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The worldwide economic picture may be far from rosy right now, but there is good news in some quarters at least. A Wall Street Journal story earlier this week declared that big US companies are now leaner, stronger, and more cash-rich than before the 2007 crash.
To get to this conclusion, the newspaper analysed sales, profits and employment over the past year of members of the S&P 500. “Many American companies have emerged from the economic crisis - the worst since World War II - leaner, more productive, and more profitable,” the story says. “They have lightened their debt burdens and many are flush with cash.”
The question is, what are they going to do with this surfeit of funds? Understandably, with the financial crash still such a recent memory and the global economy remaining shaky, many companies may find their newly-acquired habits of frugality are hard to shift. However, the WSJ analysis also uncovered an increase in capital spending in the past year, with investment in new plants and equipment on the rise. But these businesses are missing a trick if they do not use the opportunity to invest in IP and other intangible assets as well.
Intellectual property certainly has a higher profile today than it did five years ago, but it is still not as well understood or appreciated as it should be. Now that the good times are back - for big American companies at least - IP departments need to make the case that the time is right for some care and attention to be lavished on them. And there is no shortage of evidence to justify their case. Two very recent news stories - the multi-trillion dollar IP boost to the US economy, and the unstoppable march of Apple’s brand value - reveal the tremendous value-add that IP delivers. Meanwhile, the smartphone wars (and what may yet develop into the social media wars) show that companies without the necessary IP protection are highly vulnerable to attack.
Investing in IP does not have to mean going out and buying patents. It’s about developing quality portfolios and making sure that the in-house function is properly manned, as well as ensuring that IP strategy is aligned to overall corporate strategy, that there is cross-departmental IP-related communication, that monetisation and value creation opportunities are fully explored, and that overall IP performance is properly benchmarked. All that has to be funded. Those holding the purse strings need to be persuaded that while the cash is available, investing in IP is something that should not be postponed. It’s time to make the case.