Commentary: Shadow World

By Edward H. Baker  |  Posted 05-01-2006

It seems that the pirates and counterfeiters of goods and intellectual property are moving up the corporate food chain—quickly. The New York Times reported this morning that a large, well-organized and very (let's admit it) entrepreneurial shadow-company has been pirating the products of NEC Corp. Not just stuff NEC already makes, mind you: This group has been setting up, even outsourcing, whole research and development operations to invent and build new products, then selling them as if they had been made by NEC. They even went so far as to print fake NEC business cards for their salespeople. What I can't figure out is why they didn't simply start a real new company.

One can only wonder how far this fake enterprise went with its imitation of a real corporation. Does it have departments for human resources? Finance? Legal? Is it's IT strategy well aligned with the business strategy? Does the CEO make a ridiculous amount of money? If you can fake an NEC, then how about a Microsoft? An IBM? A General Motors? Who knows? Maybe a parallel GM could actually make money?

Someday the U.S., the E.U. and other governments, as well as all the companies so desparately eager to do business in China, will get serious about pressuring the fast-growing giant to quash the rampant piracy it currently ignores. I hope they do so before it's too late. Otherwise, pretty soon, I'll probably be able to buy shares of this operation on Nasdaq.

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