• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Deterring Economic Espionage

    The House is considering new legislation concerning economic espionage. While the private sector should play the key role in combating this, there is bipartisan support for policy measures—and with good reason.

    The U.S. relies on innovation. It has become more important in driving internal growth and, externally, America’s comparative advantage is in technology. Theft of technology and our new ideas thus reduces gains from trade and erodes prosperity.

    The problem is starting to get the attention it deserves—for example, attention to the need for harsher penalties. Awareness is focused, perhaps unsurprisingly, on the People’s Republic of China. The PRC is hardly the first nation to conduct economic espionage, but the scope of actions by Chinese individuals and firms is in many ways unprecedented. Worse, the trend is unpleasant: Economic espionage seems to be intensifying rather than easing as China develops.

    A solution, though, faces pitfalls. The process of improving American policy should start immediately, but it needs to be a thoughtful process, anticipating that perpetrators of espionage will change their behavior as policy changes. Simple steps can and should be taken first. Adding complex regulations or criminal statutes without fully consulting the private sector could make both corporate security and legal enforcement more challenging.

    There are principles to shape this improved policy. Enforcement is necessary, but the reality can be discouraging. Punishments can even cause additional harm if confrontations are required with countries that reject the rule of law.

    From a policy standpoint, deterrence is superior to punishment. The prevalence of economic espionage indicates in part that deterrence is lacking. Raising the costs anticipated by those contemplating espionage will reduce the espionage itself and may help avoid the problems involved in enforcement.

    Deterrence alone, however, will not cure the disease of economic espionage. Private actors must take the lead for truly satisfactory solutions to be found. But enhanced deterrence is a sound goal for Congress to pursue at the outset.

    Posted in Economics [slideshow_deploy]

    One Response to Deterring Economic Espionage

    1. KJinAZ says:

      Why even bother writing a law? The UN will not enforce it. In fact they help other nations steal our technology. There was just a case about them getting thousands of computers to Iran. Do you think that will help them build their nuclear bomb faster? Who do these politicians think they are kidding?

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.