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Fri, May 27, 2022 | 01:35
Manufacturing
Korean tech companies lose big in age of cyberattacks, employee poaching
Posted : 2021-07-26 16:56
Updated : 2021-07-26 18:18
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                                                                                                 gettyimagesbank
gettyimagesbank

111 attempted theft case reported from 2016

By Yi Whan-woo

Korea's tech industries are increasingly becoming the target of technology and intellectual property theft that has been growing in sophistication and harmfulness.

The targeted industries include semiconductors, large batteries and cars, which are all pillars of Korea's economy and therefore the leak of related trade secrets is considered a threat to the national interest.

With industrial espionage, competitors' poaching of skilled employees, cyberattacks and other forms of theft being rampant, the world has been introducing stricter rules to ban theft of competitors' technologies across borders.

Tech industries at the same time are growing ever more competitive, as countries push for self-sufficiency amid the pandemic and also de-globalization in the context of the U.S.-China trade war.

Against this backdrop, overseas competitors approach Korean conglomerates' key scientists and engineers and attempt to lure them to higher-paid jobs at firms that seemingly have no link to their professions.

Many of these firms are paper companies set up by the competitors to exploit loopholes in international regulations on intellectual property, experts and intelligence officials said, Monday.

Those regulations are aimed at preventing illegal and unethical activity by banning hiring of researchers among rival companies immediately after they leave their jobs.

"This was the case of a battery maker in Europe," the National Intelligence Service (NIS) said, citing an attempt to hire a chief engineer who worked at a conglomerate here as a consultant.

Industrial espionage and cyberattacks are still favored forms of theft, with the targets changing from conglomerates to their subcontractors, many of them small- and medium-sized enterprises (SMEs) that are often ill-equipped in terms of security and management.

                                                                                                 gettyimagesbank

To estimate the damage to the country, the NIS for the first time compiled the number of cyber theft cases from 2016 to the first half of 2021.

The cases added up to 111 and the estimated financial damage amounted to 21.44 trillion won ($18.6 billion).

Of the 111 cases, 41 were associated with semiconductors and electronics, 17 with mobile and TV screens and 14 with shipbuilding.

The automotive and information and communications technology (ICT) sectors both reported eight attempts each.

By company, 66 cases were related to SMEs, 33 to conglomerates, eight to universities and private research institutes and one to a public institute.

The serious nature of cyber theft was demonstrated through the fact that 35 of the 111 cases concerned national security.

"This makes it more critical to help companies, especially the small ones, to enhance their security systems and management of human resources against attempted thefts that are becoming more sophisticated than ever," an industry source said.

In March and April, the NIS together with the Suwon District Prosecutors' Office, which spearheads the prosecution's efforts on technology protection, held a meeting to discuss possible countermeasures.

A second source called for tougher punishment of violators, noting they are subject to up to three years in prison but generally receive shorter sentences in court rulings.

"This is apparently a slap on the wrist and will not help in weeding out the crimes," the source said.

It added the maximum jail term for those who breach laws on intellectual property should be higher than three years.
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