Industrial espionage

SUMMARY
BRIEF HISTORY OF THE ESPIONAGE
The search and study of the markets its about reunite the most information possible. Espionage starts when
this information has to do with the competence and when it isn't available. It is true that espionage is not new,
it is also a very antique technique, even in the time of the Indians where they would go to spy to another tribe
to see how the other one made fire, for example now a day s is very common and easier.
No longer spying means the CIA vs. KGB now a days there's corporate espionage and it also means French
intelligence against IBM or even Mitsubishi against Ford Motor Company. The espionage is being carried out
around the world and U.S. companies are prime targets, not to mention easy ones.
METHODS
In these days the industrial spy operates in 2 ways: in group or by it self. The second one the spy chooses its
victim and then it start to explore the operational objective, then he chooses the information, the objective and
the secret that he wants to know about the other person or company, so then he can go and negotiate it.
A good spy always start working like a journalist it is known that in all the countries all the security experts
fear to the journalists because they ask too much and they have the ability to discover and publish want should
remain in secret.
BE AWARE OF ESPIONAGE:
Now a day's coincidence about rival products, lounging dates, sales and strategies are more than coincidences.
The industrial espionage has generalized and modern technology in communications makes it possible and
cheaper.
A simple laser focused to a window allows recovering the vibes almost unpredictable that the voices generate
in the glass. Obviously this is not a cheap system, because it implies complicated equipment that is sound
regenerators. For industrial spies it is cheaper to use a little micro−transmiter.
The new technology in electronic microscopy circuits is more helpful day by day in the espionage labor. Now
it exists tiny microphones transmitters of the size of a top of a match that can be hidden in a pen, in a book, in
a desk everywhere.
Special investigators firm in New York City was able to detect that a laundry worker was putting devices in
the jackets of a executive, so the other firm could hear the strategic plans of it's competitor.
The more little the micro−transmitter is the less is the capacity of it's energy force, and less capacity of
operation. From these is why spies prefer parasitic transmitters. This class of transmitters uses a source of
energy that comes from the person where the transmitter is on.
The famous firm CCS from New York City, specializes in preventing industrial espionage advices it's clients
to be very careful when receiving a gift. Of any kind apparatus that has wires and has to be connected. These
types of apparatus are the more common places to put in microphones due to the frequent flow of energy to
operate for a long time.
HOW DOES A SYSTEM OF EPIONAGE OPERATES
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When a spy has filtered in the company in a place near the microphone all it needs is a little receptor whit
audio to monitor the conversations. If the spy wishes to listen comfortably from it's office the conversations
that take place, far away, it's required to put a transmitter in a near place the microphone is, so this will
recover the signals and transmit them amplified.
The more perfectionist of this equipment cost about U$6000 it has a lot tiny microphones that can transmit for
20 hours continuously and a transmitter near a suitcase that can be held in a 300 mts. radius from the
microphone. The system is completed with a receptor and a recorder that can be some kmts. away.
Other example of a machine that is useful for espionage is a kind of a gun that is able to shot little transmitters
that goes into the wall of an office and starts to transmit. This type of machine is especially useful when
somebody who takes a lot of precautions so nobody hears what he talks, goes to a park or something similar to
talk about confidential information. He wont suspect that other person will follow him and shot the
microphones to a tree or something that's close to him
CREEPY NUMBERS
A publication said that experts in security said that the numbers of cases of industrial espionage in the United
States in the last five years can be between 50000 and 100000 in the USA laws are very strict concerning with
the prohibition of equipment for espionage but it's fabrication legal, in this country the 6 companies that are
specialized in producing mcro−transmitors sell about.14000 equipment every year.
The great number of cases in espionage has given birth to a service: the inspection of offices to detect possible
hidden microphone. One of this kind of companies is golden liddy and associates, created in 1981 by Thomas
Ferraro, it has offices in 6 cities of the U and its operations glue them benefits of about 12 million dollars a
year.
