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Similar mitigation trajectories: Intellectual property theft and quality

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I had the opportunity to share some opinions on the impact of intellectual property (IP) theft, some already posted to this list, with a large, global supplier of parts and subsystems that was known for its production and quality focus but it had not been clear to me that the supplier was also ahead of many of its peers in its understanding of the diversion risk that it and its subsuppliers faced in certain regions.

I mentioned certain points from Hemorrhaging intellectual property to Asia, notably that on the established industrial side:

[The] OEMs (Original Equipment Manufacturers at the top of their respective supply chains) have been virtually ordering their suppliers explicitly or implicitly to China (a) to produce lower cost products for resale back to the OEM or one of the subsuppliers in the chain, or (b) support OEM plants in-country. The demand for cost reduction is the pole star. Our prediction is that the OEMs, whose hubris leads them to mistakenly feel themselves above the risk horizon, will not protect their suppliers as new Chinese or other low-cost country providers come on line and will shift purchases to those new firms, hollowing out their own industrial infrastructure, even as OEMs press those same suppliers for cost reductions on a year-to-year basis.

To this, I added that since the OEMs had financial pressures of their own and would not relent in their demands for immediate direct cost reduction such that the supplier had no opportunity to not go to the desired low cost area, that it was up to the supplier to address the incursions against the intellectual property of their firm and the subsuppliers in any critical path of their supply chain. Returning to "Hemorrhaging," I noted that:

"All technology leaks over time. The trick is to degrade and delay that leak. A major component of that [effort] is to put in place a process that, in simple terms, drives the bad guys down the street to a less well protected firm."

This commenced a discussion in which the supplier noted that it had never demanded such proof of ability from its subsuppliers that they could protect their intellectual property or any shared by this top tier supplier. I noted that was likely so as none of the open source descriptions of their strategic supplier selection process had any mention of IP theft mitigation. I then noted that their supplier selection process did have a vast amount of selection criteria pertaining to quality and that the supplier regularly made detailed examinations of a potential subsupplier's ability to produce quality parts prior to awarding a contract and that it made periodic evaluations of that supplier's ability to sustain its quality.

I offered the prediction that just as quality has become a mandatory requirement in order to bid, i.e., that it had become part of the baseline needs, that successful, surviving firms will make IP theft a part of that same baseline. Furthermore, IP theft mitigation will follow a similar adoption trajectory to that of quality -- and it can be presented to management on that basis in order to ease implementation. Some suppliers will see the need clearly -- or will be selected by their ability to see the need -- and become early adopters that maintain the first mover advantage provided by their R&D while others will fall behind, will be picked off in terms of differentiating technology, and will exit the market.

Suppliers must absorb yet another criteria in order to remain globally competitive. As Dr. Edwards Deming would say at the beginning of every quality seminar, as Clare Crawford-Mason and Linda Doherty recall, "It is not necessary to change. Survival is optional."

Once intellectual property theft mitigation enters the supply chain critical path, it will have an effect equal to quality or better yet, commonality of parts, in restructuring that top tier supplier's supply chain design.  (The effect can take time however. We frequently see suppliers attempt to rationalize their supply chains without first performing a parts commonality review.)

Not covered in the discussion was the supplier's construction of advanced R&D facilities in IP risk areas such as China. I maintain that such R&D facilities are no different from Venture Capitalists moving their assets to low (direct) cost but high (total) risk areas. Returning again to "Hemorrhaging":

"Venture Capital (VC) investors are driving their stable of firms to create product and produce revenue. Risk assessment is very low on their horizon. Private conversations reveal that VCs preach the mantra "to their portfolio companies to outsource hardware development and manufacturing to China or become uncompetitive." Some VCs have already made the next step of forming development groups in the PRC precisely to serve their entire stable of firms. Now the VCs have put a superb target-rich environment under one roof. Unlike established industrial firms that already have revenue streams, VCs have little of value in their stable of firms save their intellectual capital."

That must wait for another day. Just remember: Change is not necessary. Survival is not mandatory.

Gordon Housworth



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Industrial espionage: how your intellectual property is stolen

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We have previously discussed what is being stolen and who steals it. This discusses the means by which it is stolen.

The National Counterintelligence Center (NACIC) was established in 1994 to improve US counterintelligence (CI) coordination and cooperation among our CI agencies. The first of NACIC's Annual Report to Congress on Foreign Intelligence Collection and Industrial Espionage was published in 1995 and yearly thereafter. The industrial espionage collection methods section from the inaugural 1995 issue is still one of its unclass best and is often cited by later reports.

