Convergence vs. Counterfeiting

| 1 Comment | 0 TrackBacks
Imperial Capital's Report Covers Counterfeiting Risks, Layers of Remedies
 
Need another business case for practicing convergence? Think anti-counterfeiting and brand protection.

That's the conclusion we draw after reading a report of the same name by Jeff Kessler, managing director, institutional sales and trading, with Jay Beaghan, managing director, corporate finance, for Imperial Capital.

The report opens by delineating the scope of counterfeiting: from bad designer knockoffs sold by street vendors to fake pharmaceuticals passed off in Third World countries to counterfeit parts for military and electronic equipment to passports and credentials.

Today's counterfeiters include international gangs and terrorist operations. (Just this week, the Houston Chronicle is reporting on a check and money order counterfeiting operation that has clear links to Nigeria being investigated in a quiet neighborhood here.)

The business is lucrative: "The exact price tag attributed to economic loss due to counterfeiting has been debated--estimates range for $600 billion to over $700 billion, representing 7 percent-plus of the world economy," Kessler writes in his report.

By comparison, he asserts that a "scant $3-4 billion" in total industry resources is being spent to combat the spreading counterfeiting efforts.

The report goes on to examine counterfeiting hotspots and preventative technology that's in place or emerging, and describes the companies offering it. Throughout, Kessler reminds readers that "there is no single one, 'silver bullet' technology that addresses all anti-counterfeiting needs." That sentence is descriptive of most security efforts: it's a mix of technology, intelligence and expertise that leads to a more secure enterprise or entity.

That's why anti-counterfeiting measures present another case for thinking of convergence as collecting, combining and correlating data from many systems. Kessler's report covers a range of technologies, from RFID tags and DNA markers to tamper-evident wrappings to credentialing. The effects of counterfeiting range from creating brand degradation (poorly made goods or parts passed off as the real thing); public health risks (as counterfeit drugs circulate); terrorist threats (faked identities and credentials).

Preventing these consequences cut across all kinds of functional boundaries. Criminals are involved, which calls out for law enforcement expertise. Technological countermeasures might call for IT evaluation--but could have an impact on manufacturing and production processes that are the logistics experts' domain. Marketing and finance professionals must deal with brand, investor and public trust issues. All end users may find themselves adapting to new processes or employing new technology to thwart criminals.

Coordinating efforts across these areas sounds like convergence to us. And not just for Global 1000 firms: international criminals are targeting small and medium-sized businesses too, from their bank accounts to their intellectual property.

We often hear it's tough to get security initiatives funded because they don't seem to contribute to the enterprise bottom line. Some say it's difficult to attach hard dollars to incidents prevented. Yet it seems all too easy to total up the costs of stolen funds, goods, brand dilution, legal fees, etc. Thwarting counterfeits--even if that just means good credential management in your enterprise--is another reason for security professionals to be multi-disciplinary and business savvy.

# # #

For inquiries about Imperial Capital's Anticounterfeiting and Brand Protection report, please contact Jeff Kessler at jkessler@imperialcapital.com or his assistant, Jeanette Drew, at jdrew@imperialcapital.com.

Imperial Capital's Report Covers Counterfeiting Risks, Layers of Remedies
 
Need another business case for practicing convergence? Think anti-counterfeiting and brand protection.

That's the conclusion we draw after reading a report of the same name by Jeff Kessler, managing director, institutional sales and trading, with Jay Beaghan, managing director, corporate finance, for Imperial Capital.

The report opens by delineating the scope of counterfeiting: from bad designer knockoffs sold by street vendors to fake pharmaceuticals passed off in Third World countries to counterfeit parts for military and electronic equipment to passports and credentials.

Today's counterfeiters include international gangs and terrorist operations. (Just this week, the Houston Chronicle is reporting on a check and money order counterfeiting operation that has clear links to Nigeria being investigated in a quiet neighborhood here.)

The business is lucrative: "The exact price tag attributed to economic loss due to counterfeiting has been debated--estimates range for $600 billion to over $700 billion, representing 7 percent-plus of the world economy," Kessler writes in his report.

By comparison, he asserts that a "scant $3-4 billion" in total industry resources is being spent to combat the spreading counterfeiting efforts.

The report goes on to examine counterfeiting hotspots and preventative technology that's in place or emerging, and describes the companies offering it. Throughout, Kessler reminds readers that "there is no single one, 'silver bullet' technology that addresses all anti-counterfeiting needs." That sentence is descriptive of most security efforts: it's a mix of technology, intelligence and expertise that leads to a more secure enterprise or entity.

That's why anti-counterfeiting measures present another case for thinking of convergence as collecting, combining and correlating data from many systems. Kessler's report covers a range of technologies, from RFID tags and DNA markers to tamper-evident wrappings to credentialing. The effects of counterfeiting range from creating brand degradation (poorly made goods or parts passed off as the real thing); public health risks (as counterfeit drugs circulate); terrorist threats (faked identities and credentials).

Preventing these consequences cut across all kinds of functional boundaries. Criminals are involved, which calls out for law enforcement expertise. Technological countermeasures might call for IT evaluation--but could have an impact on manufacturing and production processes that are the logistics experts' domain. Marketing and finance professionals must deal with brand, investor and public trust issues. All end users may find themselves adapting to new processes or employing new technology to thwart criminals.

Coordinating efforts across these areas sounds like convergence to us. And not just for Global 1000 firms: international criminals are targeting small and medium-sized businesses too, from their bank accounts to their intellectual property.

We often hear it's tough to get security initiatives funded because they don't seem to contribute to the enterprise bottom line. Some say it's difficult to attach hard dollars to incidents prevented. Yet it seems all too easy to total up the costs of stolen funds, goods, brand dilution, legal fees, etc. Thwarting counterfeits--even if that just means good credential management in your enterprise--is another reason for security professionals to be multi-disciplinary and business savvy.

# # #

For inquiries about Imperial Capital's Anticounterfeiting and Brand Protection report, please contact Jeff Kessler at jkessler@imperialcapital.com or his assistant, Jeanette Drew, at jdrew@imperialcapital.com.

No TrackBacks

TrackBack URL: http://www.securitysquared.com/cgi-bin/mt/mt-tb.cgi/212

1 Comment

A remedy to the counterfeiting problem is in the use of botanical DNA markers infused in the composition of materials and products These markers can then be used to authenticate any product or item to ensure it is 100% real. A company like this one- Applied DNA Sciences(OTCBB: APDN) just signed an 8.7 million dollar deal with a luxury brand for botanical DNA authentication services to protect against counterfeiting.

http://www.proactivenewsroom.com/apdnblog/bid/53283/Applied-DNA-OTCBB-APDN-The-Big-Contract-8-7-million

Leave a comment