Economic Espionage: The Threat to U.S. Industry

GAO discussed issues involving foreign economic espionage and its detrimental consequences to U.S. economic viability and national security interests. GAO noted that: (1) as a leader in creative technological research, the United States is a prime target for economic espionage, often through sophisticated and undetectable methods; (2) espionage efforts of intelligence agencies in the Soviet Union, France, and Israel have saved those countries billions of dollars and many years of research and development efforts in gaining U.S.-developed technologies and expertise; (3) U.S. business people have aided foreign competitors in obtaining proprietary information; (4) it is difficult to determine if such espionage is government-sponsored or supported, and the clandestine espionage operations of other countries contrasts sharply with the U.S. government stand that it will not engage in economic or industrial espionage; (5) although there are cryptographic and other information technologies that can protect against the vulnerability posed through electronic transmission of sensitive information, the U.S. intelligence community has applied only a weaker protection standard which places a burden on commercial activities and does not adequately protect communications between the industry and government; and (6) the criminal justice and intelligence communities have not adequately addressed or effectively coordinated activities regarding the economic espionage problem.