The Paradox of Fiction and the Ironies of Economic Espionage
The United States has been a target of economic espionage from several countries, including those considered as allies or friends. The FBI estimates that these foreign competitors intentionally seek out economic intelligence in advanced technologies and thriving industries, resulting in the loss of billions of U.S. dollars each year. As a result, the FBI has declared economic espionage a top priority, second only to terrorism.
Economic Espionage by Friends
In addition to France, Great Britain, Japan, and South Korea, other allied nations have been engaged in economic espionage against the United States on a regular basis. For example, Israel, despite being a significant beneficiary of US foreign aid, has conducted economic espionage against the US since its inception in 1948. With the aid of American jews, Israel’s Office of Special Tasks, known as LAKAM, established in 1957 by the Israeli Defense Ministry, had led a deliberate effort to gather scientific and technical information for its intelligence communities and defence industries. This was in contravention of the 1951 agreement between the United States and Israel not to engage in spying against each other.
In 1986, three Israeli air force officers were caught stealing thousands of pages of documents related to Recon Opticals’ proprietary information. Recon Opticals produced state-of-the-art aerial surveillance equipment for the US Department of Defense. This stolen technology formed the foundation for OFEK 3, Israel’s first reconnaissance satellite. Despite receiving $3 million in damages as ordered by an arbitration panel against Israel, Recon Opticals suffered significant damages and was on the brink of bankruptcy.
The Republic of Korea (ROK), another allied country, has long recognized the crucial role of science and technology in its economic progress. From the 1990s, it has actively pursued the United States to maintain its superiority by acquiring and pilfering technology that can benefit its industries. The ROK employs several organizations, including the National Intelligence Service (NIS) and its precursors, to gather political, technical, and economic intelligence connected to trade, science, and technology sectors. The ROK’s economic intelligence operations are motivated by three factors: ensuring continued access to advanced technologies for sustained economic growth, supporting its domestic arms industry, and broader political considerations that align with its foreign policy objectives. Besides the United States, ROK has also targeted Japan, a friendly nation, where South Korean agents have been the most aggressive in their intelligence collection operations.
After all, Espionage is an Old Profession
The surreptitious acquisition of manufacturing and other business secrets has been a common practice for thousands of years. For example, ancient China guarded its silk manufacturing secrets so closely that disclosing them was punishable by death. France allegedly stole the secret of making porcelain from China in the 18th century, when a French Jesuit priest sent the manufacturing secrets via letters back to his country. In a similar vein, a British agent is said to have stolen the secrets of porcelain-making from France, and upon returning to Britain, developed porcelain-making to such a high standard that the country “captured a significant share of the world’s porcelain-making market.”
Technical Prowess and Leadership
The foundation of a country’s leadership, particularly that of the United States, is built upon its economic and technological capabilities which are largely attributed to private firms. As a result, the theft of intellectual and industrial information poses a significant threat to the producing country’s economy. In 1996, in an effort to prevent the loss of proprietary information, the United States Congress passed the Economic Espionage Act. Despite its implementation, “the US finds itself in the middle of an epidemic of economic espionage” due to the prevalence of trade theft. Several reasons have been put forth as to why the act has not been effective, including difficulty in proving economic espionage, lenient sentences, and the private industry’s lack of willingness to collaborate with law enforcement.
Some reasons as to why the nations such as ROK and Israel have engaged in economic espionage against the United States could be due to their lack of a developed technical infrastructure after World War II, which the United States possessed. Additionally, unlike the United States, countries such as India, Japan, and some European countries that have targeted the U.S. for economic espionage purposes did not have strong enough economies to develop their own proprietary research and development capabilities. Given its technical development and enormous investments in research and development, the United States has always been a target of espionage and has not felt the need to target other economies for their technological prowess.
Conclusion
While the U.S. denies engaging in economic espionage, it does not shy away from acknowledging its ability to gather competitive intelligence from both allies and foes. Competitive intelligence (CI) is a legitimate strategy utilized by organizations to gather information on competitors’ emerging trends, capabilities, and potential threats. This type of intelligence gathering is overt and can be obtained through open-source data mining, OSINT, and commercial imagery. However, the possibility of the United States resorting to economic espionage in the future, particularly against China, remains a topic of debate.
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