Growing cyber-enabled industrial espionage challenges knowledge-based economies

In this article, Chief Policy Adviser Mika Susi, Confederation of Finnish Industries EK, analyzes the impacts of cyber espionage on our society and businesses and proposes solutions to the problem.

European industry knows from everyday experience that its property is continuously under attack in cyber space. A few weeks ago, Europe´s largest business organization BusinessEurope stated its growing concern on cyber-enabled and state-sponsored industrial espionage. The cost of cyber espionage for EU countries is estimated to be huge. According to studies, even 1−2 percent of GDP may be lost annually. The question is, how many jobs, business opportunities, and how much well-being we lose because of continuous and aggressive intellectual property theft.

Who is digging in your mine?

Knowledge and data are referred to as the most important natural resources of our time. Our growth and prosperity are ever more based on creating and refining large amounts of data. A large part of our society’s critical daily functions is dependent on complex digital infrastructure with vast amounts of different vulnerabilities.

Over the past few years, many law-enforcement and security authorities have announced that state-sponsored industrial espionage in cyber space is a growing problem for European economies. From the business organizations’ viewpoint, we seem to be witnessing the greatest burglary surge of all time. Some foreign states have created massive cyber espionage capabilities targeting our industrial sector and, consequently, the foundations of our prosperity. State-sponsored hackers are continuously swinging their cyber pickaxes in our intellectual mines, eating up our knowledge-based capital. And the problem is not decreasing − vice versa − we seem to be confronting a growing global challenge.

Assessing the long-term impact

Should we just accept that we are dealing with an inevitable and expanding phenomenon which is a natural part of the global competition? Should we even tolerate it? From the business community perspective, the answer is no. We need to stand up and make it clear that such criminal and harmful acts are not acceptable means of global competition or belong to a healthy business environment.

The most worrying effect of expanding cyber espionage is the long-term negative impact on our knowledge-based society. It’s not only about losing money and profits, but it is far more about losing human and knowledge capital. When we lose our intellectual property and trade secrets, at the same time we lose part of our competitiveness and technological advantage that has been created during the past decades by extensive public and private investments on education, know-how, and innovations.

Can we tackle the problem?

The answer to the problem does not lie in increasing national-level digital fortifying or other state-centric measures. We need a common response to prevent hostile actors from eating the tastiest parts from a dinner table we have set for ourselves to enjoy. It is, of course, important that we always at least attempt to take the forks and knives away from their hands.  We also must state clearly that if someone wants to be invited to the table, one needs to follow certain manners. So, the answer is not only hardening technical defense and growing resilience but also a policy level response is needed.

Firstly, it is essential to build a firm and open judicial ground for countering cyber espionage both on pre-emptive and penalty system levels. Secondly, as BusinessEurope mentioned in its recent statement, we also must use non-legal measures such as diplomatic and economic actions to prevent harmful acts in cyber space. Thirdly, all these measures should be prepared and done in a close co-operation with business communities and governments of the leading knowledge-economies.

Often complex problems may not have simple solutions, but usually, they can be found through common response and determination.

Mika Susi
Chief Policy Adviser
Confederation of Finnish Industries EK