CCS Communications Company was founded a little less than 7 years ago, and its operations are about 35
million dollars a year a year. It has sold its bionic suitcase in over 60 countries. This suitcase has an
equipment to detect transmitters, cameras, phone, interceptor's intruders and recording machines, all of these
in only 1 suitcase.
A CIA ex−investigator says that in the US every year hundreds of millions of dollars are invested in industrial
espionage.
In Japan the underlying philosophy is, why spend ten years and U$ 1 billion on research and development
when you can bribe a competitor's engineer for U$ 1 million and get the same?
The potential looses for all American industry due to espionage could amount as much as U$ 63 billion,
according to study by the American society for industrial security.
SOME PRECAUTIONS
Right Know the most important thing in the business world is the information that you have as a company and
the I & D that you can find, for all this reasons the industrial espionage plays an important roll in this
environment, so you have to paid attention on some precautions if you have confidential data that has a
relation with your business, for example:
• Do not leave information on strangers hands when you are absent from your office, when you are traveling
or at the end of the day
• Talk about confidential information in private not in public areas and destroy it before throwing away.
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INDUSTRIAL ESPIONAGE IN US
On the last years the US industry has increased its levels of international competition by foreign traders that
all ready exist around the business world and this make them more vulnerable because their confidential data
is going into espionage hands, even thought every company has secrets since many years ago is right now
when there are industrial espionage because the size for business is global.
On 1996 ES government tried to make a solution so they create the Economic Espionage Act. Which helps to
keep out the corporate spying, concentrating on using legal and public information from the competitors. But
on 2002 there are so many international cases that cannot be resolved in consequence many US companies
have loosed much money, they loosed around $45 millions from pilfered trade secrets. Also many
professionals on espionage estimate al least 12 trading partners (countries of the Europe Union and Israel,
Japan, China, Taiwan and Korea) of US firms make a espionage system, frequently throw their own
companies. Besides, after September 11 the industrial espionage has increased, especially on the United
States, because companies struggle more for market in time of recession.
On the other hand FBI has many personnel that are working on industrial (economic) espionage, but the most
important problem they have is that spies are getting confidential information before the product is developed
so companies are having high looses.
Most of the times many managers think that they do not have anything to worry about, so they do not pay
attention on many confidential business activities that play an important roll on the company, this is their
major threat so they have to deal with themselves.
PENALTY
The penalties for those caught spying can be high. A conviction under the computer misuse act can carry a
five−year prison sentence. The U.S. has specific legislation for trying industrial spies − the economic
espionage act. While there have been proposals for a similar law in the U.K, nothing concrete has been put
before parliament.
ESSAY
As international business students we have to pay attention on this subject because this affects the entire
business world, where we are going to work on in the future. Through out the history, people think that is
enough to invent and manufacture an excellent product to be commercialized, but we can see how companies
are struggling for the market on a disloyal way, for this reason in our opinion, each company has to care about
the industrial or economic espionage to survive in this hard environment.
As we can see, many countries and companies have developed technological systems that allows them to spy
and get any kind of information, it doesn't matter if is only a simple paper, a draft document, a computer
penetration or a copy of a final report of a new product, they can get what ever they want, because as persons
they do not have hesitations to do any kind of activity, legal or illegal, to get what they want.
We realized that the companies are making the industrial espionage easier because each firm tries to be
competitive on the market, so they create many sophisticate products that makes it easier, and in this way,
makes spies spy easier too. For example the internet invention brings many profitable consequences to all of
us, children can study easily because they can get any kind of information on the web, companies can shorten
distances with their wholesalers and consumers, and each country can open its doors to the world, but this
invention brings us many other bad consequences because through out the web each person and each company
looses its own privacy, hackers and spies can go into any computer and system and take what they want.
