Predicting Corporate Intelligence Agencies in the 1960s

January 24, 2017

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The recent tumult around the emergence of a dossier suggesting salacious things about President Donald Trump has cast light on a series of for-profit intelligence firms with names like “Orbis International” and “Fusion GPS.” Such organizations are part of a huge industry providing information, analysis, and “decision advantage” for companies, investors, political parties, and often government agencies. It is a giant industry, and one that was predicted with remarkable insight in 1966.

Bill Fair

Every time one of us applies for a car loan, a mortgage, or myriad other modern conveniences, we agree to a credit check. One of the major providers of this service is Fair, Isaac and Company (NYSE: FICO), which provides the ubiquitous “FICO score,” one of the analytic building blocks of modern consumer lending. Earl Isaac and William “Bill” Fair founded this California-based company in 1956. Fair, an engineer, with degrees from Cal Tech, Stanford, and Berkeley, was a pioneer in “statistically-based decision processes and automated processing technologies.” He was also ahead of his time in thinking about something else: private sector intelligence.

In 1966, Bill Fair, using his company affiliation, published an article in Management Science that was a fascinating exercise in predicting the future. In “The Corporate CIA—A Prediction of Things to Come,” Fair argued that changes in markets and technology would both enable, and make likely, the emergence of private sector equivalents to national intelligence services. He argued that there would “…soon be a confluence of the technical capability, manpower and motivation for corporations to know their competitors much better than they do now.” Essentially, he predicted the modern industries of competitive intelligence and business intelligence as well as many of their technological undertakings that are today being lumped under the sobriquets of “analytics” and “big data.”

What Fair Got Right

Fair pointed to three drivers pushing toward the emergence of a “corporate CIA.” Two were technological in nature: the growth and development of computers for information storage and retrieval and the increase in the availability and capability of sensors, microphones, and other information collection technologies. While this all prefigured the rise of modern cyberspace, he recognized that the increased availability of data, better availability of mechanisms to detect and collect that data, and proliferating computers to process, analyze, and hold such data indefinitely all pointed to a private sector intelligence function. While Fair may not have predicted the rise of the Internet and cyberspace, he clearly understood the implications of technology for data creation, collection, retention and analysis in general.

Fair’s “third development…is that of conceptual models which are useful in dealing with truly complex situations.” He stated that the idea of modeling the competition would become a very important driver of the corporate CIA: “By definition, a corporate CIA is an activity devoted to gathering information and making models whose center of attention is the competitor.” Fair argued that this development would enable a new kind of competitive analysis. He wanted to acknowledge the work of “operations analysts, market researchers, industrial engineers, legal counsel, etc.” but also to differentiate the role of the corporate CIA, because while it may conduct similar analyses, there remained an important difference: The corporate CIA role would “…include research, design, production, personnel, sales, corporate development, etc., etc., but always of the competitors’ organization.” In other words, he predicted the growth of modern competitive intelligence.

What Fair Missed (Or Partially Missed)

The biggest thing Fair missed, or perhaps more accurately, could not have imagined, was the massive privatization of intelligence work of the government variety. National security intelligence has become the realm of both large and small contractors. These include everything from defense behemoths to small boutique organizations, all often staffed with former government intelligence officials.

Fair acknowledged that there would be ethical and perhaps legal challenges in this new world. He went so far as to suggest that some portion of those reading the article would disapprove or be skeptical. He said that some might “…become concerned with how the potential ill effects of corporate intelligence activity can be controlled.” Related to this, Fair did not suggest how such corporate intelligence functions might be targeted at adversaries other than just competitors.

Recent years have shown examples of private sector firms and infrastructure owners developing intelligence functions that address some of the same adversaries that governments face (terrorists and nation-state actors) both in physical and cyber space, as well as corporations using intelligence functions to target their own workersunions, and “adversaries” like protestors.

Either way, it is quite clear that Bill Fair was well ahead of the curve in thinking about the emergence of competitive intelligence in the private sector, but also in thinking about the technological and intellectual drivers of such an emergence. Next time you see your FICO score, remember that one of the founders of Fair, Isaac and Company was also a luminary in a field other than consumer lending: intelligence futurism.

 

Brian Nussbaum is an assistant professor at the College of Emergency Preparedness, Homeland Security and Cybersecurity (CEHC) at the University at Albany.  He is also a cybersecurity fellow with New America, an affiliate scholar with the Center for Internet and Society (CIS), and a senior fellow with the Center for Cyber and Homeland Security (CCHS).

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