ECONOMIC INTELLIGENCE

THE STAKES OF ECONOMICS INTELLIGENCE :

The crumbling of the soviet communist block and the end of the face-off between two dominating ideological entities signal the advent of a new economic geography of the world. The dimension of financial and business economic activity has taken unequaled proportions and the pressures of international competition are spreading to the whole of the business community. As of now, cooperation-competition relations are developing between and among various nations, economic blocks (NAFTA, European Union, Southeast Asia), regions and companies, to the tune of a complex logic which at times is contradictory.

In this context, the strategic efficiency of companies relies on the deployment of vast economic intelligence measures which become major leverage towards economic performance and employment.

Economic Intelligence is becoming a real tool of knowledge and continuous understanding of market realities, of competitor techniques and thinking methods, of their culture, intentions and their capacity of carrying them out. It defines itself as an overall set of coordinated actions for the research, treatment, distribution and protection of information useful to economic actors, and obtained legally.

DEFINITION :

Competitive Economic Intelligence (CEI) is a unifying craft of proven techniques both ancient and modern. Its goal is to acquire, validate, treat information (useful) to transform it into revealing information, counsel or recommendation destined to decision making. Its main objective is to render companies engaged in international or national economic competition more "intelligent".

In proper, though late, recognition of a highly professional activity, Mr. Edouard Balladur, Prime Minister at the time, decided in April 1995 to create a Committee for Competition and Economic Security (CCES). It would be directly connected to Matignon (The PM's Office), and considered an event as highly important to the affairs of France as decentralization. It's objective was to set up a national system of economic intelligence.

In fact, possessing a timely and decisive asset during confrontation or negotiation, such as knowledge others do not have, or else, would prefer to keep a secret, has been the dream of each and every businessman. This competitive edge could be provided by the professional involvement of the CEI, whose practices would include complete mastery of methods and sufficient means for observation, acquisition and treatment.

The core of the methodology lies in outwardly expressing strategic or tactical priorities, noticing clearly the missing bits of information to acquire (or identifying elements to protect) and establishing watchtower directives or actions to be undertaken and applied. The means- informatics and telecoms - are part of the methodical processing of variable amounts of data and useful bits of information, known, observed or discovered internally or externally; as well as their interpretation, validation, synthesis and communication at just the right time.

It is to be noted in fact that the techniques employed by the CEI get closer and closer to those globalized and multi-applicably used in the acquisition of data, observation, reconnaissance, elaboration of synthetic summaries and their transmission to decision making organisms, either in the military (awareness and knowledge of the battlefield, electronic war, mission preparation, C31, etc…) or in civilian life (geographical information system, geo-marketing, vehicular traffic, etc…).

It is under this aspect that CEI must be considered, i.e., as a discipline relying on experts, of strong general knowledge, able to speak several languages and conceptualize at a high level, rather than a panoply of information acquisition techniques using any and all possible means available.

ECONOMIC INTELLIGENCE IN THE WORLD

In the present context of global economic competition, the analysis of foreign economic intelligence systems allows us to understand why market economies produced better high-performance systems for strategic information management than others did. Economic intelligence was developed along historical and cultural lines in accordance with various basic forms found in Germany, Japan, the US or Sweden.

German know-how in strategic management of information comes, above all, from the historical growth of Germany's foreign trade. Today, the flow of information converges on a strategic center characterized by a web of interests gathering banks, big industrial groups and insurance companies. Thanks to their outside contacts, German unions are very active defending the country's economic interests. The consensus around the notion of national economic interests constitutes one of the main cultural assets of German economic performance.

Using a similar logic, the Japanese constituted their industrial and commercial apparatus on the basis of intensive use of economic information in the service of national independence. Japan's economic competitive edge rests upon a common cultural understanding of the need for information. In Japan, the 'MITI' (Ministry for International Trade and Industry) is superceded by the 'JETRO' (Japan External Trade Organization), which disposes of more than a hundred offices spread in more than 60 countries to promote trade, gather information, and import new technologies into Japan.

Japan presents itself as a dynamic culture able to understand the importance of secretly sharing information, characterized by a constant vigilance. After the defeat of 1945, the new national objective became the economy. The Japanese have therefore developed sophisticated methods to serve long term strategy and prospective thinking for 10, 20, and 30 years, thus favoring the future rather than immediate profit.

Multiple organizations connected by networks are dedicated to this task: MITI, intelligence services, federations such as KEINDAREN (institutions, banks, unions) or NIKKEREIN (Employer organization), and trade companies (Sogososha). Japan has put in place an international strategy for the transfer of technology: patents, teams, laboratories, alliances, buyout of small businesses in the prospect of acquiring dynamic research teams, great research programs. Japan possesses a great force: the culture of collective information is taught and developed in the school system. An important difference is to be noted here with France, where a spirit of competition is encouraged to the detriment of teamwork. Certain people go as far to say that only business schools are prone to teach or attempt to train towards the idea of group work.

The country of Japan also benefits from the protective screen created by its unique language and writing.

The American economy disposes of a rich and diversified economic intelligence system. But contrary to other countries, the logic behind this system is essentially individualistic. Born out of business policies in the fifties, economic intelligence in the United States has for a long time remained a tool for competition on the domestic market. The current debate relative to the elaboration of an "economic security doctrine" for the defense of American industry and labor, attests to a major evolution towards a collective "public-private" management of national interests. The United States disposes of a tight web around numerous databases in existence as well as an efficient lobbying system. President Clinton instituted a powerful, federal zone of operation on economic issues. He surrounded himself with three committees of equal importance: National Security, Economy, and Domestic affairs. Each of these committees is composed of a Secretary of State, a small team of civil servants, and is run by an Assistant to the President. The task of these committees is to make sure information flows properly throughout all channels of the administration.

The United States is more advanced on the technological front. Internet is thoroughly developed and companies use it abundantly whereas in France it is barely put to use.
In addition, the country possesses a fairly important past experience in the area of Intelligence, as is testified by the CIA. This institution has even developed software used by more than 10, 000 companies world wide, which researches information automatically on the internet, sorts it and distributes it to concerned departments.

In the same manner that the United States is advanced technologically, access to information is more readily available there than in France. For example, company balance sheets and financial results available in France after paying a certain fee, are free and can be found on the internet site "Edgar.com" for all companies quoted on the Stock Exchanges.

In Sweden, symbiosis between companies and the government is illustrated by a series of national meetings, whose objective is to elaborate an open economic information strategy to benefit the performance of the Swedish economy.