The Rise of the Company Spy with Easier Access to `Spy-Tech' Electronics and Slack Ethical Codes, United States Companies Are Graggling with a Growing Industrial Espionage Problem

By Moon Lee, | The Christian Science Monitor, July 12, 1993 | Go to article overview

The Rise of the Company Spy with Easier Access to `Spy-Tech' Electronics and Slack Ethical Codes, United States Companies Are Graggling with a Growing Industrial Espionage Problem


Moon Lee,, The Christian Science Monitor


AS more and more United States companies have had to lay off employees as a result of the poor economy, they have also been faced with an increasing number of incidents of industrial espionage.

"An unhappy or disgruntled or greedy employee ... plays an important role in getting information out of a company," says Richard Heffernan, a Connecticut-based security consultant. "You cannot get that much information out of a company without having some inside help.

"Employees may attempt to hurt their employers before being laid off or to enhance their future employment prospects by misappropriating proprietary information," he says.

About 58 percent of all incidents of industrial espionage were undertaken by current or former employees, Mr. Heffernan discovered in a survey he conducted last year with Dan Swartwood, a Washington-based security consultant. The survey, sponsored by the American Society for Industrial Security, was based on the responses of 246 US companies.

Since 1985, the number of incidents of industrial espionage reported on a monthly basis has increased 260 percent, or a combined average of 10 incidents per month, the study showed.

William Johnson, executive director of Business Espionage Controls and Countermeasures (BECCA), a nonprofit organization in Seattle, adds three reasons for the rise in the number of espionage incidents:

* With much more rapid product development and tougher international business competition, information is more important than it used to be.

* More people have easy access to "spy-tech electronics" - high-tech catalogs and retail stores that sell pocket copy machines, bugs, tiny TV cameras, phone taps, and microphones.

* Lower ethical expectations. In many companies, technical innovation is moving faster than ethical guidelines.

Peter Schweizer, author of "Friendly Spies: How America's Allies Are Using Economic Espionage to Steal Our Secrets," estimates that intellectual property theft costs US companies $100 billion annually. The Federal Bureau of Investigation cites an estimate of $24 billion.

"Attempts to misappropriate information are really quite large," Heffernan says. "It's an underestimated problem."

In his study, Heffernan found that 49 percent of the companies surveyed reported incidents of industrial espionage. Overall, companies reported 589 attempts of targeting US technology, trade secrets, and business plans. …

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