CYBER RESILIENCE HOW TO PROTECT SMALL FIRMS IN THE DIGITAL ECONOMY

Cyber Resilience: How to protect small firms in the digital economy
EXECUTIVE SUMMARY
The importance of small businesses and the digital economy
Smaller businesses make up the overwhelming majority of the UK’s business population. It is in small
businesses that most of the UK’s private sector workforce is employed. Small businesses create more
new jobs than larger businesses. They also contribute the majority of both private sector employment
and employment creation in the UK. Consequently, small businesses are vital to the future success of
the UK’s economy.
The spread of digital technology offers smaller businesses a number of opportunities to thrive. Small
firms are looking to take advantage of these opportunities as effectively as possible by embracing
new information technology. Such technology can reduce operating costs, play a central role in
increasing productivity and help small businesses to reach new customers.
Cyber crime poses a significant risk to small businesses
The digital element of the economy does however come with a significant downside – the opportunities
for legitimate business are matched by opportunities for criminals to commit increasingly sophisticated
and highly lucrative crime. Foreign Governments can also take the opportunity to steal valuable
economic assets such as the intellectual property (IP) of small businesses or use small businesses as
a route to stealing the IP of larger businesses or to gain access to Government systems.
The costs of these downsides is increasing. FSB’s recent survey of crime against small businesses
found that: 1
• Two-thirds (66%) of our members had been a victim of cyber crime.
• The average number of times that small businesses had been a victim of cyber crime over the
two years (2014 and 2015), was four.
• Small businesses were the victims of around seven million cyber crimes per year (in 2014 and 2015).
• The average cost of cyber crime against small businesses, over the two-year period surveyed,
was £3,000.
• The total annual cost to small business was around £5.26 billion (over 2014 and 2015).
Small businesses face a number of challenges
Cyber threats are growing because of:
• A number of vulnerabilities in the digital communications networks and supply chains which
underpin the production and circulation of goods and services to consumers.
• The lucrative profits that can be made by cyber criminals through exploiting these vulnerabilities,
with few downside risks.
• The temptation of being able to steal the IP of competitor businesses and achieve a commercial
advantage, again with minimal risk.
• The politics of statecraft and the ease with which network and supply chain vulnerabilities enable
one Government to spy on the economic activities of rival states.
• The political agenda of ‘hacktivists’.
There are two main categories of vulnerabilities which pervade the digital communication networks
and commercial supply chains (and which are exploited by cyber criminals) of the economy:
- Organisational vulnerabilities: These are weaknesses in the procedures, processes and
human behaviour within a business. These have significant consequences for the security
and integrity of the assets of a small business such as financial details and customer data.
- Technological vulnerabilities: These are weaknesses in the technology itself, which can
leave those using the technology, such as small businesses, open to attack.
1 FSB, Business Crime Survey, 2016.
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