The threat of state-sponsored industrial espionage

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By Massimo Pallegrino / Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics

Beijing denies it. Moscow refuses to comment. But,

according to Robert Bryant, former US national counterintelligence

executive, the governments of both

countries are behind efforts to clandestinely acquire

industrial secrets, particularly in the realm of cyberspace.

In Europe this warning gained little traction.

Few governments have complained publicly about

such theft. Many businesses preferred to downplay

the problem for fear of retaliation. However, this problem

can no longer be ignored, and institutions across

Europe have finally woken up to the implications of

industrial espionage for their national security.

The General Intelligence and Security Service of the

Netherlands (AIVD), for example, publicly acknowledged

in its 2013 annual report that industrial espionage

is a major threat to the economy and that

protecting intellectual property and trade secrets is a

matter of national security. While traditional national

security intelligence gathering was focused on hard

security matters, over the past 20 years national and

economic security have become indivisible.

Motives and players

Though industrial espionage is as old as industry itself,

it has evolved in recent years. First, it has morphed

from a small to a larger-scale business. The plethora

of information moving over IT networks, the ease of

access to cyberspace, and the difficulties in attributing

malicious attacks have all contributed to this shift.

The second major change is the growing involvement

of state actors in targeting non-military technology.

Against this new background, Russia and especially

China are using industrial espionage to tip the competitive

balance in their favour.

There are significant advantages to stealing innovations

rather than developing them. Not only can stolen

classified material contribute to the development

of military and dual-use capabilities, but the money

saved can also be reallocated to socio-economic

projects.

Motives for state involvement in industrial espionage

vary from one country to another. In China, intellectual

property rights (IPRs) are not as fiercely defended as

elsewhere. Moreover, both the government and businesses

often stand to benefit from such actions given

that there is very little distinction (if any) between the

private and the public sectors. And although China is

gradually shifting from being an ‘innovation follower’

to an ‘innovation leader’, the slowdown in economic

growth is making this process more difficult to fund.

Consequently, the clandestine acquisition of necessary

technology is all the more tempting. This threat is

particularly acute for European companies delivering

high-tech goods, which often resort to offshore production

and transfer part of their scientific know-how

to Chinese partners.

Russian intelligence agencies are in this ‘business’,

too. They operate under a public federal law ‘to promote

the country’s economic development.....

The rest of the article comes from a pdf. Click link http://www.iss.europa.eu/uploads/media/Alert_26_Industrial_espionage.pdf

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European Union Institute Security Studies June 2015 1

© EU Institute for Security Studies, 2015. | QN-AL-15-026-2A-N | ISBN 978-92-9198-321-6 | ISSN 2315-1129 | DOI 10.2815/184955

P/SIPA

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European Union Institute for Security Studies June 2015 1

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