What Is Industrial Espionage and How Can You Protect Your Private Data?

All responsible businesses actively defend against cyberattacks. One security issue that many businesses overlook, however, is industrial espionage.

Industrial espionage and cyberattacks are often carried out for the same reason; namely, the theft of private information. But unlike a cyberattack, industrial espionage is carried out by a business competitor rather than a random hacker.


So what is industrial espionage, and how can your business defend against it?

What Is Industrial Espionage?

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Industrial espionage is the theft of private information from a business for the purpose of obtaining a competitive advantage.

Industrial espionage can be carried out in a variety of ways but the most sophisticated attacks involve an employee at the business being targeted. A competitor may attempt to get a person hired at the target business, or they may approach an existing employee, and offer them payment in exchange for information.

Either way, the competitor ends up with an insider threat which is effectively working for them.

Industrial Espionage vs. Competitive Intelligence

Competitive intelligence is similar to industrial espionage, but they are not the same. Both practices involve collecting information about a competitor. Competitive intelligence, however, is only carried out using legal methods. A business conducting competitive intelligence uses public information that’s available on the internet. It does not involve spying or any other illegal activity.

What Information Is Stolen?

Industrial espionage involves the collection of any information which may be profitable.

  • Product information: Information about upcoming products and services is a popular target of industrial espionage. If a business can learn about a competitor’s upcoming products, it can improve its own products in order to compete.
  • Financial information: Information about a company’s finances can be useful for strategic purposes. By understanding what a business pays its providers and employees, a competitor can make a better offer. If an organization is short on cash, a competitor could use that knowledge to attempt to shut them down by applying increased pressure.
  • Client information: If a competitor obtains a list of a business’s clients, they are potentially obtaining a list of people that also want their service, and exactly how much to charge to undercut them. Any information stolen about clients could also be leaked online in order to damage the business’s reputation.
  • Marketing information: Upcoming marketing ideas can be stolen. An interesting way of promoting a similar product could be copied and published sooner. An effective marketing strategy could also be mitigated by putting out competing ads simultaneously.

How Is Information Stolen?

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Industrial espionage can be performed in a variety of ways.

Insider Threats

An insider threat is an employee who seeks to harm a business. Insider threats are arguably the most powerful tool for performing industrial espionage because of the amount of private information that they have access to. An employee can become an insider threat because they are disgruntled or because an outside party offers them payment. A business seeking to perform industrial espionage can also plant an employee by paying somebody to apply for a job.

Hiring an Employee

Industrial espionage is often performed by simply hiring an ex-employee of a business. After an employee leaves a business, it’s not uncommon for another in the same industry to hire them solely to learn what they know. While non-disclosure agreements and non-compete agreements can make this more challenging, it does not prevent the practice completely. Depending on the presence of these agreements, doing so isn’t necessarily even illegal.

Physical Trespassing

Some businesses attempt to steal information by simply entering the business premises. Many businesses store private information in readily accessible formats, and can therefore be accessed by anyone who manages to enter a secure area. Many businesses who spend a lot on cybersecurity still have gaps in their physical security. In some instances, physical trespassing can therefore be more effective than a cyberattack.


Physical eavesdropping devices can be highly effective if left in the correct place. Confidential conversations between senior employees can provide valuable information about a company’s objectives.


Industrial espionage is often conducted using a variety of cyberattacks. While most hackers work independently, some businesses do hire hackers for the purpose of stealing information for them instead. An independent hacker may also approach a business offering to sell stolen information to them, rather than advertising it on the dark web.

How to Protect Against Industrial Espionage

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In order to protect against industrial espionage, all businesses should take the following precautions.

Prevent Insider Threats

Insider threats are difficult to stop because they often know how to get around an organization’s security procedures. Businesses should always be on the lookout for suspicious behavior among their staff, such as accessing private information which is not necessary for their position. Any employee who appears disgruntled should also be monitored.

Require Confidentiality Agreements

Any employee working with private information should be required to sign privacy agreements. Where possible, any employees with highly valuable information should be stopped fro sharing any information with a direct competitor after they leave.

Increase Physical Security

All businesses should have adequate physical security around any area which contains private information. This includes video surveillance and security staff where applicable.

Encrypt All Private Data

All private information needs to be encrypted and only accessible to employees who need it to perform their work. Encryption protects against all aspects of industrial espionage including hackers, insider threats, and physical trespassing.

Invest in Cybersecurity

Cybersecurity is an important weapon against industrial espionage. All businesses should be employing basic security measures, including monitoring of all network traffic, the use of security software, and adequate employee training.

Industrial Espionage Is a Threat in Any Competitive Industry

Industrial espionage is something that most businesses should protect against. All businesses have information that’s potentially valuable to their competitors. There are also many different ways that it can be stolen. While insider threats are the most powerful way to steal information, physical trespassing is often easy to do and highly effective. Cyberattacks are also a powerful option which some rival businesses may attempt.

In order to protect against industrial espionage, all businesses should be careful about who they hire, watch out for disgruntled behavior, make physical premises secure, and implement cybersecurity.

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