Tech and innovation start-ups and small businesses in the UK are at high risk of espionage, a top London lawyer has warned.
Following MI5’s warning over Chinese espionage infiltration this week, Mark Jones, Partner at law firm Payne Hicks Beach, said: “It is an unusual move for the Five Eyes Alliance, which includes the head of MI5 and counterparts from the US, Canada, Australia and New Zealand, to talk openly about the risks of commercial espionage on behalf of China. The move underlines the significance of the threat and the need to make business aware of that threat.
“No longer is big business the focus. Instead, small start-ups working in technology and innovation are the focus of hostile action. MI5 estimates that tens of thousands of UK companies could be at risk and that suspected Chinese agents have approached over 20,000 people in the UK over professional networking sites in order to try and obtain sensitive information.
“Businesses need to be on high alert and would be wise to undertake risk assessments to assess the level of threat their business may face and implement robust measures specifically tailored to address the risks of espionage and theft of trade secrets.”
MI5 has publicly warned businesses to protect themselves against Chinese hackers amid a sharp rise in aggressive action by foreign powers.
Those involved in new technologies such as artificial intelligence, quantum computing and synthetic biology are being told to take action to protect their intellectual property.
As well as cyber security, firms are being warned to be aware of new investors if they are not sure where their money has come from.
Entrepreneurs can end up signing contracts that see their intellectual property taken offshore and lost for good, warned MI5 and intelligence services across the Five Eyes alliance, with the UK, US, Canada, Australia and New Zealand all issuing similar advice, particularly to start-up businesses in emerging technologies.
Mark Jones added: “Given this growing concern about the activities of foreign spies and the potential interference with our institutions, businesses need to mitigate the risk.
“The risk is not new. In July 2023 the Intelligence and Security Committee highlighted that China was intent on interfering with the government and seeking to influence political thinking across all levels. Tackling the risk requires joined-up thinking from MI5, the Secret Intelligence Service, GCHQ and others. Thorough security vetting is a must as is ongoing monitoring.
The risk is widespread and an issue businesses also need to consider at board level. The threat is not just from people inside a business but also from cyber-attacks. Steps should be taken to guard valuable intellectual property and technology and conduct thorough due diligence on employees and investors. Understanding the risk is at the centre of being able to create an effective strategy to address the risk.”
“Perhaps, the most fundamental task to be done is to realise the risk exists in the first place.”
As well as the international advice, there is guidance drawn up by the protective security arm of MI5 and part of GCHQ that will be made available for businesses in the UK.
It covers areas including investments, supply chains, travel, IT networks and cloud computing.
The number of investigations by the UK intelligence service into Chinese activity of concern rose seven times between 2018 and 2022.
