A Parable

The Austrian Competitive Mechanical Engineering LLC, ACME, is a global leader in its area, located in Upper Austria. Consistent with good business practices, ACME reinvests a certain amount of its earnings in research and development to gain a technological advantage over its competitors. Recently it launched a new product line, Hyperspace-Aware Laser 9000, HAL 9000, the culmination of its experience augmented with new features enabled by machine-learning. Due to the unprecedented economic growth and the lucrative market potential of Atlantis, ACME plans to enter this market. However, Atlantis has a bad reputation for its undeveloped and ineffective protection of intellectual property. Two scenarios ensue: 

  • ACME wagers that entering Atlantis’ market, although economically attractive, is too dangerous from a competitive perspective and decides to forgo this opportunity, a decision likely to affect their long-time economic earning potential. 
  • ACME decides to sell HAL 9000 in Atlantis. The local competitor MegaCorp buys as many HAL 9000s as needed to reverse-engineer them to uncover their secrets. If MegaCorp succeeds, ACME’s competitive edge is lost, endangering its economic future.