"I can assure you that no American intelligence agency conducts industrial espionage against foreign companies to advantage U.S. companies," he said. "What we do is support the efforts of our own government, and that information is not shared with American companies."
Reports originating in Europe, especially France, that the U.S. is using signal intelligence capabilities as part of a program called Echelon to attack European companies to the economic advantage of U.S. companies "is simply not true," he said.
Another threat comes from the dozens of intelligence services in developing countries that have profited from the training they received from the Soviet Union, Eastern European countries and the CIA during the Cold War. The result of this history is that "the reservoir of professionally trained intelligence mercenaries is growing."
Other threats include terrorism, organized crime and inside operations carried out by disgruntled employees and hackers. Some of these groups are looking for the greatest amount of destruction, and an attack on the critical information infrastructure of the U.S. would satisfy that goal.
"Business needs to understand that the criminal and terrorist threat worldwide is changing and is now both more sophisticated and more dangerous than anyone would have thought," Gates said.
Vulnerabilities that all the different types of attackers exploit include open systems, plug-and-play systems, centralized remote maintenance of systems, remote dial-in and weak encryption. But he said companies can provide substantial information security protection for relatively low cost.
He suggested companies review security measures in sensitive areas of their operations such as research and development, talk to traveling executives who carry company laptops about using precautions to prevent theft and examine communications with overseas facilities with an eye toward installing commercially available encryption that is all but impossible to crack. The new algorithm recently approved by the U.S. Commerce Department, for example, is so strong that it would take an estimated 149 trillion years to unscramble, he said.
Gates also said company executives should limit physical access to sensitive data and programs and regularly change computer passwords.
"It's all obvious, but every one of you knows how many companies are lax in their actual implementation," Gates said.
A basic rule is to take time to identify company critical information, whether it is technology, a production technique, basic research and development, financial information or marketing strategy, and take steps to protect it.