Problem

Industrial espionage

Other Names:
Clandestine market research
Organizational intelligence
Misappropriation of commercial information
Economic espionage
Business intelligence
Nature:
Industrial espionage aims at the covert gathering of information on rival enterprises' technological developments and secret processes. It may also include stealing marketing plans, data bases containing distributors names and distribution logistics, financial statements, overall corporate long-range planning including business models and forecasts, and computer programmes and software for management systems. Industrial spies usually operate within the jurisdiction of their employers marketing or market research departments, except technical specialists whose liaison is with industrial research.
Incidence:
In the UK in 1989 it was estimated that industrial espionage cost companies £5 million per year. A higher estimate suggests £5 million per incident, with some 2,500 UK companies spying on their competitors. As an indication over 100,000 bugging devices are sold annually in the UK. In 1993, the USA asserted that the French (and other allied countries) have been spying on USA military contractors to obtain trade advantages, even though an agreement between the intelligence chiefs of both countries ban poaching each others commercial secrets. "Business intelligence" has however become an industry in its own right with its own private companies (for example: German 600, USA 250, France 6).
Claim:
1. Where the survival of a company in highly competitive markets is concerned it is inevitable that traditional marketing intelligence/research will tend to move towards covert industrial espionage.

2. Fraud is no longer the misappropriation of money or stock. It has become the misappropriation of information, because most businesses are information based.

Counter Claim:
1. As with political and military espionage a large part of industrial espionage simply consists in analysing publicly available, or at any rate non-secret, information. Computer enhanced evaluation of competitors' finances, marketing and engineering or design style evolution, plus technical forecasting of industry and market share data, allows a great deal to be described that appears as inside information, and hence the results of espionage, when in fact it is highly developed comparative technical and marketing research.

2. The future of security of world powers lies in business intelligence and for this reason economic intelligence has become a concern of government security services in the post Cold War period.

Related Problems:
Theft
Military espionage
Problem Type:
D: Detailed problems
Date of last update
01.01.2000 – 00:00 CET