[xtypo_dropcap]T[/xtypo_dropcap]his year marks the first time that global companies are being hit more frequently by information and electronic data theft than physical property theft, according to an industry report.
“Theft of confidential information is on the rise because data is increasingly portable and perpetrators—often departing or disgruntled employees—can remove it with ease absent sufficient controls,” said Robert Brenner, vice president at risk consulting firm Kroll, in a press release regarding the Kroll Annual Global Fraud Report.
The survey findings in the Kroll report do not indicate that physical property theft has taken a backseat to intellectual property theft, but suggest only that instances of intellectual property theft are outpacing physical theft.
“The results of the survey do not suggest other types of fraud are decreasing but merely that the rise in theft of intellectual capital has outstripped other fraudulent activity that has remained constant,” Brenner said.
Valuable Intellectual Property
“There is a growing awareness among thieves of the increasing intrinsic value of an organization’s intellectual property,” according to Brenner.
Intellectual property is the bread and butter of companies in any industry and if stolen, could translate into millions of dollars of revenue losses.
Intellectual property includes copyrighted information, internal company secrets, and sensitive government documents. There is a large market for stolen information throughout the world, and resources that fight such theft are scarcely keeping up. Also, enforcement, especially in emerging markets, is lax, and the regulatory environment may not be well-established.
Intellectual property theft does not only encompass sensitive government and company information, but also creative works, such as movies, literary works, music, and so on. The entertainment industry, led by the Motion Picture Association of America, has been fighting copyright issues for uncounted years.
Recently, hundreds of thousands of copies of sensitive U.S. government information was leaked through Wikileaks, and the implication to diplomatic missions has not yet been fully assessed.
Intelligence gathering has found that sophisticated hacking, especially coming from hackers in China and Africa, is on the rise.
Almost half of the companies interviewed in the Kroll survey refused to do business in foreign countries because of fraud, corruption, and data and physical property theft.
China and countries in North America, Africa, and Latin America are named more frequently than European countries as places with high intellectual property theft, according to the business leaders surveyed.
Firms that have refused to enter China suggested a multitude of reasons, with intellectual property theft cited more often than other reasons.
“Corruption and information theft are the two most widespread issues (34% and 33% respectively), but concerns about intellectual property, a long-standing worry for those operating in the country [China], were a leading factor for 23% of businesses dissuaded from doing business there,” according to the Kroll research report.
Continued on the next page…
