Hacking your way to prosperity.

While we worry about patent protection and legal barriers to innovation, China, according to Bloomberg, has gained access to technology and business secrets inside at least 760 foreign companies:

(Dec 14, 2011. Bloomberg) - “They are stealing everything that isn’t bolted down, and it’s getting exponentially worse,” said Representative Mike Rogers, a Michigan Republican who is chairman of the Permanent Select Committee on Intelligence.

China has made industrial espionage an integral part of its economic policy.

“What has been happening over the course of the last five years is that China -- let’s call it for what it is -- has been hacking its way into every corporation it can find listed in Dun & Bradstreet,” said Richard Clarke, former special adviser on cybersecurity to U.S. President George W. Bush, at an October conference on network security. “Every corporation in the U.S., every corporation in Asia, every corporation in Germany. And using a vacuum cleaner to suck data out in terabytes and petabytes. I don’t think you can overstate the damage to this country that has already been done.” 

If keeping secrets is impossible, then a higher-level strategy has to be applied to control the flow of know-how. In this environment the only way you can compete is by using the legal system to attack counterfeit products and services.

tags: control, information, technology, business, model, china, patent