In Depth

Industrial Espionage: Secrets Stolen, Fortunes Lost

How industrial espionage and intellectual property theft destroy businesses and endanger the global economy.

By Richard Power and Christopher Burgess

Page 7

Secrets are the magic ingredient of power. When state secrets-i.e., political and military secrets-are stolen, governments fall and wars are lost, people are disgraced and people die. When trade secrets, such as scientific or engineering secrets, are stolen, corporations lose their competitive edge, small entities cease to exist, and whole sectors of the economy weaken and fall behind in the global marketplace; people lose their livelihood and their children's futures.

In other words, the United States could win the war on terrorism, overcome the challenges of global warming, balance the federal budget, strengthen the United Nations, end global armed conflict and restore our edge in science and engineering, and still end up behind China, India, Japan, Russia or Brazil in several vital sectors of the economy, and at a serious, if not fatal, disadvantage within the global marketplace.

The threats of economic espionage, intellectual property theft, counterfeiting and piracy are global, dangerous and increasingly common.

It is within your power to decide for yourself if your enterprise is going to be a hard target or soft target. The time for action is now. You can be prepared.

Preparation Tips

Remember, it is important to invest in protective measures commensurate to the value of the asset being protected. Here are some recommendations for a comprehensive program:

Organization

Where security reports within an organization is perhaps the most vital issue of all. Consider appointing a chief security officer, who reports to either the chief executive office or the chief financial officer. This person should hold the reins of personnel security, physical security and information security, and should not be a stranger to the board room.

Awareness and Education

Educate your workforce on an ongoing basis about the threats of economic espionage, intellectual property theft, counterfeiting and piracy. Help them understand your expectation that they will protect the enterprise's intellectual property and, by extension, their own livelihood. Provide general education for the entire workforce, and specialized education for executives, managers, technical personnel, etc.

Personnel Security

Implement a "Personnel Security" program that includes both background investigations and termination procedures. You need policies that establish checks and balances, and you need to enforce them. Know the people you are going to hire. Don't lose touch with them while they work for you. Consciously manage the termination process if and when they leave the enterprise.

Information Security

Recruit certified information security professionals (e.g., CISSP, CISM, etc.) Adopt best practices, and establish a baseline. Utilize appropriate information security technologies, such as firewalls, intrusion detection, encryption, strong authentication devices, etc. Pay attention to data retention and data destruction as well as data access.