Economic Espionage and Cybercrime: Evidence and Strategy

Lead Research Organisation: Goldsmiths College
Department Name: Inst for Creative & Cultural Entrep ICCE


Each year, criminals steal an estimated £280 Billion of secret information. These crimes are hidden, with the perpetrators potentially thousands of miles away. Where does this crime happen? In the cyber world. Cyber criminals target valuable company assets, as they hack computers and bypass security systems to steal confidential business information, prototype designs, strategic bid information and customer lists. These assets are collectively known as trade secrets, as they derive their value from their secrecy. When this theft is done to benefit foreign countries, it is known as economic espionage. Concerned governments and companies are effecting important changes to combat this problem. Yet, despite the huge economic impact of these thefts, very little is known about them. This research seeks to address this lack of knowledge by investigating data on the theft of trade secrets to understand their economic impact.

Using a unique source of data, this research examines what is actually happening in cybercrime. Analysis of information from court cases generates a systematic understanding of what is stolen, who the criminals are, and how this affects victims and the economy as a whole. By definition, the stolen trade secrets are secret, and therefore very difficult to investigate. This project uses the rare insights and information found in court cases to tease out a better understanding of this cybercrime.

Over the course of this project, a team of researchers will collect and analyse court data. The researchers will use statistical and other analytical techniques to create a robust understanding of trade secret theft and its implications. These findings will be publicised using conferences, seminars, academic papers and social media, so that groups and individuals interested in these topics can engage with this project and the research team.

This research will benefit businesses, policy makers, researchers and the general public. Businesses will hve a better understanding of the value of their trade secrets and how best to protect them. Policy makers will be able to develop better policy as the project will generate evidence to ground economic insights and objective analysis into action. These improved policies, which create mechanisms to protect assets, will benefit the economy as a whole, as law and policy will be better tailored to the actual, as opposed to our current theoretical, situation.

Researchers and innovators, from the fashion designer working on their next collection, to the aerospace engineer developing a new aeroplane, will be able to better protect their valuable prototypes, software programs and other trade secrets. Researchers who focus on cyber security and trade secrets themselves, will have improved insights leading to better cyber security systems designs, data to test social policy and estimates of the value of trade secrets. Legal scholars will have access to a rich source of information to combine empirical analysis with theoretical approaches.

Finally, the general public will benefit from enhanced security and improved policy environment. Improved cyber security means better protection of personal data. The policies informed by this research will encourage innovation. Innovation improves lives, as we enjoy new fashions, advanced aeroplanes and new medicines.

However, one group is not likely to benefit: the would-be thieves and corporate spies who target trade secrets.

Planned Impact

This project addresses the UK's £27B annual loss resulting from cybercrime. It is designed to positively impact the economy and innovation. It does so by addressing policy makers, who are the government figures responsible for development of the regulations and laws that govern the economy. A second important group who will benefit from the research are the collective users and researchers of trade secrets and cyber security. Finally, the research speaks to the wider group of the general public.

Trade secrets are a mechanism to protect company secrets like algorithms, recipes (e.g. the Coca-Cola formula), prototypes and customer information. As our economy becomes more digitised, these valuable secrets are increasingly stored in the cyber world and are vulnerable to theft and the loss of secrecy. This project collects court data on cases of cybercrime and trade secrets theft to provide evidence of the real-world impact of this crime. By investigating these at a systematic level, we will have better understanding of trade secrets, their theft and cybercrime, to create better policies, strategies and foster an innovative cyber world.

At a very broad level, this research addresses innovation. Innovation is an important means to drive economic growth. It generates new knowledge, leading to new medicines, better cell phones and new ways of doing things. Trade secrets are an important mechanism to protect innovation as they allow innovators to make money from their research and development. If, for example, a company spends millions of pounds developing safer car tires, and the formula for the tires is stolen and made freely available, the company will have difficulty recouping its investment and may not be able to invest in further innovation. The loss of trade secrets, and the overall cost of cybercrime, inhibits innovation and therefore it is important we understand how this works.

In the cyber world, regulations such as law and government policy shape ourinteractions and the rules that protect us. The group responsible for developing these rules, policy makers, assess trade secrets and cybercrime challenges to develop a policy environment that accounts for the needs of businesses and consumers. However, we only have theories and anecdotes to inform this decision-making. Instead, this research's analysis will tell us what trade secrets are stolen, how much they're worth and who is stealing them. It is important policy is well informed, or it may have unintended, negative consequences on whistleblowing and employees' ability to move jobs. The research team will be in regular contact with policy makers to convey this information and make better policies.

A second important group is users and researchers of trade secrets. This group ranges from the companies owning the trade secrets, the researchers creating new trade secrets (such as the engineer design a new tire tread) and researchers who study trade secrets and cybercrime. Businesses will benefit from the better understanding of the value of their own trade secrets, and how to strategically protect their innovations. By knowing how trade secrets are stolen, strategies and technical solutions can be developed to better protect these assets. The project will collaborate with researchers and companies to shape the research.

A third group is the general public who contribute to trade secrets by providing personal data and information. When trade secrets are stolen, this can rob consumers of their privacy. The insights from this research will improve cyber security by giving specialists the information to design systems to prevent these thefts. As a result, the public can be more confident that their information and privacy is secure.

Collectively, the research will provide insights to create policies and strategies that encourage economic growth and benefit governments, businesses and consumers.


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