Corporate Espionage Is Big Global Business

July 6, 2006 — -- Corporate espionage used to be the stuff of children's books. Arthur Slugworth, a rival of the infamous Willy Wonka, is probably the best-known culprit.

In Roald Dahl's "Willy Wonka and the Chocolate Factory," Slugworth tries to steal Wonka's secret recipes by bribing young visitors to the Oompa Loompa sweets maker.

Today corporate espionage is more cloak-and-dagger than chocolate-and-bubble-gum. It is big business, and with globalization, getting even bigger.

"This goes on every day," says Ira Winkler, a top corporate security analyst. "Whether or not people want to admit it, it is very, very common."

Common and expensive. In his book "Spies Among Us: How to Stop the Spies, Terrorists, Hackers, and Criminals You Don't Even Know You Encounter Every Day," Winkler estimates American companies lose as much as $300 billion a year to pirating, counterfeiting and other corporate theft.

Hacking into a company's computer system may be the most modern way to steal trade secrets, but experts say most thefts still occur the old fashioned way, by sneaking into a company's offices and making off with classified information.

Inside jobs are another tried-and-true method. We just saw an example of that when several people were busted as they attempted to sell Coca-Cola secrets to rival cola giant, Pepsi.

"Everybody does it," says Pat Choate, author of "Hot Property: The Stealing of Ideas in the Age of Globalization," and companies big and small fall victim to it.

While most theft involves American companies stealing from one another, more and more theft is being committed by companies overseas, especially in Russia, China and Taiwan. Of the 3,000 Chinese firms in the United States, Choate claims "a large number of them are engaged in piracy or stealing secrets and sending them back to China."

That's nothing new. Choate reminds us that in World War II, Japan built its Zero fighter plane from designs it had stolen from billionaire aviator Howard Hughes.