The Role of Intellectual Property in economic development

October 29, 2020

IP is a powerful tool for economic development and wealth creation that is not yet being used to most effect in all countries, particularly in the developing world. Intellectual Assets are considered the most powerful assets by some of the world’s largest and popular companies, based on their number of annual filings. Intellectual property such as patents, trademarks, copyrights, or trade secrets, are intangible assets which are now fundamental for many companies and attract venture capital.

IP assets (IPAs) are collections of intellectual properties – patents, trademarks, copyrighted works, industrial designs, geographical indications, trade secrets – that are strategically selected for their business value. IP assets have economic value because of their ability to elevate the value and financial return from technologies, products and services.

“Intellectual assets play important role in developing innovation. Licensing protected inventions to other firms gain attraction from external financiers and venture capitalist. Most of the firms also use their protected inventions as bargaining chips in negotiations during licensing and cross-licensing agreements.

Licensing of IP can also help companies increase their cost-effectiveness by either lowering their costs or gaining access to goods. Nowadays to support their budgets and to sustain continued education and research, universities also use IP assets.”

IP is effectively being used worldwide by even small and medium-sized enterprises. The potential in original development and amassing of IP assets in key areas are increasing in developing countries and help businesses partake in technology transfer agreements, entice joint ventures and grow into new regional markets. Corporate valuation is maximized in merger and acquisition contexts by IP assets. When companies merge, IP assets such as patents, trademarks and copyrights add meaningfully to real and perceived value.

IP assets stimulate and aid to generate revenues from product sales and licensing royalties, appeal high-value foreign direct investment (FDI) and joint ventures, assist retain and inspire technical staff, encourage research and development (R&D) based industries and create employment, sustain educational and research institutions, endorse funding for R&D, which offers and improves needed technologies and products, offer bargaining power in technology transfer negotiations, assist to gain access to goods and technologies through licensing agreements.

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