Memorandum submitted by Intellectual Assets
(IA) Centre
FORWARD: THE
INTELLECTUAL ASSETS
(IA) CENTRE
The IA Centre exists:
"To assist Scottish businesses to maximise the
economic potential of their intellectual assets".
The underlying aim of the IA Centre is to develop
the market by encouraging the eventual emergence of a strong private
sector demand and supply for IA services.
To achieve this, the IA Centre acts as
a catalytic and evangelising body that is setting out to develop
a high profile as a "Centre of Excellence" in intellectual
assets (IA) issues relating to business and economic development.
Its aim is to be seen as a resource that complements and adds
value to the current and future activities of both public and
private sector intermediaries; it seeks to be the "place
to go" for impartial advice on IA management.
THE IA CENTRE:
— Raises Awareness & Understanding
of IA, their value, identification, protection, management and
exploitation for business benefit; — Demonstrates
how IA impact upon the development of strategy, products, processes,
services, markets and supply and distribution channels.
THE IA CENTRE
DELIVERS THROUGH:
— Educating about IA via events,
training, seminars, and information provision. — Providing
Tools to answer the questions about IA-why they are important
to all businesses, how to identify, how to assess and to record
IA, how to manage IA and ultimately how to extract additional
value from IA
THE AIMS
OF THE
IA CENTRE ARE
TO:
— Guide, Direct and Signpost
Scottish companies to suppliers of IA management products and
services. — Encourage the development of a strong
private-sector-led supply of IA management products and services.
— Develop Scotland's international
profile as a leading exponent of IA management and exploitation.
The IA Centre is sponsored by the Scottish
Government and is jointly owned by Scottish Enterprise and Highlands
and Islands Enterprise.
1.0 INTRODUCTION
1.1 In response to the general invitation
to interested parties from the House of Commons Trade and Industry
Committee to submit evidence to its enquiry on Creating a Higher
Value Economy the Intellectual Assets Centre would like to submit
the evidence given below:
2.0 LINKS BETWEEN
LIMITED PRODUCTIVITY
GROWTH AND
POOR UNDERSTANDING
OF INTANGIBLE
ASSET MANAGEMENT
IN COMMERCE
AND PUBLIC
POLICY AS
REVEALED BY
RESEARCH
2.1 The low growth in overall productivity
in Europe is due in particular to two main factors: the contribution
of information and communication technologies (ICTs) is too low
and investment is inadequate (CEC, 2004: p.9). In today's economy
productivity improvement depends heavily on investment in intangibles,
such as training, customer relationship management, brand image,
internal organisation, investment in software and ICT (CEC, 2003a).
Growth in intangible investment is nowhere more apparent than
in the services sector.
2.2 The OECD also stressed that policy for intangibles
should consist of two major actions: firstly, investment in intangibles
should be encouraged; secondly, the rate of return on intangible
investments should be maximized (CEC, 2003b: p.8). Moreover, this
focus on intangible investment does not necessarily mean the promotion
of increased intangible investment, but rather that the intangible
assets of enterprises, and in the economy as a whole, should be
made more explicit; in other words more visible, more measurable,
and as a result, better manageable (p.19). While tangible investments
are well defined (land, equipment and buildings) intangible investments
or intangibles are not. Intangibles are by their nature difficult
to define: they cannot be seen, they are heterogeneous and they
are often described in different ways (Croes, 2000).
2.3 In their final report, the High Level
Expert Group on the Intangible Economy (this project was set up
in 2000 in response to a request by the European Commission Directorate
General for Enterprise) concluded that "the main disconnect
between the old and the new economy lies in our economic and business
measurement systems, which are tracking—with ever increasing
efficiency—a smaller and smaller proportion of the real
economy" (Eustace, 2000: p.6-7). Despite many years of serious
debate our economic and statistical models have not kept pace
with the demands of the market. (|) Our established macro and
micro information systems are unable to produce routine, systematic
information on the stocks and flows of the modern economy. Instead
we have to rely on ad hoc studies for glimpses of what
is happening (Eustace, 2003: p.22).
Therefore "the present statistical
and accounting frameworks are in urgent need of updating. New
explanatory models and metrics are needed to enable us to understand
the workings of the modern economy, especially the intangible
goods and content sectors that are currently hidden from public
view. At the firm level, a new generation of analytical tools
is needed to enable company boards, shareholders and investors
to judge management performance and differentiate good, bad and
delinquent corporate stewardship" (Eustace, 2000).
2.4 This deficiency is also highlighted
in the Communication on "The competitiveness of business-related
services and their contribution to the performance of European
industry" (CEC, 2003a), where it was stated that: "reliable
information about the intangible assets of companies is needed,
both at the level of the enterprise, and in government policy
development in order to avoid inefficient resource allocation.
It also results in uncertainty and speculation on its real value".
Measurement and reporting of intangible assets has become a major
concern for governments, regulators, enterprises, the accounting
profession, investors and other stakeholders. Services enterprises
are particularly exposed to this problem since they are almost
entirely based on intangible assets. The costs of the lack of
information on the intangible assets are high and have their impact
at all levels. At firm level the lack of information can lead
to the development of wrong strategies. At capital market level
the lack of information can lead to under- or overvaluation of
companies, misallocation of resources and volatility. At country
and European level it can lead to inappropriate policies.
2.5 In the late 1990s and in the early
part of this decade numerous European initiatives and related
developments had taken place resulting in many different approaches
to the problem of measuring and reporting about intangible assets.
Moreover, recent publications in the field of intellectual capital
cover dozens of different models for reporting about intangibles
(Sveiby, 1998; Andriessen, 2004b).
