Homework Responses Wk 1

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Criminalized under the Economic Espionage Act of 1996, industrial espionage involves a party knowingly misappropriating trade secrets related to a product produced for economic gain. Along with this misappropriation, there will be the knowledge that these actions will harm the owner of the trade secret.

Economic espionage will involve unauthorized misappropriation at the state level and will, primarily, be conducted by government intelligence services for that entities’ benefit. While both acts involve illegal and unauthorized acts of misappropriation, there are differences in scope and approach. Competition, and the hopes of financial benefit will typically be the primary motive that fuels the prevalence of industrial espionage. However, economic espionage may include motivations beyond mere profit, as it may be conducted to influence sensitive economic policy decisions[1]. Not only may it bring the potential for massive monetary losses at the national level, but also may present impacts to national security.

When taking the risk formula into account, the threat presented in this scenario is the criminal acts of misappropriation. The vulnerability to this threat will include an examination of an organization or business entities’ awareness of the threat, at least as a starting point. The fact remains that industrial and economic espionage is occurring at staggering rates. In fact, U.S. companies are estimated to be deprived of $300 billion annually due to these criminal acts. Indeed, this makes the threat exceptionally real and decidedly consequential to an organization’s health and sustainability.

But how does that work in a standard risk formula? As an example, industry leaders and insiders are typically required to travel a great deal. This means hotels, resorts, conference venues and thus, a substantial number of opportunities for threat actors to misappropriate trade data for their own benefit. The means to achieve these acts of theft could be everything from breaking a hotel safe to a friendly chat at a coffee corner.

There is probably little that can be done about the threats presented, however the vulnerabilities to these threats can and should be mitigated as a top business priority, considering the consequences. Unfortunately, many organizations suffering from silo syndrome may not dedicate the resources necessary to implement a broader scope of countermeasures (Wimmer B., page xv). Any actions or in-actions that increase the measure of vulnerability, will factor heavily into the determination of risk. Reducing vulnerability while implementing countermeasures works to lower the risk factor.

Vulnerabilities to espionage need not only apply to industry insiders. It may be incumbent on all U.S. citizens to adhere to some basic principles of information and data security, especially when abroad. Misappropriation from a solo traveler on vacation may alone not cause significant consequences, however, when combined with other threads of data, may produce an image that threats actors can capitalize from.

References:

Wimmer, Bruce. (2015). Business Espionage: Risk, Threats, and Countermeasures. Elsevier Science and Technology. ISBN: 9780124200548