Intellectual capital and economic espionage: new crimes and new protections
| DOI | https://doi.org/10.1108/13590790910973089 |
| Date | 17 July 2009 |
| Published date | 17 July 2009 |
| Pages | 245-254 |
| Author | Herbert Snyder,Anthony Crescenzi |
| Subject Matter | Accounting & finance |
Intellectual capital and economic
espionage: new crimes
and new protections
Herbert Snyder
Department of Accounting and Information Systems,
North Dakota State University, Fargo, North Dakota, USA, and
Anthony Crescenzi
Baldwinsville, New York, USA
Abstract
Purpose – Intellectual capital’s (IC’s) rising value in the production of wealth has been mirrored by
its increasing vulnerability to crime. Among these are the increasing frequency of cybercrime, the
intangible nature of IC which facilitates theft and the lack of legal remedies for the theft of IC. Taken
together, these factors have created a new environment in which IC is uniquely at risk from financial
crime. The purpose of this paper is to attempt to examine the efficacy in current legal remedies and
formulate suggestions for better protecting IC.
Design/methodology/approach – The analysis is conceptual, using frameworks drawn from legal
scholarship and traditional views of law-enforcement practice.
Findings – This paper explores the risks of crime inherent in IC and a distributed cyber environment
in greater detail in order to demonstrate that traditional legal remedies are largely ineffective to protect
IC property rights and that, given this policy environment and the nature of IC itself, prevention is the
only reasonable means for protecting IC.
Research limitations/implications – Conceptual papers offer an intrinsically different form of
evidence than empirical studies. Significant public debate prior to enacting legislation and subsequent
empirical testing of the paper’s propositions, if enacted into legislation, are strongly encouraged.
Practical implications – The paper includes implications for the development of legal protections
based on guarding sensitive information at its source, rather than traditional reactive policing and
legal actions after a theft has been committed.
Originality/value – This paper fulfils an identified need to propose useful and concrete legal
solutions that deal with the increasing importance of IC and the concomitant frequency of crimes that
involve its theft.
Keywords Intellectualcapital, Crime, Theft, Data security
Paper type Conceptual paper
Introduction
Intellectual capital’s (IC) rising value in the production of wealth has been mirrored by
its increasing vulnerability to crime. It is estimated that a majority of the productive
capacity of organizations is tied up in IC and even a significantly more conservative
estimate leaves IC as a major force in organizational competitiveness (Daum, 2001; Lev,
2001; Guthrie and Petty, 2000; Stewart, 1997). The move from tangible to intangible
assets as a major productive force has produced a number of challenges to
management and financial reporting. This shift has also resulted in a new vulnerability
to financial crime that organizations face as a result of their reliance on IC.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
IC and economic
espionage
245
Journal of Financial Crime
Vol. 16 No. 3, 2009
pp. 245-254
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790910973089
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