Insider Risk in the High-Tech Industry

Introduction

The high-tech industry is defined by the development of technologies reliant on highly knowledgeable individuals and capital intensive processes. The tech race between geostrategic rivals has seen the deployment of aggressive tactics to access strategic competitor’s high-tech assets to aid economic and military development. In 2023, a former Samsung executive was indicted on suspicion of the theft of trade secrets then used to create a copy-cat factory in another country. The estimated value of the theft amounted to $230 million. Whilst the attempt to build the plant failed due to funding issues, the theft posed a serious threat to the country’s national economic security during a period of intensifying competition in chip manufacturing.

Key Facts

  • As of 2020, the FBI had been investigating over 1,000 cases of Chinese theft of U.S. technologies.

  • 55% of integrated circuit manufacturers report encountering counterfeit versions of their technologies.

  • The average cost of data breaches in the technology sector, including those committed by insiders, amounts to $4.66 million.

The Challenges: Competition, Turnover and Procurement

The centrality of high-tech organisations within the wider development of nations, puts the sector at the heart of modern backdoor geostrategic competition. This makes efforts of espionage rampant. It has been established by the Dutch General Intelligence Security Services, that foreign intelligence services are building networks of sources to acquire knowledge and technology within leading Western organisations. The case affecting ASML in early 2022 saw an insider bringing intellectual property to a foreign competitor, raising the alarm on the semiconductor industry and the risk posed by the potential loss of assets and talent. 

Moreover, the high-tech sector sees the highest rates of employee turnover compared to any other industry, standing at 13.2%. With departing employee data theft an increasing challenge in all industries, the high-tech sector is especially vulnerable to the challenge. Over 12% of departing employees admit to taking proprietary information with them to their new employer.  

Lastly, the industry see’s a large dependence on procurement and other forms of foreign investment. Highly sensitive information is published throughout procurement or public tendering processes. Moreover, a third-party relationship can be seen as a way in for external threat actors to legitimately earn the priviledged access to information and assets.

Insider Risk in the High-Tech Industry

The Impact of Insider Risk in the High-Tech Industry

Economic Costs: A Ripple Effect

Samsung’s loss of over $230 million in intellectual property is only one case in  a much broader trend affecting the high-tech sector. The reliance on proprietary information is a pivotal asset for growth. The growing challenge of IP theft harms the financial position of victim organisations, compromising high-value investments, competitiveness, and subsequent cost-effectiveness. 

Reputational Costs: Beyond Monetary Loss

Public perception plays a crucial role in the success of high-tech companies. Insider incidents that attract negative media attention can erode trust, driving away investment due to cost-ineffectiveness, and customers from products that may be seen as posing a risk to their privacy and safety. The unauthorised disclosures related to safety concerns regarding Tesla’s autopilot is one of many examples.

The Loss of Talent

Instances of insider risk can create a culture of mistrust and fear within the organisation, impacting employee morale, productivity, and retention. This can further exacerbate the financial costs associated with recruiting and training replacements for departing staff. If foreign competitors can save on the R&D process, more resources can be devoted to the influencing, coercing, or hiring of talented individuals who not only bring information with them, but their highly sought-after expertise too.

The Solution: Signpost Six

Addressing insider risk requires a comprehensive, tailored approach. Signpost Six offers specialised insider risk management services and insider risk awareness trainings designed to assist entities in navigating this complex landscape.

Our services are designed to identify and mitigate existing risks, but also to foster a resilient organisational culture that minimises future insider threats. While we can’t divulge all our strategies here, we assure you that our approach is holistic, data-driven, and customised to each organisation’s unique needs.

Conclusion

The high-tech industry is emerging as a crucial sector within broader geostrategic competition. Insiders are those best placed to compromise sensitive information and assets through their privileged access. However, with the correct safeguards, organisations can transform this challenge into their greatest strength. As the leader in insider risk management, Signpost Six stands prepared to partner with high-tech organisations, providing the tools and expertise to mitigate insider risks effectively. 

More Info?

Whether you want to start your own Insider Risk Programme or build awareness amongst your employees. Get in touch with us to today!

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