Estimating Costs of Economic Espionage – CENTRA Technologies

A May, 2010 study titled ‘Estimating the Economic Costs of Espionage prepared for CENTRA Technologies…by the George Bush School of Government and Public Service at Texas A&M University, may be, in my judgment, as close to perfection as we are going to get!

Unfortunately, the study has been variously overlooked…even though  ‘researchers constructed a model initially designed for use by the government sector, but which, they determined has relevance to the private sector because it measures economic espionage losses by industry sector’.

More specifically, ‘the CENTRA model’ as modified by A&M researchers identifies and distinguishes the severity and consequences of…economic – cyber espionage incidents to the U.S. economy…

by applying a (loss) ‘severity score’ ranking between 0 and 1, and

includes open source (case study, incident) information to provide  qualitative estimates of the economic “consequences” as…

low, moderate, or highly adverse economic – competitive advantage losses, relative to victimized company’s industry sector, thus factors two sets of variables, i.e.,

  • Industry Variables, i.e., assess the significance of where the incident of economic espionage occurred, and
  • Case Variables i.e., assess the significance of economic espionage incidents on the basis of…
    • characteristics of the incident.
    • costs directly attributable to the incident (loss), and
    • who the beneficiaries – end users to the incident actually are.

Seldom are two incidents of economic espionage identical…to address this reality, Texas A&M researchers, developed a system for (a.) weighing the variables, and (b.) engaging in further analysis to assess what may influence those ‘weights’ being assigned.

So, the Texas A&M model requires practitioners to identify – distinguish…

  1. the industry sector in which the economic espionage incident occurred, and
  2. individual – specific ‘case – incident variables’.

Ultimately, as the relevant variables were measured, standardized, and weighted against each other…the CENTRA model was holistically applied to calculate an overall severity score, which corresponded to (victim) company specific consequences to incidents of cyber-economic espionage.

Note: For purposes of this study, the word ‘industry’ is derived from a combination of (a.) the contributory percentage of GDP for each of the 14 conventional industry sectors, and (b.) the susceptibility – vulnerability of each sector to economic espionage. This process enabled the CENTRA model to be individualized to a specific industry while distinguishing the potential for different consequences – impacts to the U.S. economy, as a whole.

This post was inspired by a George Bush School of Government and Public Service, Texas A&M University research project titled   “Estimating the Economic Costs of Espionage”. The reports was prepared for CENTRA Technology by the the Capstone research team comprised of Rich Bell, J. Ethan Bennett, Jillian R. Boles, David M. Goodoien, Jeff W. Irving, Philip B. Kuhlman, and Amanda K. White.  

Michael D. Moberly [email protected] St. Louis (originally posted) October 8, 2014 the ‘Business Intangible Asset Blog’ since May 2006, 650+ posts, ‘where intangible assets, business, and effective solutions converge’.

I invite you to explore other relevant blog posts, video, books, and position papers at

As always, reader comments are most welcome.

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