Michael D. Moberly May 29, 2012
Are company’s intangible assets, as producers (sources) of value, revenue, competitive advantages, and ‘building blocks’ for growth, sustainable? Being an intangible asset strategist and advocate, I believe this is an important question, particularly now, as we’re in the midst of the knowledge (intangible) asset based global economy and the first time in corporate governance history in which over the past decade, conservatively speaking, 65+% of most company’s value and sources of revenue evolve directly from intangible (non-physical) assets, rather than tangible (physical) assets.
Based on my experience in the intangibles arena over the past 20+ years, I am inclined to say the most correct answer to the question is, a very big ‘it depends’! As in most things intangible there are various points to consider, among them being…
- the contributory value and sources of revenue intangible asset can deliver are seldom indeterminate, due in part to the fact that protections and risk mitigation afforded to intangible assets (aside from intellectual property, i.e., patents, trademarks, copyrights, and under very strict circumstances, trade secrets where enforcement assistance is available through federal and state authorities) are solely dependent on the holders’ own initiative.
- today’s global business (transaction) environment is extraordinarily competitive, very predatorial, and laden with persistent, asymmetric, and sophisticated risks and threats wherein global adversary’s possess capabilities to execute strategies to misappropriate, diminish, and/or undermine an assets’ value and competitive advantage almost instantaneously.
In their fine Deloitte report titled, ’The Economic Role of Intellectual Property’, authors’ Noonan Haque and Greg Smith identify and describe the ’key issues’ knowledge-based company’s confront:
- rapid R&D breakthroughs
- diffusion of knowledge, information, and data, and
- increasingly abbreviated asset life (value, functionality) cycles.
I have found the following very useful exercises for management teams, c-suites, and boards, i.e., identify, design, and assess…
- strategies to exploit the assets that best fits the company, industry sector, culture, innovativeness, resources, and strategic business plan.
- strategies for asset management, stewardship, oversight, contributory value, and risk monitoring to strengthen and lengthen the assets life, value, and functionality cycles.
- strategies to ensure the production, acquisition, utilization, and exploitation of the company’s (intangible, IP) assets are aligned with the company’s core business mission.
Those engaged in business (IP, intangible asset) management but, remain unfamiliar with the above exercises or dismiss their relevance are certainly, in my view, leaving substantial potential value, sources of revenue, and growth opportunities ‘on the proverbial table’ and otherwise doing a significant disservice to their company and/or client!
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