Ideological and military adversaries, allies, and neutrals alike target US economic and technological information. The 'friendlies,' in fact, can more successful per dollar expended as they build atop their legitimate access to US information to further their intel targeting. Certain allies such as France, Israel, and the PRC "have infrastructures that allow them to easily internalize high-tech information and utilize it in competition against US firms."

"Practitioners seldom use one method in isolation but combine them into concerted collection programs. Although countries or corporations have been known to turn legitimate transactions or business relationships into clandestine collection opportunities, some of the methods listed are most often used for legitimate purposes. While their inclusion here is not intended to imply illegal activity, they are listed as potential elements of a broader, coordinated intelligence effort."

Here are the basic methods. Were you to canvass your organization, it is most likely that you have been targeted by multiple means either to secure new data or to validate data previously obtained:

Traditional Methods: Espionage methods reserved for collecting national defense information are now being applied to collect economic and proprietary information.

Classic Agent Recruitment: A trusted insider of any rank or station is a superb collector of proprietary or classified information. Those is lower support and clerical ranks can often better access information without alarm.

US Volunteers: Thieves can be found anywhere where greed, money problems, drugs, alcohol, and personal stress are present.

Surveillance and Surreptitious Entry: Economic and industrial espionage can be a simple break-in or bag op where information or an information appliance is stolen over property.

Specialized Technical Operations: Higher order intrusions against computers, telecommunications, and private-sector encryption weaknesses "account for the largest portion of economic and industrial information lost by US corporations."

Economic Disinformation: Disinformation campaigns are used to "paint foreign competitors or countries [such as the US] as aggressive and untrustworthy" and so scare away domestic companies and potential clients from dealing with US companies."

Other Economic Collection Methods: Tasking foreign students in the US studying or working as an assistant to an individual in a targeted field.

Tasking Foreign Employees of US Firms and Agencies: Direct recruitment by a competing company or non-intel government agency, no intelligence service involvement, for its R&D effort.

Debriefing of Foreign Visitors to the United States: Active debriefing of one's citizens after foreign travel.

Recruitment of Emigres, Ethnic Targeting: Repatriate émigré and foreign ethnic scientists as technology transfer, appealing to patriotism and ethnic loyalty.

Elicitation During International Conferences and Trade Fairs: Concentrated groups of specialists on a specific topic offer opportunity to target individuals while they are abroad. Recruitment may also occur with follow-up when persons return to the US.

Commercial Data Bases, Trade and Scientific Journals, Computer Bulletin Boards, Openly Available US Government Data, Corporate Publications: Open-source collection of legally and openly available competitive information in the US. Valuable in its own right, can hone more illegal search efforts.

Clandestine Collection of Open-Source Materials: Groups or agencies that are monitored by US CI attempt to obscure their interest in specific open-source materials.

Foreign Government Use of Private-Sector Organizations, Front Companies, and Joint Ventures: Exploitation of existing non-government affiliated organizations or creation of new ones such as friendship societies, exchange organizations, and import-export firms offering frequent contact with foreigners.

Corporate Mergers and Acquisitions: Corporate mergers and acquisitions made specifically to allow a foreign company to acquire US-origin technologies without spending their own resources on R&D.

Headhunting, Hiring Competitors' Employees: Hiring knowledgeable employees of competing US firms to do corresponding work for the foreign firm.

Corporate Technology Agreements: Technology sharing agreements and negotiations that require US firms to divulge excessive information about its processes and products.

Sponsorship of Research Activities in the US: Sponsoring of research activities at US universities and research centers to collect proprietary information or insert intelligence officers for data collection.

Hiring Information Brokers, Consultants: Information brokers purchase information or offer commission or agency agreements. Brokers also hire former US government officials to lobby for expanded data access.

Fulfillment of Classified US Government Contracts and Exploitation of DOD-Sponsored Technology Sharing Agreements: Traditional US allies primarily use companies that are partially or substantially controlled by a foreign government to seek classified US government contracts.

Tasking Liaison Officers at Government-to-Government Projects: Requests for on-site liaison officer to monitor progress and provide guidance during joint R&D activities are used for unapproved data collection.

Gordon Housworth



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Who’s on the National Security Threat List and why?

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The FBI's National Security List (NSL) has two parts, the Issues Threat List (activities that get you on the list) and the classified Country Threat List (states whose activities are "so hostile, or of such concern" that investigations are warranted).

