Cyberattacks on critical infrastructure: An economic perspective

Piotr Lis and Mendel Jacob
Additional contact information
Mendel Jacob: The Hogeg Blockchain Research Institute, Coller School of Management, Tel-Aviv University.

Economics and Business Review, 2019, vol. 5, issue 2, 24-47

Abstract: The aim of this article is to analyze the economic aspects of cybersecurity of critical infrastructure defined as physical or virtual systems and assets that are vital to a country’s functioning and whose incapacitation or destruction would have a debilitating impact on national, economic, military and public security. The functioning of modern states, firms and individuals increasingly relies on digital or cyber technologies and this trend has also materialized in various facets of critical infrastructure. Critical infrastructure presents a new cybersecurity area of attacks and threats that requires the attention of regulators and service providers. Deploying critical infrastructure systems without suitable cybersecurity might make them vulnerable to intrinsic failures or malicious attacks and result in serious negative consequences. In this article a fuller view of costs and losses associated with cyberattacks that includes both private and external (social) costs is proposed. An application of the cost-benefit analysis or the Return on Security Investment (ROSI) indicator is presented to evaluate the worthiness of cybersecurity efforts and analyze the costs associated with some major cyberattacks in recent years. The “Identify, Protect, Detect, Respond and Recover” (IPDRR) framework of organizing cybersecurity efforts is also proposed as well as an illustration as to how the blockchain technology could be utilized to improve security and efficiency within a critical infrastructure.

Keywords: critical infrastructure; economics of cybersecurity; blockchain; globalized economy; smart grid (search for similar items in EconPapers)
JEL-codes: D61 D62 D81 L9 O18 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.18559/ebr.2019.2.2 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobur:v:5:y:2019:i:2:p:24-47:n:2

DOI: 10.18559/ebr.2019.2.2

Access Statistics for this article

Economics and Business Review is currently edited by Tadeusz Kowalski

More articles in Economics and Business Review from Sciendo
Bibliographic data for series maintained by Peter Golla ().