First, it’s important to recognize that the initiative a company’s decision makers undertake to…transact-execute exports of their products and/or services, are indeed ‘business transactions’ that are overseen by a labyrinth of intensely lobbied trade laws and regulations on both ends of the process.
Most readers remember the campaign 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 the exportation of (their goods and/or services) would find it prudent to not lose sight of Carvell’s perspective, albeit applied to a presidential election campaign context.
Export management teams are seemingly mired in…a multitude of processes, procedures, and now, what one could correctly define as anxieties emanating from the ‘slippery slopes’ of U.S. trade policy, i.e., which the relevant agencies, politically tout as being necessary to achieving a more competitive and lucrative end game, ala a more level trading field. The variously blurred and political (trade) rhetoric not-with-standing, the frequently expressed adage relative to ‘trade wars’ is ‘short term pain is preceded by long term gain’. Regardless, structuring and executing what are assumed to be lucrative and competitive exports, the act of exporting, make no mistake, manifest as distinct ‘business transactions’. And, as conveyed consistently at this blog, intangible assets are in play in most every business transaction. https://kpstrat.com/wp-admin/post.php?post=162
Second, it is an undisputed economic fact – business reality…that 80+% of most companies’ value, sources of revenue, competitiveness, and future wealth creation today, lie in – emerge directly from intangible assets, i.e., various forms of intellectual, structural, relationship, and competitive capital.
The often times proprietary know how and commercialization tactics applied to…produce asset value, sources of revenues, and competitive advantages from the intangible assets embedded in U.S. exports, are frequently presumed – misunderstood to be solely an exchange of a companies’ tangible – physical goods and products.
In a vast majority of trade – export circumstances…intangible assets, i.e., know how and competitive advantages, etc., are integral to – deeply embedded in the (tangible, physical) goods and products being exported. To not recognize this reality can, and frequently does, pave the way for companies to inadvertently relinquish or render their ‘real’ sources of value, revenue, and global competitiveness all-the-more vulnerable to compromise. Engaging in thorough – comprehensive ‘market entry planning due diligence’ can mitigate most such risks.
Third, company’s engaged in exporting may regard...compliance with relevant (U.S.) trade – export laws, 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 reality is not offered…as (a.) unsubstantiated embellishment, or (b.) with parochial-agenda driven intentions, or (c.) to cast dispersion or disrespect on other countries’ export-import law regimes, or prospective trading partners. Rather, it is offered to bring operational level clarity to exporting and intangible assets, i.e., many companies have found prospective (foreign) trading partners or government trade representatives with utilitarian, egalitarian, or purely profit motives – interests insofar as how they may portray compliance (with their countries’ import-export laws) to render them conducive to each transaction that comes before them.
Fourth, it’s essential that company decision makers fully understand…the products-goods they intend to export, and ask these essential questions…
- are there any components, elements, or aspects of the product/goods that could conceivably constitute and/or be converted to ‘dual use’, that is, other than purely public commercial purposes and not terroristic or acts of aggression.
Should such risks materialize adversely…there would potentially be irreversible and extraordinarily costly reputational risk that would manifest at keystroke speeds. Yes, 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 processes, decision makers may not always fully grasp, recognize, or anticipate how their products goods, and/or services may be subject to (dual use) conversion, by those so inclined or trained in nefarious uses.
My counsel to U.S. companies engaged in exporting is…the minimal time taken to fully explore whether…
- there any components, elements, or aspects of the product/goods that could conceivably constitute and/or be converted to ‘dual use’, that is, other than purely public commercial purposes and not terroristic or acts of aggression, has lucrative payoff’s.
Michael D. Moberly (This post was originally published on July 22, 2008 – it underwent substantial revision on September 25, 2018.) St. Louis [email protected] ‘Business Intangible Asset Blog’ (since May 2006) https://kpstrat.com/blog where one’s attention span, business realities, and solutions converge!
Readers are invited to explore other posts, papers, and books I have published at https://kpstrat.com/books/