Term Paper: Corporate Espionage Defense:

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[. . .] The clients were helped through this information as they concentrated their research only to find out a duplicate method to what Quaker Oats had found out, and thus they were able to save a lot of money in research. 8

Industries at risk

Critical industries susceptible to espionage

Vendors of critical military technologies Commercial enterprises

Aeronautics Agriculture

Armaments and energetic materials Biotechnology

Chemical and biological systems Chemical

Guidance and navigation systems Computer technology*

Information systems* Fiber optics

Manufacturing and fabrication Medical devices

Marine systems Pharmaceuticals*

Sensors and lasers Robotics

Space-system technologies Telecommunications

Industries at highest risk; Data: U.S. government and Minh Luong research

Tackling the victim

There is a line of thought which says that only units in the defense industry are liable for espionage, and the small industries are thought to be safe. In truth, small industries tend to be targeted more as they have many competitors, and there are no organizations which are immune. The losses occur for technical vulnerabilities in only 20% of the cases, and in many cases the information is collected from the sales executives who would be willing to part with secrets for ensuring a sale. This enables corporate spies to collect information by posing as a potential purchaser and continuing the negotiations till they are able to collect the information they want. Most of the valuable information is given by the victim company through the casual talk of its employees, and this is when people talk about their work. This may happen during the time that they meet other workers for a few beers, and they may even be trying to impress others by talking about the sensitive matters of the company that they know. 9

More efficiency

Sometimes the claims about using illegal methods are not true, and this was found out through a CI company by a U.S. food manufacturer. It was losing market share to a rival, and the concerned executives felt that the rival was just a money-laundering company for the Mafia. The first step was to check on the rival's payment of bills and this made sure that they had enough cash, and probably profitable. The next step was to find out the local town hall and find out the floor plan of the factory of the rival, and this was easy to find. Then the floor plan was shown to an engineering expert in the food industry, and the expert soon confirmed that the rival company was running five production lines. This was more than the two lines that were being run by the client. There was also investigation of the equipment suppliers of the rival which talked about the production process of the company, and this showed clearly that the rival was simply doing a more efficient job. This was the reason why they could afford to sell at a lower price. 10

Efficiency of machines

There are many software packages that are supposed to help you stay ahead of competition, and they are labeled as intelligence software, but the recent studies suggest that they are not so. The utility of these are in helping individuals to collect and sort information on their computers. The analysis again has to be conducted by humans and the software helps in detailing the findings of the analysis, but no software is intelligent. The capacity of analysis of the software is not comparable to the capacity of the human brain, and when they were compared to a human brain doing the analysis, the software managed to get only 2.4 points out of a total of 15. 11

Concluding Remarks

It is clear that this activity is also growing like the attempts of e-terrorists for corporate espionage and hacker attacks. This is leading to increasing expenditures by the military and government agencies along with their contractors in data and network encryption through different devices to ensure the needed privacy. 12 This is essential and we have seen that this industry of espionage is growing quite fast and may prove to be a threat to other industries at some time. The discussion on the subject has started and the important players in the field have now begun to take the matter seriously, but this matter can only be properly tackled when the employees themselves become serious, and this has been mentioned clearly.

The nature of the matter is commercial, and as competition increases, these activities are also expected to grow along with it. Some have tried to give the idea that the major source of espionage in industry is the foreign governments, but this is not true. For the entire defense industry, only 22% is attributable to foreign governments sponsored efforts, whereas 58% of the practice of industrial espionage is by the different corporations and individuals. This is the information given in FBI's 2000 Annual Report to Congress on Foreign Economic Collection and Industrial Espionage. 13

There are thus no limits to care, and the more careful one becomes in the future, the better it is to be likely for the secrets of the business. The time span of profitability for businesses is rapidly shortening due to increased competition, and this is likely to continue. Leakages of information are likely to make them shorter even more, and thus lead to non-recovery of investment in the business by the entrepreneurs.

End Notes:

Bass, Alison. Defense against the Dark Arts. June, 2001. Retrieved at http://www.darwinmag.com/read/060101/defense.html. Accessed on 29 June, 2004

Rosner, Bob. HR Should Get a Clue: Corporate Spying is Real - Interview. April, 2001. Retrieved at http://articles.findarticles.com/p/articles/mi_m0FXS/is_4_80/ai_73553659. Accessed on 29 June, 2004

Corporate Espionage: A Real Threat. Retrieved at http://www.computercops.biz/article3602.html. Accessed on 29 June, 2004

Bass. Defense against the Dark Arts.

Winkler, Ira. Corporate Espionage. Inc. Magazine. June, 1997. Retrieved at http://www.inc.com/magazine/19970601/1257.html. Accessed on 29 June, 2004

Bass. Defense against the Dark Arts.

Chopra, Anil. Corporate Espionage. May 05, 2003. Retrieved at http://www.pcquest.com/content/topstories/spy/103050501.asp. Accessed on 29 June, 2004

Bass. Defense against the Dark Arts.

Winkler. Corporate Espionage.

10 Bass. Defense against the Dark Arts.

11 Bass, Alison. Most CI Software Flunks the Fuld Test. June, 2001. Retrieved at http://www.darwinmag.com/read/060101/defense_sidebar_2.html. Accessed on 29

12 Increase in Hackers, Corporate Espionage Propelling Data and Network Encryption

Market, Says Frost & Sullivan. July 3, 2001. Business Wire. Retrieved at http://www.businesswire.com/webbox/bw.070301/211840047.htm Accessed on 29

13 Stanton, John. Industrial Espionage Becoming 'Big Business'. National Defense

Magazine. July 2001 Retrieved at http://www.nationaldefensemagazine.org/article.cfm?Id=535. Accessed… [END OF PREVIEW]

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