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Nowadays, industrial espionage is increasing and forcing companies to find new ways to keep information
safe and in very private places. We can see that recently, companies with a very high income are trying to
safeguard all data with an especial agency like the CCS in New York City. The competitor is allways trying to
search for important information, so they can know the strainghts and weaknesess of others, the strategies and
many other important information about the companythis is why products, launging dates and similar things
like that go out to the market very alike.
Despite this problem, companies should educate all employees and independent contractors not to spread all
information about technical or commercial issues to anyone outside the company (except in very needed
cases). In our opinion we think this must applied to all industries no matter how big they are in order to avoid
compettitors knowing your information. For instance, when a worker has a social conversation with others, he
must be aware not to reveal information such as production problems, customers and suppliers names, quality
problems, personnel decisions and some other specific information of the company.
One of the issues of our reserch tell us that industrial espionage is illegal, coercive and clandestine, and it is
used to get into the economic intelligence of others and in the same way gain economic advantage. We have
noticed that is very important in the last years to have better information than the competition, specially since
business decisions are subject to time pressure.
In the information age, knowledge is power. This sentence makes us think that knowledge, in our field, is the
most relevant factor to succed as an International Negociators. Furthermore, objectives such as strategic
knowing and experience in the business world are the most impotant ways to be competitive in the
international market, and the actual world because with knowledge you can do whatever you want.
We found that, the majority of the international, national and local companies aren't making the industrial
espionage task, for instance they bribe somebody else (called spy) to work alone and get the competitor
essential information. Then the spy can sell this information to the company at a very high price, and then the
company can use it on its own benefit.
One example of industrial espionage we found and it really fills all the espectatives is the case of the Recon
Optical, which was signed for a 4−year, $40 million contract with a foreign government to design an airborne
surveillance camera. This foreign government had to send three airforce officers, during the continual cost
disputes and other problems, Recon canceled the contract and dismissed the three officers. Then, these
officers were caught with confidential information in boxes. The reason was clear, they were stealing
information to give it to their government and in this way the government could build thesame system without
Reacon Optical services.
The last example wich is from the reality, shows us that each company can not trust on anyone, no matter if
the clients or consumers are closer to it. Also you have to take care of all your information from everybody,
otherwise, your private data will spread over all of your competitors. Before doing any business we consider
that every business man has to be careful at the time to close a contract with someone. In addition, its better if
you verify strictly what the other person is ( what they do, look for their businesess past and any kind of
information that you can get about him).
To avoid all of this industrial espionage activities we have some pracautions that a company have to consider
such as:
1. If your company (no matter how small or how big) does not have a structured business intelligence effort,
start one. If you do have one, make sure it's more than simple information gathering.
2. Your personal information gathering should be habitual and concentrated. It should include regular reviews
of news sites, industry or professional sources, and competitive sites. You should be able to gather
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information quickly about a prospect or competitor if you need to.
It is even more difficult for companies when spies, such as hackers, are located in other countries different
where the company is. This fact affect in a bad way to the company because, if the governmet discover the
hacker they can not do anything legally, because they are not able to impose rules to somebody who is in
other country.
An example of this problem is the Microsoft case, which their information was stolen from their database in
2000 (hugely embarrassing for such as tecnological company). Hackers entered to the system by emailing a
software called QAZ Trojan to the Microsoft computer. This looked like an ordinarian attchment but in fact
conteined a hidden code that opens a back door into the system. The hackers, who it appears were working out
of St Petersburg in Russia, had their way in. They were never caught.
Legal methods such as Freedom of Information Act requests are also a vulnerable point for US corporations.
When Mitsubishi decided in 1986 to enter the space industry it began an intensive effort to gather information.
FOIA requests became a major resource because they allowed the company to get information from NASA. In
our personal opinion we think that is no way legal, what's mine is, mine is, and noboby is able to keep my
information in a legal or non legal way, each person is the owner of your information.
