Title: Industrial Espionage, Chapter 13
Author: Paul W. Blackstock
Blackstock, Paul W. (1978) and Frank L. Schaf, Jr. “Chapter 13: “Industrial Espionage,” Intelligence, Espionage, Counterespionage, And Covert Operations: A Guide to Information Sources. Detroit: Gale Research Co.
Date Updated: March 10, 2017
Chapter 13 INDUSTRIAL ESPIONAGE
About a decade ago an estimate made for an American Management Association conference, held in Manhattan stated that corporate losses due to spying and theft of processes was running at about $2 billion per year. Furthermore, the estimate revealed that by the mid-1960s industrial espionage had risen 50 percent over earlier years. Considering that ten years ago industrial espionage was an activity of such significant magnitude, it is surprising that not a great deal of definitive literature has been written on the subject in the United States, except for articles in business and research-oriented magazines and the press, plus a few good books. Richard Greene’s Business Intelligence And Espionage is e serious textbook treatment of the subject; Edward Engberg’s The Spy in The Corporate Structure—And The Right to Privacy is a readable treatment which also brings in the broader issue of the individual’s right to privacy. England has produced sane literature (see Peter Hamilton’s Espionage and Subversion in an Industrial Society: An Examination and Philosophy of Defense for Management), and a more extensive literature exists in German (see Max Gurzenhauser’s bibliography in chapter 1).
Industry in the United States has banded together for security protection through the establishment of the American Society for Industrial Security which has fifty-three chapters spread throughout the country. (Headquarters of the Society is at 2000 K Street, NW, Washington, D.C. 20006. [As of 2016, the address for ASIS is 1625 Priince Streeet, Alexandria, VA 223154-2882. The website is https://www.asisonline.org/About-ASIS/Pages/default.aspx. The name “American Society for Industrial Security” no longer exists except in historical legal documents. The online site for ASIS is https://www.asisonline.org/Pages/default.aspx.]) The organization’s bimonthly magazine, Industrial Security, is a continuing source of information on the entire security field, and the society publishes special studies and guides from time to time. Industrial espionage is not restricted to competitive businesses of one country acquiring secrets from each other. There is an increasingly international aspect to the activity, and this has received very little coverage in the literature, Moreover, as a matter of national policy same countries assign to their intelligence services the special function of collection of commercial or military research and production secrets or designs from the companies of another country in order to save funds, cut lead times, or make up for a lack of facilities, personnel, or capabilities. For example, since the early 1920s, Soviet Russia has resorted to this form of industrial espionage on a planned and coordinated basis, (See David Dallin’s Soviet Espionage in chapter 14, section D1, for details regarding Soviet efforts in this field in the 1920s and 1930s.) So far as techniques and tools for the conduct of industrial espionage are concerned, all the items listed in chapters 7, 8, and 10 concerning use of electronic sensors, information technology, and invasion of privacy are also applicable here.
Alden, Burton H. (1959), et al. Competitive Intelligence: Information, Espionage, And Decision-Making: A Special Report for Businessmen. Watertown, MA: C. J. Associates
Baker, Anthony G. “Competitive Espionage.” Industrial Research (4, April 1962, pp.20-23)
The author, managing editor of Industrial Research [as of 1975], writes that as research and development competition in industry sharpens, the research laboratory has become the most tempting target for industrial spies, after the board of directors room. Several industries with formal intelligence operations were surveyed to determine the methods of business spying and countermeasures. The article includes an interesting chart on the requirements usually placed on business espionage agents, a list of innocuous activities that tip off the competition, and a statement of mission of the technical spy.
Brenton, Myron (1964). The Privacy Invaders. New York: Coward-McCann
Calkins, Clinch (1937, 1965, 1971). Spy Overhead: The Story of Industrial Espionage. New York: Arno
Engberg, Edward (1967). The Spy in The Corporate Structure: And The Right to Privacy. Cleveland, OH: World Pub. Co
Furash, Edward E. “Industrial Espionage.” Harvard Business Review, (December 1959, pp. 6-8, 10, 12, 148, 150, 152-54, 156, 161-62, 164, 168, 170, 172, 173-74).
A detailed questionnaire survey of 1,558 business executives indicated that “for the business community as o whole industrial espionage is an insignificant and frowned-on practice. Many of them also feel that it has received publicity out of all proportion to the frequency that such activity actually occurs in business, and hope that such publicity will help control rather than encourage it.”
Greene, Richard M. (1966). Business Intelligence And Espionage. Homewood, IL: Dow Jones-Irwin
Hamilton, Peter (1967, 1979). Espionage and Subversion in an Industrial Society: An Examination and Philosophy of Defense for Management (2nd ed). Leatherhead, UK: Peter A. Heims Ltd
Wade, Worth (1964). Industrial Espionage And Mis-Use of Trade Secrets. Ardmore, PA:Advance House, Publishers
 Engberg, Edward (1967). The Spy in The Corporate Structure: And The Right to Privacy. Cleveland, OH: World Pub. Co
 Hamilton, Peter (1967, 1979). Espionage and Subversion in an Industrial Society: An Examination and Philosophy of Defense for Management (2nd ed). Leatherhead, UK: Peter A. Heims Ltd
 Gunzenhauser, Max (1968). Geschichte Der Geheimen Nachrichtendienst: (Spionage, Sabotage Und Abwehr}: Literatur Berlchte Und Bibliographie. Frankfurt: Bernard und Graefe
 The magazine is now entitled Security Management.