Michael D. Moberly     November 5, 2012

Just how much importance should an organization’s c-suite and security management team attach to an insider’s (a.) nationality, (b.) motive(s), and (c.) possible conspiratorial and/or state-sponsored components effecting a successful act in which…

….valuable, competitive advantage, and market space delivering information-based (intangible) assets are stolen or misappropriated?

Would it be more useful to devote time, energy, resources, etc., to executing the most effective enterprise-wide policies, practices, and procedures to…

• identify and sustain control, use, ownership, and monitor the value and materiality of a company’s most valuable and revenue producing (intangible) assets, and
• ferreting out would be insiders regardless of their nationality or country of origin?

Willie Sutton, the infamous bank robber, according to urban legend, responded when asked, ‘why do you rob banks’ in very straightforward and simplistic fashion, ‘it’s because, that’s where the money is’!

In a perverse sort of way, and, of course, setting aside classified national security assets, Sutton’s view and mine are similar in this context; U.S.-based intangible (intellectual property) assets are frequently, if not wholly targeted because, globally speaking, this is where large percentages of such assets originate and developed.

So, why should it come as any particular surprise that U.S.-based intangibles are targeted by insiders, trusted, or otherwise, by various nationalities.  Generally, the suspects (by nationality) are demonized in the media and other sources, when in fact, it’s virtually certain the victim organizations – companies will seek new/additional trading opportunities or business transactions with those countries (nationalities) tomorrow and for the foreseeable future.

In all the research I have and continue to conduct and experiences I have had in various aspects of economic/industrial espionage and addressing insider threats and risks, I am familiar with very few companies which have elected to withdraw their business associations with a country and/or its government following a theft and/or misappropriation of proprietary intangible assets.  That’s not to suggest victim companies overlook or dismiss such events.  Rather it is to suggest lucrative business opportunities associated with numerous countries in which insiders frequently originate can be discounted literally and figuratively.

One example, among countless others, bears this out quite nicely.  Several years ago, a U.S. based computer manufacturer established three new assembly sites in Asia.  Before the sites’ became operational a senior executive projected her company would lose in excess of $125 million dollars in ‘IP’ during the relatively short life cycle of these particular assembly plants.

There is, to be sure, more ‘ink and talking heads’ focusing on the China link, as being the primary initiator, collector, and beneficiary of stolen and misappropriated IP.

What is disconcerting about this in my view, are the increasingly sophisticated technologies used by an ever expanding range of state sponsored and independent brokers that, in many respects, render the term ‘insider’, as it is conventionally applied, outmoded, if not obsolete.  That is, (human) presence is simply no longer an absolute requisite to the range of illegal acts which insiders can successfully engage.

However, will – would a company who reports being victimized by an insider, e.g., Dyson v Bosch, for example, in which, it so happens, the alleged perpetrator is of Chinese origin, done anything differently in terms of how they designed and implemented their insider threat mitigation practices, policies, and procedures?

In today’s increasingly interconnected global business transaction environment, there is a high level of universality in the economic fact that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, profitability, market space, and competitive advantages  lie in – evolve directly from a range of intangible assets.

Companies may have far greater success in mitigating insider threats and risks when such acts/behaviors are characterized in particular relationship contexts, i.e., vendors, trusted personnel, or more specifically, relationship, structural, and intellectual capital.

But, a question remains, for me at least, can insider threats – risks be more effectively mitigated if they focus on an employee’s nationality and that nationality’s propensity, receptivity, and/or proclivity to be part of, or engage in insider acts in a state sponsored context?  And, if one believes it can, would the product of the overall insider threat/risk mitigation initiatives, i.e., implementation of policies, procedures, and practices really look any different?

More specifically, is there a need to design/execute insider threat – risk mitigation practices differently if the target company assumes the threat evolves primarily, if not solely from state-sponsored sources, independent (legacy free) brokers, or disgruntled employees?  The answer to this question, in my view, is a prudent and somewhat cautious yes!

The business reality I have come to know, is that very few companies are eager or willing to jeopardize relationships with several billion potential  consumers and those country’s rapidly rising middle class, based solely on the inevitability they will lose certain amounts of their valuable intangible – intellectual property assets.

Of course, I am certainly not implying that companies should be less prudent in designing and executing any market entry planning and/or business transaction with firms in other countries.

But, readers please recognize, it’s not solely a company’s IP which a large percentage of insiders are seeking, i.e., patents, copy rights, trademarks, rather it’s the intellectual and structural capital, the knowhow, and the processes and procedures necessary to achieve economic and competitive advantage.  I’m quite confident, for those who disagree, will be constantly engaged in uphill skirmishes in which periodically a war or two may be one, but seldom, if ever will the persistent and asymmetric (insider threat-risk) battles be won!

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