Economic cyber espionage will only get worse, ODNI report says

Companies in the IT, defense, energy, biotechnology, environmental protection and manufacturing sectors have the most to fear from nation-state groups looking to conduct economic cyber espionage, according to a new report by the Office of the Director of National Intelligence.

The report singled out Russia, China and Iran as "three of the most capable and active" players in this area. However, ODNI warns that other, unnamed countries with "closer ties" to the United States are also undertaking such efforts.

Such operations draw on more than just technological tools. Because of the unique intelligence resources available to nation-states, these groups “combine cyber exploitation with supply chain operations, human recruitment, and the acquisition of knowledge by foreign students in U.S. universities” to steal or acquire trade secrets from U.S. technology sectors.

Former Air Force Brig. Gen. Greg Touhill, who served as the nation's first federal chief information security officer, said all three of the countries listed in the report were early adopters of modern espionage tactics that have become standard practice in cyberspace today.

"They recognized very early on the capabilities that leveraging cyber tools and tradecraft could yield," said Touhill. "This is not an overnight type of thing, it's part of a long-term strategic effort by each one of these countries."

China has been the subject of longstanding accusations of economic espionage by U.S. officials. A report by the U.S.-China Economic Security Review Commission in April detailed a multipronged strategy by Beijing to put Chinese companies at the heart of the U.S. technology supply chain. The report notes that major U.S. suppliers like Microsoft, HP, Intel, IBM, Dell, Cisco and Unisys relied on Chinese companies for more than half of their product shipments between 2012 and 2017.

In March, the Department of Justice indicted nine Iranian nationals and one organization for engaging in a years-long effort to steal $4.2 billion in research data and intellectual property from universities around the world, including the U.S.

Technology companies based in Russia (Kaspersky Labs) and China (ZTE, Huawei) have also been accused of conducting both intelligence and economic espionage on behalf of their host countries. U.S. officials believe all three companies are subject to laws in their home countries that require them to assist intelligence agencies when asked or store their data inside national borders, making them subject to Chinese or Russian jurisdiction.

In June, an ODNI official told FCW that a company's country of origin was one of the most relevant factors considered when assessing supply chain threats.

ODNI is worried these threats will only get worse as emerging technologies like AI, quantum computing and the internet of things mature and become more pervasive in the global marketplace.

"While next generation technologies will introduce a range of qualitative advances in data storage, analytics, and computational capacity, they also present potential vulnerabilities for which the cybersecurity community remains largely unprepared" the authors wrote.