Encryption, Trust, and the Online Economy: An Assessment of the Economic Benefits Associated with Encryption

Tags: 2010s Economic Impact

Authors: Hagemann, Ryan and Hampson, Josh

Published: November 2015

URL: https://www.niskanencenter.org/encryption-trust-and-the-online-economy-an-assessment-of-the-economic-benefits-associated-with-encryption/

Abstract: On November 9, 2015, the Niskanen Center published a report that assessed the economic benefits associated with the use of software-based encryption. The report’s aim is to “provide a ballpark estimate of the economic value of encryption” and “suggest how a more accurate estimate might be achieved”, with the end goal of showing “the way toward a better understanding of the role and benefit of encryption in the Internet-age economy”. The report used categories metrics that rely on encryption for their analysis: “(1) online banking and financial transactions, (2) e-Commerce and online retail, (3) information communication technologies (ICT) security revenue, employment, and insurance, (4) research and development investment, and (5) consumer surplus.” The report assesses the benefits of the use of encryption in each of these categories, and concludes that strong encryption is vital to economic health.