
“The timing of the release of this report is both critical and deliberate,” she said, noting that “the quality of digitisation and its trustworthiness is now under immense pressure as the economy starts to recover from the pandemic.”
“Australia’s economic future is founded in large part on the security of this digital step-change going forward.”