Korea's Tech Prowess Threatened by Industrial Espionage

It is no longer shocking that former and current employees of South Korean makers of electronics, cars, steel and ships have stolen their companies' technologies and handed them over to foreign competitors. It goes without saying that such actions constitute industrial espionage, which inevitably erodes the nation's international competitiveness.

Why do such grave crimes continue despite law enforcement agencies' crackdown? Maybe there are many reasons for the failure to prevent illegal technology transfers overseas. But a lack of workplace ethics, established systems for the prevention of industrial spying and stern punishment for those leaking technology are to blame.

The latest case was reported Thursday when prosecutors announced they arrested and indicted a former LG Electronics engineer for stealing and leaking flat-screen TV technology to a Chinese firm. After quitting the company in 2005, the suspect, identified as Jung, smuggled out computer files on the design of its plasma display panel (PDP) plant. Then he gave them to COC (Changhong-Orion PDP-Chaihong) of China and helped that firm build a PDP plant in Sichuan province.

Disgruntled former employees aided by current workers typically undertake such industrial espionage. A current LG employee and another ex-worker were also indicted for allegedly assisting Jung after he joined COC in February 2007 as a technology adviser. There is no doubt that the motive for their tech leak was money. According to the prosecution, Jung offered the technology in return for a $300,000 annual salary, an apartment and a car.

The suspects must have felt little guilt for their illegal activity, while LG Electronics claims the tech leak could bring about 1.3 trillion won in losses to the company. The nation's second-largest electronics maker after Samsung Electronics should have had tighter security systems to prevent the leak and strengthened workplace ethics education to stress the importance of tech security.

The company spokesman said only three makers ― LG Electronics, Samsung SDI and Matsushita of Japan ― had developed such PDP technology. LG must keep in mind that protecting technology from industrial espionage is more important than developing it since the nation's growth potential largely depends on it. Korea Inc. won't survive the intensifying international competition if companies in China and other emerging economies catch up with it.