The issues list contains:

  • Terrorism (violent acts, criminal violations if committed in US jurisdiction, intimidation or coercion of government or population)
  • Espionage (US national defense info)
  • Proliferation (of WMD and advanced conventional weapons)
  • Economic Espionage (sensitive financial, trade or economic policy information, proprietary economic information, or critical technologies)
  • National Information Infrastructure (facilities, people, information, computers, cable, satellite, or telecom)
  • US Government (government programs, facilities, information, or personnel)
  • Perception Management (manipulating information, communicating false information, or propagating deceptive information to distort the perception of US policies)
  • Foreign Intelligence Activities (anything else not described above)

That broad sweep nets both friend and foe, broad national agendas and quite targeted issues. Former DCI Robert Gates made the understatement of the quarter century in noting:

"Some countries with whom we have had good relations may adopt a two-track approach, cooperating with us at the level of diplomacy while engaging in adversarial intelligence collection."

Few nations are, however, as forthcoming as France. In reference to the activities of Service 7, Pierre Marion, retired Director of the French DGSE, publicly noted that:

"This espionage activity is an essential way for France to keep abreast of international commerce and technology. Of course, it was directed against the United States as well as others. You must remember that while we are allies in defense matters, we are also economic competitors in the world."

The 2000 Annual Report to Congress on Foreign Economic Collection and Industrial Espionage uncloaked to identify six greatest offenders as China, Japan, Israel, France, Korea, Taiwan, and India.

I surmise the temporary Russian absence was due to the disruption from the breakup of the former Soviet Union. Taiwan was greatly exercised by being publicly placed among 13 nations designated as a threat to US national security, "including Russia, China, North Korea, Yugoslavia, Serbian-controlled Bosnia, Vietnam, Syria, Iraq, Iran, Libya and Sudan." More than twenty nations populate the list.

Who doesn't get publicized on the list are our closest allies such as the UK, (then West) Germany, the Netherlands, Belgium, and Canada.

Commercial enterprises and individuals account for the bulk of international industrial espionage activity, roughly three times the percentage due to foreign government-sponsored efforts.  Even developing countries pose a threat as their intel agencies profited from training provided by the USSR, DDR (East Germany), Czechoslovakia, Bulgaria, and even the US and so have created a "reservoir of professionally trained intelligence mercenaries."

US intel agencies do not reciprocate in conducting industrial espionage against foreign companies to the direct advantage of US firms. Intel efforts are designed to support US aims without sharing commercial information with US companies. The US will, however, step in from time to time to confront foreign nations with public disclosure should they not desist. The FBI also routinely briefs corporate security officials of US firms that operate in certain countries, friend and foe alike, and if personnel threats are considered extreme, will offer useful guidance.

Gordon Housworth



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Why steal COTS products or processes?

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Building on What are they stealing now? 

"Foreign collectors most likely settled for commercial products after learning that their [clandestine] collection efforts failed and were not worth pursuing."

Targeting countries appear to wait for a successful US commercial application of a technology before seeking to acquire it as the kernel of capability for military use is often contained in the commercial variant. An airborne IR sensor is a good example that applies to all dual-use technologies.

I would stress that "failed" applies to collectors' time horizon and that the early securing of a commercial variant will act as a "gap filler" in both their defense and commercial posture and will act as a development seed in their research institutions.

As developed countries suffer legacy drag as we do, preferring not to change computer systems when an upgrade is needed, they target absorbable enhancements. Not so encumbered developing countries will attempt quantum leaps in capacity by acquiring newer, more advanced systems.

Everything is at risk to someone. In the early 80s I went to the Pentagon to make a deposition as to how the Soviets were buying English PCB (printed circuit board) CAD systems en masse in order to make LSI (Large Scale Integration) chips.  The military attendees were stunned when I described a simple sectoring process in which a chip's logic could be broken up in segments absorbable by the PCB systems and then stitched together.  The "commercial loss" of silicon was unimportant in comparison to the ability to achieve high density chip architecture.  That was a year after I watched the Shanghai Institute of Metallurgy hand-tape (manually apply pull-off and paste decals to represent components) its first 1K RAM chip.  The attendees were not aware of that either.

At times, the collection attempts are not directly military (but will ultimately have a military bump) as even moderately capable nations want to stay apace of the US, avoid dependency on external contractors, lower their maintenance costs, improve availability, and embed capacity in their local production.

