Economic Espionage

America's adversaries throughout history have routinely taken their competitive efforts beyond the battlefield. They frequently avoid using standing armies, shirk traditional spy circles, and go after the heart of what drives American prosperity and fuels American might. Nazi spies during World War II tried to penetrate the secrets behind our aviation technology, just as Soviet spies in the Cold War targeted our nuclear and other military secrets.

Today, foreign intelligence services, criminals, and private sector spies are focused on American industry and the private sector. These adversaries use traditional intelligence tradecraft against vulnerable American companies, and they increasingly view the cyber environment—where nearly all important business and technology information now resides—as a fast, efficient, and safe way to penetrate the foundations of our economy. Their efforts compromise intellectual property, trade secrets, and technological developments that are critical to national security. Espionage against the private sector increases the danger to long-term U.S. prosperity.

Without corrective action that mobilizes the expertise of both the Federal Government and the private sector, the technologies cultivated by American minds and within American universities are at risk of becoming the plunder of competing nations at the expense of long-term U.S. security.

The private sector alone lacks the resources and expertise to thwart foreign efforts to steal critical American know-how. This is in large part because counterintelligence is not a typical corporate function, even for well-trained and well–staffed security professionals.

Counterintelligence is a challenge for corporations for two reasons. Cost is the first reason. CI measures absorb company resources that would otherwise be used for growth. The second CI challenge is tied to the nature of public corporations. American companies are driven into developing markets by shareholders, growth ambitions, and the desire to beat Wall Street's quarterly earnings expectations. The requirement to move quickly and unabashedly leaves American companies vulnerable as they flock into spy-rich developing nations. China and Russia are our most aggressive and capable adversaries using economic espionage.

  • In 2010, the FBI prosecuted more Chinese espionage cases than at any time in our nation's history. Although cyber intrusions linked to China have received considerable media attention, some of the most damaging transfers of US technologies to foreign entities have been conducted by insiders. For example, a DuPont chemist in October 2010 pled guilty to stealing research from the company on organic light-emitting diodes, which the chemist intended to commercialize in China with financial help from the Chinese Government.

  • Similarly, the unmasking of the network of 10 Russian "illegals" implanted on American soil indicated that these spies had been tasked to collect on economic as well as political and military issues.

China and Russia are not the only perpetrators of espionage against sensitive US economic information and technology. Some US allies abuse the access they have been granted to try to clandestinely collect critical information that they can use for their own economic or political advantage.

Relevant Reports, Briefings & Reading Material: