Economic Espionage, Q&A with Dr Nicola Searle

New research by Dr Nicola Searle provides the first evidence based understanding of the sectors at risk to knowledge leakage and the trade offs between openess and increased security.

 What difference is there if any between economic and industrial espionage?

Industrial espionage - also known as commercial or corporate espionage, or intellectual property theft -means stealing your competitor’s innovation secrets. For example, working to get the Coca-Cola recipe or taking your ex-employer’s customer details to a new job. In pop culture we have the Plankton character in SpongeBob. Plankton’s entire plotline revolves around industrial espionage as he tries to steal the secret recipe for the Crabby Patty. Industrial espionage can be a big problem for companies.

Economic espionage is a type of industrial espionage where the theft is done to benefit a foreign entity. Pop culture references to economic espionage are usually thrillers. Because economic espionage involves geopolitical concerns, and increasingly for governments this means defence technologies, it poses a collective threat.

While domestic industrial espionage is more common, economic espionage is perceived to be much more serious.

To what extent has legislative action in economic espionage been directed or informed by evidence on the nature and extent of knowledge leakage? Has policy development in these areas been evidence based?

The new policy agenda is research security, which is an umbrella term covering threats to research including industrial or economic espionage. The US, UK and EU have all ramped up their policy efforts significantly in the last two years.

One of the challenges of policy in this area is that the evidence base is weak. Economic espionage is clandestine and difficult to measure. We don’t know how much industrial and economic espionage goes unnoticed. And even when economic espionage is discovered that information may not be shared for strategic or national security reasons. That means there is a limited evidence base, so I have a lot of sympathy for the civil servants trying to develop policy on this!

That said, countries have been stealing each other’s technologies for centuries and have been legislating to stop others from doing the same.

You recently published new research on economic espionage, what were you trying to find out and how did you go about this research?

With this research I was interested in understanding the relationship between knowledge flows – which are essential for innovation – and protections against espionage. I wanted to understand how this works in technologies that are more important for national security.

I worked with colleagues in Germany and Italy to look at instances of industrial espionage across the EU to get an understanding of where the risks are and how innovators respond. We took a database of industrial and economic espionage legal disputes to understand which types of organisations and industries were going to court. We then took that data and matched it to patent data to understand how organisations change their own innovation protections when they face threats.

What did you research reveal in the areas of economic espionage and which of these are significant for developing policies in this area?

We found that technologies considered more important to national security experience higher levels of industrial espionage. Strangely, synthetic biology is the most exposed, which we think is related to it being a highly collaborative research area.

The data couldn’t tell us much about the differences between economic and industrial espionage, which we believe is largely down to how cases are recorded. We’re reflecting on ways we can address this as it really is a challenging area to investigate empirically!

We also found that industries with higher levels of industrial espionage use patents to protect their innovations more and are growing their patent portfolios faster than industries with lower levels of industrial espionage. While we can’t conclusively say that one causes the other, it does look like there is a relationship between the two.

What are the risks of bringing issues of economic innovation into the remit of national security?

My concern is that we are asking innovation to grow the economy and then, in the name of national security, making innovation more difficult to do by increasing the costs. And these costs include making it more difficult to collaborate internationally, increasing regulations and reducing the ability to recruit highly skilled labour. If we focus so much on protecting innovation from theft, we may actually end up throwing the baby out with the bathwater. If innovation suffers and the economy is weakened, it then again becomes a national security issue.

At the same time, national security is important, and we do need to think about how we protect technologies that pose a threat when used by competitors – either economic or geopolitical rivals.

Your work has established a link between innovation and international collaboration in the past with the changes to Government policy on foreign students are you fearful that the spigot of innovation is under threat?

Over the last 20 years there has been a big push for greater openness in both science and innovation, which has been very successful in spawning collaborative approaches. However, where there are collaborations or researchers moving between countries and projects, there is more knowledge moving around. Where knowledge is moving around there are more opportunities for innovation but also for research breaches. Hence the concern about research security.

The UK’s research & innovation ecosystem has thrived on its ability to collaborate and to recruit top researchers internationally.

There was much made in recent months of the vulnerability that university-based research posed to UK national security. Are these concerns borne out in anyway in your research?

No, but with a large caveat. There is a dearth of evidence here and we cannot conclusively say the universities are particularly vulnerable or not.

More generally, there are surprisingly few publicly discussed cases of industrial espionage. This in part because of how UK courts work, but organisations are generally reluctant to speak about their research security breaches. They might be worried it makes them look bad or that talking about breaches gives away information about their research and innovation.

What I have heard in discussions is mostly anecdotal evidence for the UK.

Does the Government ‘s new national security strategy accurately capture both the challenge, and the measures needed to protect against knowledge leakage and protect innovation? What areas do you think the Government will need to reconsider based on your research?

What I found curious about the national security strategy was that the importance of innovation is discussed throughout the strategy but absent from the section explicitly discussing research security. It suggests that the focus of a research security strategy will be on security and not research.

Because the research security needs to walk a fine line between protecting against threats but encouraging research, supporting the research & innovation ecosystem needs to be at the heart of policy. It’s easily forgotten that restrictions are for everyone – protecting your own research from others also means protecting other people’s research from you. Getting access to knowledge will become more difficult, and there needs to be a balance.

What we need is a system that is  ‘as open as possible, as closed as necessary’.  And what is possible and what is necessary are open to debate.

Where next with your research in this area?

I’m excited to see growing interest in research security and have several projects underway.

I’m continuing to work with collaborators on understanding how research security threats make organisations change the way they innovate and protect their innovations. We’re looking at how that might impact collaborations or their choices of research areas, and how policy might impact innovation – or not.

I have some near-completion projects looking at the differences between industrial and economic espionage. We’re finding different forms of espionage target different types of secrets. And I have another piece that also has a surprising result. It looks like being a victim of espionage makes very little difference to how the organisation is valued.

And of course, I wouldn’t be a good espionage researcher if I didn’t imply that I have other secret work.  But I can’t talk about it because it’s classified.