  1. Complimentary and redundant set of attack vectors are common. Acquisition attempts vary from simple, passive info requests to sophisticated multi-spectrum collection efforts, but it is rare to receive a single attack vector. At a previous firm, we used to joke that, "The Indians are the greatest paper collectors on the planet."
  2. It is more common for your firm (but not you) to receive multiple probes, the responses from which tailor or redirect the probes that follow. Japanese firms with whom I had previously worked peppered my company from programmer to senior executive -- often six or seven requests on the same day on the same issue. There was great distress when I stipulated that all messages came to me for a single integrated, controlled reply -- and then distributed the reply internally as the 'rule.'
  3. Every nation has a pattern or preference that, while it will change over time, has very recognizable characteristics through the medium term. Technical ability, culture, polity, and business practices merge with need and so help paint any country's attack profile. (The Chinese affection for humint is a good example.)
  4. Collection plans seek the greatest ROI and the greatest OpSec (operational security) for the collectors' assets and means.

Next we'll look at why a country gets on the FBI's New Security Threat List, and then who gets on this porous, ostensibly classified list, and who gets left off for reasons of political sensitivity.

Gordon Housworth



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What are they stealing now? Or do you just hand it to them?

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"You might as well sell this to us. We are going to get it anyway."

Not the best justification for sale but it is indicative of the size of the problem.

Commercial firms are at a disadvantage in that most are driven respectively by cost, cost, and cost while the skilled few are driven by cost, time, and risk (the latter two being other forms of cost). Only the very rare firms and the military look at risk, time, and cost.

How is a company to know what is valuable and to whom? Yes, all 18 of the MCTs (Military Critical Technologies) are consistently targeted but many commercial firms, if they think about it at all, think that it must apply to someone other than themselves.

It helps to see one’s products and services within the consistent themes that have emerged over the past six years:

  • Dual-use technologies
  • Components over complete systems
  • Unclassified technologies

‘Whoops, that could be me after all’ and indeed it is. Interest in dual-use items is self-explanatory -- they improve commercial and military areas equally. Components are less obvious but they face far less scrutiny to secure and are easier to integrate once obtained.

The "unclassified" category is vast; including both ITAR and EAR administered items. About 90 percent of all technology targeted by foreign assets in 2002-2003 was unclassified.

It is hard not to find your company in the "diverse assets of the energy, agriculture, automotive, machining, and environmental sectors."

Delving deeper, you may be providing standalone or embedded computer and chip technologies, semiconductors, biotechnology, biometrics, nanotech/miniaturization, pharmaceuticals, public security technologies, manufacturing processes, public safety systems, and patent rights.

Highest MCT categories are:

  • information systems (anything for C4IR - Command Control Communication Computer Intelligence Recognition)
  • Sensors and lasers
  • Armaments and energetic materials
  • Electronics

Later we'll deal with who is after you and how do they do it.

Gordon Housworth



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Hemorrhaging intellectual property to Asia - Part II

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In response to a previous post of 4/20/04, if I may, let me offer another observation.

Outsourcing of key business functionality is (whether on-shore or off-shore) in many ways an "Emperors New Cloths" problem - corporations are chasing short-term economic advantage to bolster stock prices rather than long-term economic advantage to support real value, everyone knows it, but no one will say so. Were corporations (and more importantly their officers) required to be accountable for the value of the corporation for some period of time going forward (say 5 years) the decisions they made would be vastly different.

While at IBM I was very involved with their out-sourcing group at the highest levels. I can tell you that privately they knew that few if any client companies would ever realize the 30+% cost reduction they were promising in an outsourcing (no mater where the activity took place) and in fact most would be hard pressed to realize a true 10% reduction in costs. In fact most clients would experience a significant increase in costs. Why? Because IBM had to make their profits, and very few organizations were so poorly managed that the combination of IBM profits and their cost reductions could provide any economic advantage.

Moreover, every deal was sold based upon the assumption that the client would see their investment pay off in the 3rd and subsequent years. Yes, you read that right. Clients parted with large sums of money in the hopes that even larger sums would be returned in three years. As far as I know, not one single client of IBM has yet realized the promised gains, but none have the ability to resurrect the function they outsourced without extraordinary expense. So, senior management declares the effort a success, explains the short-fall as a function of changing market conditions, and the board nods wisely their approval.

I can also tell you that their calculus never included consideration of loss of competitive advantage, loss of flexibility, loss of innovation, or loss of control. Further, not one client ever performed a "total cost of outsourcing" or. perhaps more important, a "total cost of re-insourcing if it doesn’t' work out" study. It was purely a reduction of cost for currently ongoing activities, while dismantling the entity that could produce competitive advantage.

