Quantifying Trade Secret Theft: Policy Implications

CIGI Paper 253. Waterloo: Centre for International Governance Innovation.

27 Pages Posted: 26 Oct 2020 Last revised: 10 Apr 2021

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

Maria Ptashkina

Universitat Pompeu Fabra - Department of Economics and Business; International Centre for Trade and Sustainable Development (ICTSD)

Date Written: April 9, 2021

Abstract

In the modern data-driven economy, trade secrets are becoming a more important part of firms’ intellectual property strategies. For their part, governments worldwide have been introducing new legislation to broaden and toughen the protection for trade secrets citing estimates of the cost of trade secret theft on the order of 1 to 3% of the GDP of the advanced countries. For the United States alone, this would put the cost of trade secret theft on the order of USD 180 to 540 billion. This note considers the “proxy” approach that has been used to generate these widely cited estimates as well as the extent of evidence that actually supports these claims. It concludes that the value of cross-border trade secret theft is much smaller than is suggested by the proxy methodology and suggests a more appropriate methodology to estimate the value of this illicit flow. The note also advances a number of considerations that temper the concern over cross-border trade secret theft.

Keywords: trade secrets theft, intellectual property, economic espionage, disembodied technology flow, proxy

JEL Classification: K10, K11, K14, K22, K42

Suggested Citation

Ciuriak, Dan and Ptashkina, Maria, Quantifying Trade Secret Theft: Policy Implications (April 9, 2021). CIGI Paper 253. Waterloo: Centre for International Governance Innovation., Available at SSRN: https://ssrn.com/abstract=3706511 or http://dx.doi.org/10.2139/ssrn.3706511

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

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Centre for International Governance Innovation (CIGI) ( email )

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C.D. Howe Institute ( email )

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Maria Ptashkina

Universitat Pompeu Fabra - Department of Economics and Business ( email )

Barcelona
Spain

HOME PAGE: http://https://www.upf.edu/web/econ/phd-students

International Centre for Trade and Sustainable Development (ICTSD) ( email )

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Switzerland

HOME PAGE: http://https://www.ictsd.org/about-us/maria-ptashkina

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