Industrial Espionage versus Business Intelligence, part 1 (English)

Blog-Business-Intelligence

To gain further market penetration, and to avoid market loss, companies have to nurture their competitiveness. In order to react to market changes in a timely matter, to adapt to them, or even to influence them, one has to continuously keep track of the changes in the market and business environment, and to analyze the reasons behind them. The screening, gathering, processing and analysis of resourceful, relevant data needed for making sound business decisions is the field of business intelligence.

Before we jump to conclusions and envision James Bond, we have to clarify the concepts of business intelligence and industrial espionage. The two concepts are mixed up in many of our minds, yet there are great differences between them.

Let’s talk about industrial espionage first, to come closer to our area of interest. Famous examples quickly come to mind:

  • The 1,75 billion USD deal of selling IBM’s PC line of business to Lenovo China was on the verge of doom due to the alleged threat of industrial spying, as the transaction was opposed by the US authorities based on the grounds of national security.
  • The “spy scandal” of the century was a situation when, after having attracted an engineer of Lockheed Martin in 1997, Boeing used illegally acquired technical information to win sub-contractual position in the multi-billion USD rocket projects of the Ministry of Defence. Though the Pentagon has ended the sub-contract with Boeing, the situation is still stirring and brewing.

There are numerous ways of acquiring commercial, business and technology information via espionage, ranging from the most trivial, like memorizing, copying or taking photos of sensitive information; filtering trash or stealing laptops of the target company at trade fairs; to the operation of more advanced espionage technology like the placement of bugs (electronic interception audio devices), phone interception techniques, mini-cameras, drones, hacking into the IT system of the victim – according to the book “Economic Espionage and Industrial Spying“ of Hedieh Nasheri, professor of the University of Kent. The most active countries applying industrial espionage are ranging from Iran, China, Russia, Israel, France, the Netherlands, Japan, Canada, and the Scandinavian countries. The most threatened industries are aerospace, biotech, blue-chip, software companies, as well as logistical, chemical, pharma, semiconductor, as well as laser technology companies, states professor Nasheri based on the reports of the CIA.

According to a 2003 survey of the global auditing company PricewaterhouseCoopers, interviewing 400 leaders of companies around the globe, 46% of the firms had been victim of economic crime, every three of which were related to industrial espionage, which should give us a clue of the volume and importance of the problem.

In the next few blog articles on this topic we are going to explore this issue and present information on how to deal with threats as well as opportunities.

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