In many ways, the culprit is the laxity of the SEC in protecting investor interests. The solution may be to modify how the audit industry accounts for these activities. Truth is, if GAAP (Generally Accepted Accounting Practice) is changed to reflect outsourcing risk, many of these activities will change (be eliminated).

Gordon's point regarding the VC community is very well taken. They intend to be out long before blowback can effect them. In the process they may very well have mortgaged our technologic and competitive future.

The most important concept in Sarbanes-Oxley is long-term accountability for senior management. What a concept! When applied to outsourcing decisions our (individual investor and national security) interests will be better protected.



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Hemorrhaging intellectual property to Asia

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In response to a comment regarding one's risk detection and amelioration posture when venturing offshore into a region, or an industrial segment, of high value to nations such as France, Israel, Germany, Russia, or the PRC, a private list member noted:

"I truly believe that your analysis applies to the current "outsourcing" outcry. But, the outcry is just about jobs now. It's the future (the USA's) that is in economic peril. Our industrialists don't seem to get it."

Unfortunately the commercial stampede at both the industrial and venture capital level has long been underway and the PRC is harvesting the bounty.

We have painfully learned that at the Venture Capital (VC) level, investors are driving their stable of firms to create product and produce revenue. Risk assessment is very low on their horizon. Private conversations reveal that VCs preach the mantra "to their portfolio companies to outsource hardware development and manufacturing to China or become uncompetitive." Some VCs have already made the next step of forming development groups in the PRC precisely to serve their entire stable of firms. Now the VCs have put a superb target-rich environment under one roof. Unlike established industrial firms that already have revenue streams, VCs have little of value in their stable of firms save their intellectual capital.

On the established industrial side, the OEMs (Original Equipment Manufacturers at the top of their respective supply chains) have been virtually ordering their suppliers explicitly or implicitly to China (a) to produce lower cost products for resale back to the OEM or one of the subsuppliers in the chain, or (b) support OEM plants in-country. The demand for cost reduction is the pole star. Our prediction is that the OEMs, whose hubris leads them to mistakenly feel themselves above the risk horizon, will not protect their suppliers as new Chinese or other low-cost country providers come on line and will shift purchases to those new firms, hollowing out their own industrial infrastructure, even as OEMs press those same suppliers for cost reductions on a year-to-year basis.

I can speak to the means and actors that would gain access to the technologies being developed. It is extreme in its impact on US interests and I think that the VC and industrial communities are blind to it. We are in the process of contacting certain VC and commercial firms to outline the intellectual property (IP) theft being carried out by overt and covert subsidiaries. It is our opinion that the charge of fiduciary breach can be leveled at anyone who callously lets the IP of their stable be stolen.

Certain firms have a sensitivity to risk analysis (Intel, IBM, and HP come to mind), but their horizon has more to do with minimizing time and delivery/availability risk (above and beyond direct costs) in their supply chains. What they almost universally do not do is extend that risk assessment and mitigation to a level that generates legitimate security. It is too often 'feel good' security uniformly applied to all assets instead of a prioritized response against the assets most at risk.

Our experience has shown that there is a lack of tailored, proactive due-diligence and surveillance put in place to identify, and then mitigate. All technology leaks over time. The trick is to degrade and delay that leak. A major component of that is to put in place a process that, in simple terms, drives the bad guys down the street to a less well protected firm.

Gordon Housworth



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  • Please see Hemorrhaging intellectual property to Asia Part II above for addition...more
    - [Jeb]

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Blowback on French institutional coupling of politics and business

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I found the extended criminal trial over French culpability in the collapse of the large California insurer, Executive Life, in the early 1990s, less interesting as a marker of a declining Franco-American relation than as a window into a very tight coupling of French politics and business (supported by intelligence) that assumes ('presumes' might be a better word) a "political solution" can always be relied upon to sweep away the putative laws and treaties in force between any partner, competitor, and customer.

In a series of court proceedings that predated by far the second Iraqi invasion, one negotiated settlement after another fell through as the French "couldn't accept that there was not a political solution," and that the criminal matter being pursued by US federal court would proceed unimpeded.

Now the French government has pleaded guilty to a criminal count, paid a packet over and above the bailout costs already borne by their taxpayers, and is staring down the bore of 'big money' in the US civil suit to follow. It must astonish the French just as it has, and still does, the Chinese, say, when they expect the US in suppress activities of Chinese dissidents here in the US.

