Intangible Assets Are Embedded In U.S. Exports

First, it’s important to recognize that the initiative a company and its decision makers undertake to engage in exporting…products and/or services, are first, and foremost, ‘business transactions’ that are governed by a labyrinth of, probably well intended, but, intensely lobbied trade laws and regulations on both ends.

Most remember the politically relevant quip...attributed to political strategist James Carvell during Bill Clintons’ first presidential campaign, i.e., ‘it’s the economy stupid’!  Well, through the lens of this intangible asset strategist and risk specialist, business decision makers who elect to engage in exporting, would find it prudent to not lose sight of that reality, even while mired in the various processes, procedures, and anxieties necessary to execute exports, the act of exporting is a ‘business transaction’ and not merely regulatory (agency, department) compliance.

Second, even as it has become an undisputed economic fact – business reality that 80+% of most companies’ value, sources of revenue, and future wealth creation lie in intangible assets, IP, know how and competitive advantages, exporting is still routinely mis-characterized as (someimes presumed to be solely) an exchange of a companies’ tangible – physical goods and products.  Whereas, in most instances, IP, intangibles, know how and competitive advantages are integral to – deeply embedded in the (tangible, physical) goods and products being exported.  To not recognize this reality can, an frequently does, pave the way for companies to inadvertently relinquish or altogether lose their ‘real’ sources of value, revenue, and global competitive advantage.  Engaging in thorough – comprehensive ‘market entry planning due diligence’ can mitigate these types of risk.

Third, while a company engaged in exporting may regard compliance with relevant (U.S.) laws, processes, and procedures and the presumed agency-department oversight as being serious and worthy matters, it’s important to recognize that an international trading partner (company) may not hold their countries’ export laws and/or processes in a comparable light.  That is not stated to cast dispersion or disrespect on (a.) other countries’ export-import law regimes, or (b.) prospective trading partners.  Rather, it is offered to suggest some companies have found prospective trading partners or governmet trade representatives with utilitarian, egalitarian, or purely profit motives – interests in portraying compliance (with their import-export laws) conducive to each deal that comes before them.

Fourth, it’s essential that company decision makers literally and fully understand the products-goods they intend to export and ask the all important question, ‘are there any components, elements, or aspects of the product/goods that could conceivably constitute and/or be converted to ‘dual use’, that is, commercial and defense purposes.  Obviously, U.S. export laws (procedures, processes) fully address the concept of dual use.  But, in today’s go fast, go hard, go global nanosecond business transaction environment and ‘user friendly’ export compliance process, decision makers may not always fully grasp, recognize, or anticipate how their products – goods could be converted, by those so inclined, to nefarious uses, and if so, would cause irreparable and costly harm to a companies’ reputation, goodwill, image, and brand!

Michael D. Moberly  July 22, 2008  St. Louis  m.moberly@kpstrat.com ‘Business Intangible Asset Blog’ where attention span and action really matter!