Another problem facing the prosecution of cases dealing with economic espionage is that the confidential
information stolen is commonly made public during the hearing. "Proprietary economic information derives
value from its confidentiality; if this is lost during legal proceedings, then the value of the information is
greatly lessened,"
In adition we also find that many nations and their goverment are very worried about it, for example in the
United State the FBI are creating a new program where you can fight with the spies using a
Counterintelligence, and Counterterrorism Awareness program, this means that businessmen like us can
support their activities on this kind of prgrams to avoid the industrial espies and in this way become into a
excellent company with real competitors not with spy competitors.
As we found almost in every where we searched there are a lot of companies that offer espionage services, but
this companies are very clandestine, because if they were found they could be charged and left out of business
due that this is not well seen by the governments of the world.
There are also a lot of companies that work to stop espionage, this are called counterintelligence companies
that help to put systems in other companies so nobody will enter in their systems.Since the end of the cold war
we have seen a growth worldwide of the industrial espionage in private companies offering a variety of
business intelligence services.
All this topics show us how comapnies can be doubled faced depending on the circunstances, for example if a
company is having a bad time their managers would prefer to be a disloyal competitors to get some important
information about the others, but if they are having a good time they will search a excellent way to avoid the
spies. Eventough we realize that this two points are logical, because in the business world each company are
trying to be the best one (most of the time no matter how).
We have found some espionage agencies and technology such as:
The Cia Is the Central Intelligence Agency in the USA and it's responsible for obtaining and analyzing
information about foreign governments, corporations, and individuals, and reporting such information to the
various branches of the US government.
Another espionage agency is The KGB which is the Komitet Gosudarstvennoi Bezopasnosti, or The
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Committee for State Security was the name of the main Soviet external security and intelligence agency. Its
tasks were external espionage, counter−espionage, liquidation of anti−Soviet and counter−revolutionary
formations in the USSR and guarding the leaders of the party and state.
As we can see through the history there have been some organizations that are already stand and some that has
ended, and a lot of technology which is improving every day. With all of this you can realize how the
espionage can be called an industry, even tough it's illegal.
Some tools that spies can use to get what they want are Cryptography, Steganography and Echelon, as we can
see this methods consist in spying the information hidden, so they apply this methods without the knowledge
of the person who is being spied. Therefore, the person who is spying will aquire the knowledge and
experience. So we think that all this agencies can use all this capacitive and knowledge creating a competitive
company that work in the legal business world with its own investigations and data.
CONCLUSIONS
Industrial espionage is the theft of patents and is a part of intelligence activity, which is also concerned with
analysis of diplomatic reports, newspapers, periodicals, technical publications, commercial statistics, and
radio and television broadcasts. In the last fifty years espionage activity has been greatly supplemented by
technological advances, especially in the areas of radio signal interception and high−altitude photography.
Surveillance with high−technology equipment on the ground or from high−altitude planes and satellites has
become an important espionage technique. Code making and code breaking have become computerized and
very effective. The threat of foreign espionage is used as an excuse for internal suppression and the
suspension of civil rights in many countries. Espionage is a very important part of counterinsurgency.
The defensive side of intelligence activity, for example, preventing another nation from gaining such
information, is known as counterespionage. Under international law, intelligence activities are not illegal;
however, every nation has laws against espionage conducted against it. processes from business firms is not
properly espionage at all.
The lesson is clear: If you don't want to be the next victim, be aware of the danger, and be sure to design,
implement and update a comprehensive security program that addresses the threat from all angles.
BIBLIOGRAPHY
BARRAL, Jean Y LANGELAAN, George. Espionaje Industrial. By Ayma S.A. 1970.
http://tims.geo.tudelft.nl/News/BULLET64.HTM
http://www.fortunecity.com/tattooine/leiber/50/dgecheln.htm
http://investigation.be/english/industrial_spionage.htm
http://www.the−week.com/98apr12/biz1.htm
http://www.impulse.net/~sate/industr.html
http://www.impulse.net/~sate/frenchus.html
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