On the reverse, US businesses are lulled into a false sense of security when they go overseas assuming that the 'script as written are the words that make it into the movie.' It does not work that way and US firms need to have a risk mitigation strategy in place when they go so that their investment is protected.

As one who has advised US firms in resisting the deprecations of combined French political, intelligence, and industrial assets in the energy sector, part of our guidance to mid-size energy firms operating in Africa are to:

Be offshore in partnership with at least one other major US player. Third world governments are less prone to interfere with the super majors.

If no US player is possible, be offshore in partnership with at least one major non-US player that has similar interests and risk assessments. Areas where the French have an overwhelming presence carry added risk.

Postwar France has deemed its right to a foreign policy independent of NATO to rest upon its nuclear Force de Frappe and its suzerain over Francophone Africa. France exercises that suzerain aggressively by using all its state and commercial assets. (The French are not all that pleased of our presence in non-Francophone Africa for that matter. Witness our rapprochement with Libya. In a stroke, we divert both Libyan spending and Libyan crude oil to the US -- crude oil that was flowing inexpensively across the Med to France, a point not lost on the US government.)

Do read the article as it is a delicious tale. And do armor up your risk detection and risk amelioration posture when you venture offshore into a region, or an industrial segment, of high value to France.  Or Israel, or Germany, or Russia, or the PRC:

How Insurance Spat Further Frayed U.S.-French Ties
Paris Forks Over $375 Million In Executive Life Dispute; Gucci Owner Pinned Down
California's Civil Suit Looms
By JOHN CARREYROU and GLENN R. SIMPSON
Staff Reporters of THE WALL STREET JOURNAL
April 16, 2004; Page A1

Gordon Housworth



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Outsourcing to increasingly IP hostile areas

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If you are a producer -- or a consumer that has such a producer embedded in your supply chain -- you should hear an alarm bell warning of rising intellectual property theft in Will India price itself out of offshore market? with respect to migration of outsourcing from India to China, Romania, and Russia.

The Indians have been content with producing a more competitive product without stealing the IP itself. There will be no such compunction in the PRC and eastern Europe. Firms that use code -- and that means all the way down to embedded controllers in 'hard' industrial components and systems -- will be at risk if they do not protect themselves.

Rising Indian salaries coupled with greater US demands for cost savings will prompt US firms to evaluate other lower cost regions.  Even some Indian firms have commenced offshoring their own work to China:

"Tata Consultancy Services, one of India's four largest exporters of software, has begun to offshore its staff," the American Electronics Association says in a new report. "By 2005, TCS plans to have 3,000 software engineers in China, or 15 percent of their global work force."

While the bulk of current US offshoring is seconded to India, a spike in regional risk on the subcontinent would accelerate a shift elsewhere.  And while it is true that some US vendors will follow a risk-averse path and keep application development and data concentration within US borders, I believe that cost pressures will overcome that fear for most firms, and so continue to put their intellectual property in very poorly controlled areas.  My risk calculus for software vendors rises significantly.

Will India price itself out of offshore market?
By
Mike Yamamoto
CNET News.com
March 29, 2004, 4:00 AM PT

Gordon Housworth



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Outsourcing without thinking about risk

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Unless you are of Herculean calm, the salient message of Gartner CEO to CIOs: Embrace offshoring or else is Gartner's blunt admonition that "Not only IT's rank-and-file jobs are at risk; even IT leaders could be out of their jobs if they aren't looked upon within their organizations as the go-to people on outsourcing" will most likely hurl you into outsourcing without further investigation or resistance.

Only the very few will have the presence to decide to do it in a safe(r) and productive manner so that they protect their firm's intellectual property against theft and diversion.

"Fleisher recalled how the U.S, during previous economic transitions, has embraced outsourcing in order to retain its position as an economic power and leading generator of domestic job creation. "Technology has driven massive change in how the labor force is deployed since the coming of the industrial revolution," said Fleisher. "Western economies have been uniquely successful in navigating each wave from agriculture to manufacturing and then from manufacturing to services. Millions of jobs have been altered or disappeared in the process. Yet, millions more have been created.""

True, but previous waves did not suffer an intellectual property theft posture on so grand and strategic -- and invisible -- scale.

Gartner CEO to CIOs: Embrace offshoring or else
By David Berlind,
Tech Update
March 29, 2004

Gordon Housworth



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