An Analysis of Economic Losses from Cyberattacks:Based on Input–Output Model and Production Function

Abstract Recently, there has been an increase in the global economic losses from cyberattacks. However, analysis of economic damage caused by cyberattacks in Japan has been analyzed mainly for the attacked companies and the damage to other companies, industries, and the whole country has not been sufficiently analyzed. Using the input–output model, this study analyzes the amount of economic loss from cyberattacks in Japan in order to improve the accuracy of damage prediction and various national measures. Specifically, first, we estimate the annual damage amount by industry based on cyber incident data collected through interviews and hearings by Japanese independent administrative agencies. Second, using the input-output model, we devise a model estimating the amount of damage to the entire country. Third, using the guessing method, we compare our findings with existing well-known overseas guesses and verified this model. The results show that the direct, spillover, and total damages to all industries (nationwide) are approximately 279 billion yen, 443.8 billion yen, and 722.7 billion yen, respectively. This study contributes to the future research on cyber resilience, by analyzing the damage caused by cyberattacks from a macroeconomic perspective using production functions and input–output tables.