Stealing trade secrets
Lepasik
In the middle of the 6th century CE, two Christian monks smuggled silkworm eggs out of China with help from the Byzantine emperor Justinian. Shortly after that, silk factories popped up across the eastern Mediterranean, and China lost its monopoly on the silk trade.
Fast forward fourteen hundred years, in the middle of the Cold War, and states were still spying on each other's silk production—in addition to hundreds of other new enterprises. But it still isn't fully understood what role espionage plays in closing the productivity gap between rival countries, and by how much, according to a paper in the April issue of the American Economic Review.
Authors Albrecht Glitz and Erik Meyersson pried into recently released archives from the Stasi—the East German spy agency—to find out.
Figure 2 from their paper shows the relationship between industrial output in East Germany and the inflow of intelligence reports on two West German industries.
Figure 2 from Glitz and Meyersson (2020)
In Panel A, the dashed lines show the number of microcomputers and personal computers that East German companies were making from 1970 to 1989, indicated by the right axis. And the bars show pieces of East German intelligence, based on keyword searches in the Stasi records, indicated by the left axis. (Keywords Intel and Zilog are microprocessors, and keyword Mikrorechner is German for microcomputer.)
Similarly, in Panel B, textile outputs of polyester fibers and silk are captured by the dashed lines. The bars show the information collected by the Stasi on Polyesterfaser (polyester fiber) and Polyesterseide (polyester silk).
The tight relationship between output and intelligence suggests that East Germany was able to translate their state-sponsored espionage into significant economic gains in two very different markets. But to pin down the total benefits, the authors estimated the impact of 151,627 individual pieces of information on 16 sectors of the East German economy.
Overall, the Stasi’s spying program kept the country's productivity about 15 percent higher than it would have been without it, when compared with West Germany. The authors calculated that the total returns were roughly 10 billion euros a year.