Intelligence has been increasingly privatized during the past decade. The number of large and medium-sized corporations, banks, financial institutes, political and economic, academic and non-academic think tanks dealing in Intelligence, has grown at an astonishing speed. The need for and volume of economic Intelligence has grown at the same pace. According to the CIA, 40 per cent of its collection and analysis in the mid 1990s concerned economic matters4. Since the Primakov era, its Russian counterpart has also placed a high priority on economic Intelligence, and the same trend is evident in most Intelligence agencies, especially in Germany, Japan and France. Large companies often invest more capital and human effort in Intelligence than small nations.
The reasons for this development are obvious: most nations, especially small ones, are vulnerable to external pressure and rapid changes in the world. Economic sanctions, financial instability, flow of raw materials, speculation on the local currency, and various types of dependence, however necessary, present potential dangers. Even unintentional economic misconduct by a large neighbouring nation, resulting, for example, in lost market shares, could become a serious danger. By the same token, companies and other economic factors are under pressure to interpret and evaluate their environment.
The link between economy and security has therefore become stronger. This can be exemplified in several ways: prosperous nations today are more inclined to be peaceful, since prosperity is tied to economic interdependence, and is too valuable to risk. A good economic performance thus creates stability, and enhances the survival of democracies, the most obvious example being North and South Korea.
Economy will continue to influence security policy in the future. It will be much safer and more effective for developed nations to use economic instruments to achieve security policy goals, and this will also place more demands on economic Intelligence.
Economic security has not often been addressed in the western media, though the debate has been quite strong in Russia. There are several reasons for this. The most important is that economic security can be interpreted differently depending on the level of society: in terms of personal security, which was severely damaged during the transition period, security of supplies and provisions, which is often in danger in some parts of Russia, the nation´s security and economic survival, and, finally, its role on the world.
Economic Intelligence will become more internationalized and transparent in the future. The necessity for speedy reaction will increase as economic threats and situations which require a quick response appear without warning. As a result of this, national, traditional Intelligence may become less useful and effective, except in military matters. These new, rapidly changing threat dimensions do not allow as much time as before for thorough analysis and decision-making. As Francesco Cossiga5 has pointed out, the mix of private and governmental actors, and the question of offensive and defensive Intelligence, present another problem. In the future, not only the threats, but also the actors, will become more indefinable. Economic, political, or military targets in an information warfare attack will be more indistinguishable, easier to disguise, and harder to oppose. The Russian threat, as expressed in its 1993 Military Doctrine, to use any kind of retaliation, including nuclear arms, in response to a massive IW attack demonstrates the potential future dangers. A clever hacker with sufficient computer power could quickly close down a small country economically, and severely damage sectors of society in a larger one. A Swedish hacker recently succeeded in paralyzing a major part of Florida's rescue service.
We cannot escape new and increasing threats to society, and we are bound to become more dependent on high-tech solutions. What we can do is use Intelligence to better understand the nature of these threats, and build scenarios to predict them and to prevent hasty and unpremeditated counteraction.
* Reflections on the topics adressed at the Round Table "Intelligence and national security at the beginning of the 21st Century", Dubrovnik, Croatia, October 27-28, 2000.
1 See e g Betts."Analysis, War and Decisions" World Politics, Oct 1978
2 Herman."Intelligence in Peace and War", Cambridge University Press 1996
3 This part largely relates to conclusions in the FOA study: "Intelligence in Peace Support Operations" by Eriksson, Rekkedal and Strömmen
4 Colby:"Reorganizing Western Intelligence", from Intelligence and the New World Order,Potsdam 1996.
5 Cossiga: "The Economic Intelligence Services", National Security and the Future, vol 1, spring 2000.