Espionage Is a Threat to National Security and the Economy

Espionage is when governments and businesses snoop on each other to steal top secret information. A study by security vendor Securonix identifies US firms as the biggest victims of industrial espionage.

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Some intelligence officers operate under official cover, such as a diplomat in an embassy. Others operate without such protection and must create convincing covers—a businessperson, a student.

Intelligence Gathering

A country gathers intelligence for the purpose of protecting its citizens and advancing its interests. Its operatives spy on foreign governments, companies and individuals. Clandestine collection methods supply the dramatic and romantic elements of spy fiction. They also underpin much of the work done by intelligence agencies today.

Spies gather information by observing or contacting their targets covertly. They may listen to radio communications (signals intelligence, SIGINT) or intercept phone calls and emails (IMINT). They can even track the movements of vehicles and boats through overhead surveillance or read chemical and acoustic signatures from objects.

Intelligence sleuths use disguises to conceal their identities and meet with their targets undercover, often for long periods of time. Agents are recruited through money, ideology or coercion to pass information to their handlers. They risk their lives to collect intelligence, and they sometimes defect to the enemy or betray their allies. Saboteur missions against economic targets are treated as espionage.

A large proportion of intelligence, however, comes from overt sources not requiring any covert activities. These “open source” sources include radio and television, newspapers, journals and commercial databases. They are augmented by satellites that provide imagery, communications and acoustic signatures from great distances. In fact, experts believe that open-source intelligence now provides more than four-fifths of the input to most intelligence systems.

Corporate Espionage

The theft of proprietary information like trade secrets is a common form of corporate espionage. This can include everything from technical drawings of new products to the ingredients in a product. These actions are often the work of third-party contractors, but disgruntled employees who feel wronged by their employers can also be guilty of such conduct.

Companies can take steps to prevent such attacks, but it’s important to remember that not all corporate espionage is perpetrated by hostile foreign governments. Even in the United States, disgruntled ex-employees and contractors are a threat to sensitive data.

Economic or industrial espionage, as the name suggests, involves businesses gathering knowledge for commercial or financial gain. This is a much broader scope than military espionage, which involves foreign governments targeting private businesses in their countries.

This form of espionage can happen anywhere, and companies must be on guard for the threat. For example, a USB stick left in a hallway can be picked up and inserted into a company computer, and that could lead to a massive data breach. This type of attack is easier to perform than hacking, and it can be hard for companies to detect. Companies can prevent industrial espionage by requiring background checks of all employees and implementing strict cybersecurity practices. The 2021 case of Yu Bingbing, who was convicted of taking corporate secrets from her employer GlaxoSmithKline PLC, illustrates how serious the consequences can be when an employee steals information.

Economic Espionage

This is another form of espionage that involves stealing valuable proprietary information or intellectual property from private businesses or other organizations for the purpose of achieving financial gain. This type of espionage is often referred to as industrial espionage and can include attempts to sabotage companies, as well.

The government takes these types of crimes very seriously. In 1996, President Clinton signed the Economic Espionage Act (EEA), which criminalizes the theft of trade secrets that benefits a foreign government, foreign instrumentality or a foreign agent. The penalties for violating this act are stiff and can result in substantial prison time, fines and restitution.

While espionage is commonly associated with technology-heavy industries, it can occur in any industry, including fashion, food and entertainment. Regardless of the industry, spies may break into company facilities and steal files, pick through trash cans or hack into work computers to get information.

The most common perpetrators of espionage are foreign governments, though companies can also engage in this activity to achieve competitive advantages. For example, it can take years to bring a new product to market, and a competitor may be able to steal vital information from a company before that happens. This can be particularly problematic in countries with state-owned enterprises, where the government is pursuing its own financial goals through commercial espionage.

Counterespionage

Espionage poses a clear threat to national security and the economy of the United States. Nevertheless, the risks of government action to reduce or eliminate those threats must be weighed against their costs.

One cost of counterespionage is the time required to develop a response to a potential espionage case. The process of identifying the source of an attempted espionage and discrediting that person or service takes effort and resources, which must be considered in evaluating the need for more action against the threat.

Other costs include those imposed by the act of protecting classified information and intelligence personnel against harm and ensuring that the proper channels for delivering that information are used. For example, military and security organizations may monitor less secure communication systems such as commercial telephones and general Internet connections to detect inappropriate communications and to provide education on the need for more secure means of communication.

Foreign governments and criminals are increasingly focused on the private sector in the United States as a way to gain access to the intellectual property, technological advances, and trade secrets that are critical to the country’s economic well being and long-term prosperity. In fact, a report from the U.S. Citizenship and Immigration Services’ ombudsman warned that the Optional Practical Training program for science, technology, engineering, and mathematics (STEM) students could be exploited by foreign intelligence services to conduct economic espionage.