Industrial Espionage

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1. How has the revolution in information technology impacted business opportunities and risks in the global market place?

Entrepreneurs cannot succeed without a willingness to incur at least some risk; the very act of designing new models for old forms is itself an inherently risky proposition. However, while research regarding risk-taking behavior as a key to entrepreneurial success has proliferated for the past century, there remains a lack of conclusive evidence suggesting that risk-taking behavior is a key component to venture growth. To this end, the notion of “risk” common to the marketplace of products and ideas is not new, though it has been compounded to some extent. Nevertheless, it is not entirely clear that the risks of doing business today in a technologically evolved marketplace are any less serious than those that have always attended to the doing of business.

To be sure, as pointed out by Boni and Kovacich, the costs entailed in ensuring stable defenses against “netspionage” can be prohibitive. Indeed, the costs involved in the implementation of a proper and efficient electronic defense often run the risk of detrimentally impacting a corporation’s bottom line (Boni and Kovacich, 2000). With shareholder returns and profits being of primary concern to any business, there is some risk entailed in allocating funds for defense against would-be saboteurs or industrial spies. However, these costs are far less than those entailed in not providing for such defenses, thereby risking the ire of shareholders and investors.

There are also substantial costs entailed in the mere identification of risks and threats to corporate security. Often, the motivations and intentions of corporate spies or industrial raiders are unclear, thereby requiring the expenditure of resources toward the mere determination of whether corporate electronic security is at risk. Once again, however, these costs are well-placed in that they protect long-term shareholder interest and investor confidence.

2. Compare and contrast competitive intelligence with industrial espionage. Please be as specific and detailed as possible.

Simply put, while corporate or industrial espionage is illegal, competitive intelligence gathering entails the expenditure of all legal resources in the legal acquisition of industry-specific information, which is in turn put to use by corporate actors in the furtherance of a corporate agenda. Ultimately, competitive intelligence is a “key enabler of business success in the information age” (Boni and Kovacich, 2000). To be sure, both industrial espionage and competitive intelligence ultimately seek the same ends and the means to these ends can often appear disturbingly similar. 

Essentially, both these processes involve the gathering of information via means that allow the gathering entity to remain undisclosed to the party against whom said information may be brought to bear. There is no means, legal or otherwise, of guarding against competitive intelligence gathering, as the process entails anything from random database searches, scouring of social media and the like. Recently, revelations of NSA “whistleblower” Edward Snowden highlighted the blurred line between industrial espionage and competitive intelligence. Ultimately, unless illegalities are involved, corporate intelligence is fair game.

In further attacking the National Security Agency, Snowden announced that the NSA had also engaged in industrial espionage, as against the German government and any corporations headquartered in Germany. In describing this “industrial espionage,” however, Snowden is merely speaking to an intelligence-gathering operation, at no time suggesting that “espionage” is actually involved, but rather that if the NSA happens upon information through extensive research, it will use it (Kirchsbaum, 2013). This type of operation may, in fact, amount to some form of corporate espionage. However, in the terms described by Snowden, there is nothing illegal about acquiring information regarding some corporate entity, which in turn serves to afford the corporate gatherer a competitive advantage in whatever marketplace.

3. Compare and contract industrial espionage and economic espionage. Be as specific and detailed as possible.

Forms of industrial or economic espionage have existed for many years. These forms of spying date back to well before the technological era (Boni and Kovacich, 2000). Indeed, when Nikola Tesla was engaged in some of the most sophisticated electricity experiments in Colorado Springs, employees of Thomas Edison’s New Jersey-based corporation would be directed to sabotage Tesla’s experiments in the event that they could not determine the manner in which Tesla conducted them for the purpose of explaining to Edison how they might be duplicated or improved upon. There is a fundamental distinction thought to exist between industrial espionage and economic espionage.

In a sense, industrial espionage is an umbrella term applied to forms of espionage such as economic espionage. Industrial espionage speaks to all manner of ways in which actors can provide an unfair competitive advantage by curtailing industry-wide competition through illegal means of gathering information. Economic espionage, in particular, applies to the acquisition of proprietary information or “trade secrets.” This form of espionage takes on a more targeted form in typically being engaged in by a single industry actor as against that actor’s primary competition. Economic espionage, in other words, more directly relates to specific technologies or systems that if sold on the open market would serve to cause significant economic fluctuations in fundamentally altering industry standards.

4. Discuss the impact the internet has had on the commission of transnational criminal activity, as well as the operational and jurisdictional difficulties involved in investigating and prosecuting offenders. 

Anita Allen of the University of Pennsylvania Law School has spoken to the transfixing nature of the Internet’s impact on an increase in transnational crime. Ultimately, argues Allen, it is difficult to stem this tide for two reasons: 1) because “contemporary technologies of data collection make secret, privacy-invading surveillance easy and nearly irresistible. For every technology of confidential personal communication--telephone, mobile phone, computer email--there are one or more counter-technologies of eavesdropping” and 2) because “covert surveillance conducted by amateur and professional spies still includes old-fashioned techniques of stealth, trickery and deception known a half century ago” (Allen, 2008). To this end, as suggested by Allen, the ills of technology-based crime are made more serious in light of the fact that more commonplace harm remains.

As Allen suggests, the dilemma posed by industrial spying and crime cannot be relegated to the realm of “high-tech” and “computer-based.” Increasingly, tech-savvy criminals are employing hybridized methods of espionage in order to misdirect authorities. This complicates enforcement of laws across borders as various agencies well-versed in tech-specific crime are not always able to coordinate with less technologically-focused agencies with boots on the ground. Moreover, the prosecution of such criminals is made nearly impossible by jurisdictional issues relating to, for example, the notion of “presence.” In American Jurisprudence, if a criminal actor cannot somehow be tied to the locale in which he or she commits his or her crimes, it is extremely difficult to apprehend them and subsequently acquire the jurisdiction necessary to bring them to justice. 

Further complicating this state of affairs, extradition of cyber-criminals, for example, is not always guaranteed. Many of these actors are also working for clandestine government services, which seek to shield them from prosecution by foreign governments. The all-encompassing identities of these actors render them almost immune to apprehension and prosecution and, to be sure, most of them are also “judgment proof” in that when apprehended, they are typically without the means to compensate any victims of their crimes.

References

Allen, A.L. (2007). The virtuous spy: privacy as an ethical limit. The Monist: An International Quarterly Journal of General Philosophical Inquiry, 91(1) (March, 2008).

Boni, W. & Kovacich, G.L. (2000). Netspionage -The global threat to information. Woburn, MA: Butterworth-Heinemann Publishing Co.

Kirschbaum, E. (2014) Snowden says NSA Engages in industrial espionage. Reuters.</p>