Industrial Espionage vs. Economic Espionage

Economic espionage is “whoever knowingly performs targeting or acquisition of trade secrets to knowingly benefit any foreign government, foreign instrumentality, or foreign agent” (Counterintelligence). Industrial espionage is defined as “an attempt to gain access to information about a company’s plans, products, clients or trade secrets” (Christensen, 2014). Industrial espionage is more specific than is economic espionage, although they are concerned with much of the same concept. Today, foreign intelligence criminals, services, and spies in the private sector are focused on the American industry as well as the private sector. These enemies use traditional trade crafts of intelligence against vulnerable American businesses, as well as cyber and technological tools. These criminals compromise intellectual American property and trade secrets of the government and large companies (National Insider). Foreign agents are also threats on the topic of economic and industrial espionage. These agents are any agent or other employee, or even representative, of a foreign government. The foreign instrumentality is any agency, association, legal organization, or entity that is controlled by a foreign government (Counterintelligence). As it is defined, trade secrets are all forms of financial, business, technical, scientific, economic or engineering information, and it includes plans, patterns, program devices, formulas, processes, as long as it has an economical value. They are “commonly called classified proprietary information, economic policy information, trade information, proprietary technology, or critical technology” Two things occur when trade secrets are stolen: a person knowingly targets or steals trade secrets, and this person knows that the theft of these secrets will benefit any other group or person other than the owner of said secrets. The theft of business secrets, in that they are stolen for the benefit of the thief and not the company, is known as industrial espionage (Counterintelligence). To say that economic and industrial espionage are serious problems is an understatement, although this is not a new concept for the United States government and private businesses.

America has had to overcome adversaries throughout history relating to economic or industrial espionage. These enemies avoid standing armies and battles and go after delicate American intelligence. The theft of such intelligence hurts the United States from the inside out and has the potential to hurt American business and trade. “Nazi spies during World War II tried to penetrate the secrets behind our aviation technology, just as Soviet spies in the Cold War targeted our nuclear and other military secrets” (National Insider). Economic and industrial espionage has been a problem in the United States, for businesses and companies (industrial) since the early 1970s. In 1970 the U.S. passed a law called the Uniform Trade Secrets Act (of 1970), and it was the first law of its kind to make the theft of trade secrets a criminal offense. However, the act was not completely effective at ridding the risk of blackmail of various companies and businesses, and it was not strict enough to punish the offenders (Boucher, et al, 2008). Domestic and industrial espionage is an age-old crime and continues today into the cyber era.

The perpetrators of this crime can be foreign competitors or domestic agents, so as long as they are out to steal important and valuable domestic information. The foreign competitors who seek information that will benefit them financially operate in three ways. They target and recruit insiders, those of the same national background as themselves. As well, thiey steal intelligence through bribery, cyber theft, wiretapping or dumpster diving. Lastly, they create ‘innocent’ relationships, relating to business between foreign and U.S. companies in order to gather ‘economic intelligence’ that includes trade secrets (Counterintelligence).

In 2010 the FBI charged more Chinese espionage cases than at any other point in time in the United States. Cyber theft of trade secrets is being linked to China has been reported by the media, many insiders are the ones who are transferring very dangerous pieces of U.S. information. This information goes to foreign companies and is damaging to the U.S. in both the Federal government and the private sector. “For example, a DuPont chemist in October 2010 pled guilty to stealing research from the company on organic light-emitting diodes, which the chemist intended to commercialize in China with financial help from the Chinese Government” (National Insider). Of course, China and Russia are not the only foreign countries that are engaging in espionage and the theft of sensitive economic information from the United States, as well as technology. Some of these perpetrators are not just foreign agents, but also agents that have been granted access and thus abused their power. This usually happens to aid the agent’s financial dealings or their political career (Munsey, 2013). Unfortunately, in the last fiscal year, economic espionage has cost the U.S. economy upward past $19 million (Munsey, 2013). It is difficult to prove it as espionage and is often charged as ‘theft of trade secrets.’ “Both of these charges are “covered by the Economic Espionage Act of 1996, Title 18, Sections 1831 and 1832, U.S. Code” (Munsey, 2013). Economic and industrial espionage is a serious danger to the United States, in the long run, costs the country billions, and because it is hard to prove, it can go unpunished except by small theft charges. However, there are domestic agents working on techniques to stop economic and industrial espionage.

There are several techniques that are commonly used in the theft of domestic intelligence – domestic espionage. If action is not taken against those who illegally seek delicate intelligence, information that compromises both the Federal Government and those in the private sector, there are many risks. The technology that is protected by this secret intelligence will be cultivated by those who only intend to hurt the United States. “The private sector alone lacks the resources and expertise to thwart foreign efforts to steal critical American know-how… this is in large part because counterintelligence is not a typical corporate function, even for well-trained and well-staffed security professionals” (National Insider). Americans should be confident that their government officials work their very hardest to make sure that any sign of industrial and economic espionage, but it is tough because of the increased risk with modern technology. A report, as noted in the Business of Federal Technology publication, “called for better cybersecurity framework and risk assessments that include efforts made in Congress and the White House” (Corrin, 2012). The fight against economic and industrial espionage is a very tight fit and requires the attention of every level of government because the theft of such sensitive intelligence could be detrimental.

References

Boucher, J., Grotz, J., Cassidy, B., Devivo, A. & Holt, C. (2008). Economic espionage: History. Pennsylvania State University. Retrieved from http://faculty.ist.psu.edu/bagby/432Spring08/T10/history.html.

Corrin, A. (2012). Government at high risk of economic espionage. The Business of Federal Technology. Retrieved from http://fcw.com/articles/2012/06/28/gao-cybersecurity-economic-espionage.aspx/.

Counter Intelligence. (N.d.). Economic Espionage. The Federal Bureau of Investigation. Retrieved from http://www.fbi.gov/about-us/investigate/counterintelligence/economic-espionage.

Ellis-Christensen, T. (2014). What is Industrial Espionage? Wise Geek. Retrieved from http://www.wisegeek.com/what-is-industrial-espionage.htm.

National Insider Threat Task Force. (N.d.). Economic Espionage. Office of the National Counterintelligence Executive. Retrieved from http://www.ncix.gov/issues/economic/index.php.

Munsety, C. (2013). Economic Espionage: Competing For Trade By Stealing Industrial Secrets. The Federal Bureau of Investigation. Retrieved from http://leb.fbi.gov/2013/october-november/economic-espionage-competing-for-trade-by-stealing-industrial-secrets.