2.6 According to the PRISM research consortium
(Eustace, 2003), some of these may well prove intractable, for
example:
— The frameworks generally have
very different structural architectures and do not address the
same "objects", which makes it difficult to lay down
standards, or to align or integrate the IC system with the company's
chart of accounts.
— Sophisticated users will tend
to demand indicators that are compound (ie. non-discrete). Therefore
the boundaries between them will always be ambiguous.
— The indicators are based on
primary data points that are generally neither additive nor serially
coherent, which makes them very difficult to "audit",
or otherwise prevent unwarranted double- counting and manipulation.
2.7 Notwithstanding these conclusions,
businesses have now gained considerable experience in the use
of various voluntary guidelines for reporting on intellectual
capital and other forms of intangible assets. These efforts will
only have long-term value if there is convergence of the taxonomies,
rather than a proliferation of reporting methods (CEC, 2003a:
p.27).
2.8 The urgent need for convergence is
reflected in almost all reports, surveys and meetings about the
subject. Illustrative is the call for integrating existing guidelines
into a common framework as the main conclusion of the E*KNOW-NET
survey (Bukh, et al., 2003), the PRISM "framework
for convergence" (Eustace, 2003; PRISM, 2003), and the stakeholder
call for "standard reporting of intangibles" (CEC, 2003b).
2.9 In their final report PRISM also
emphasizes the need of a holistic reporting framework that is
of practical use at the management level. "We need to go
beyond the mantra that the current reporting framework is inadequate
and the temptation to suggest yet another measurement system.
The time has come for the proliferation of guidelines and methodologies
to converge and move toward (sic)" (Eustace, 2003: p.31).
It is necessary and urgent to define sure rules and conventions
in order to measure the intangible content of value.
2.10 The RICARDIS report recommended
"Set up an International Standardization Steering Group to
facilitate the development of consensus-based standardization
of taxonomies, indicators, and IC Statements for research-intensive
SMEs and help develop XBRL[55]
standards (RICARDIS, 2006)".
3.0 THE IMPORTANCE
OF THIS
DISCIPLINE TO
THE BUSINESS-RELATED
SERVICES SECTOR
3.1 More than in any other sector of
our economy, the growth of productivity in business-related services
depends heavily on intangible investment. Therefore growth in
intangible investment is nowhere more apparent than in the services
sector. In business related services, there is only little investment
in plant and equipment, since the means of value creation is based
on exploitation of various forms of intangible assets. In order
to respond to changes in market demand, and to improve their productivity
and competitiveness, service companies have to take recourse to
investments in knowledge, skills, reputation, procedures, customer
relations etc., usually referred to as their intellectual capital,
or intangible assets.
4.0 WHAT DO
WE CONCLUDE
FROM THE
RESEARCH?
4.1 The above research suggests that
there is a problem, not just in Europe but globally, in bringing
about the desired knowledge economies. An example is the gap between
the Lisbon Agenda targets on investment in R&D and the performance
of the European Union in this regard. Below is an articulation
of this global issue within Scotland and how one initiative (within
an array of others which have been adopted) has been operating
to address the issue.
5.0 THE INTANGIBLE
ASSET MANAGEMENT
DEVELOPMENTS IN
SCOTLAND
5.1 In Scotland, at the start
of the current decade, it was acknowledged that there was unfortunately
insufficient knowledge and understanding of IA—and "Scotland
plc" was under-performing as a consequence.[56]
Some larger Scottish companies were aware of IA, but across the
range of companies such knowledge was inadequate, especially amongst
SMEs.
5.2 In 2001 a Conference held at The Gleneagles Hotel
called the "IA=" Congress drew a lot of attention to
the need to provide further assistance to businesses in Scotland
in this area of the management of intangible assets. This Congress
suggested that there was evidence that some Scottish businesses
were at least starting to realise that they needed to know about
IA. But knowledge about how to visualise and manage the IA in
their own businesses was limited and they were requesting support
to "sweat" these assets to their full commercial potential.
5.3 Perhaps more worryingly however was
that businesses and business people "didn't know what they
didn't know". Frequently they were not even aware of a need
to learn about IA—demand was not therefore indicative of
need.
5.4 This perhaps helped to explain why
there was not a clearly defined group of IA professionals and
there was limited knowledge within professional intermediaries,
excepting the UK Patent Office, patents agents and IP lawyers.
In some circumstances even these professionals were not in a position
to give comprehensive as well as impartial advice due to commercial
and legal constraints. Furthermore, there was not nearly enough
IA knowledge in the economic development networks. There were
some initiatives, mainly related to IP, where individuals gained
some introduction; however, such initiatives only contacted a
very small proportion of the company base and had generally been
limited to registrable rights (patents, trademarks and design
rights).
5.5 Thus the evidence at the time for
the market failure in Scotland, drew on three main areas;—
— the absence of knowledge of
and reference to IA within economic development policy and the
economic development networks, evidencing internal market failure;
— assumptions from initial econometrics
of the value and potential of IA that lies in Scotland's organisations,
evidencing opportunities (external market failure); and
— market demand on the only
body in the public sector offering any kind of support in this
area, confirming the external market failure.
5.6 In addition to the limited mention
of IA in stated economic development policy, there appeared to
be significant internal market failure—ie a lack of understanding
and knowledge about IA within the primary economic development
agencies (and their networks at local level) of Scottish Enterprise
and Highland & Islands Enterprise. There was anecdotal evidence
from experience of these networks that the knowledge and understanding
of IA was generally poor and, at best, patchy. The failure to
include any reference to IP, let alone IA, in the principal training
programme for business and economic development professionals
working in Scottish Enterprise was indicative at that time of
the network's failure to recognise the topic's importance.
5.7 Although the economic development
networks did recognise the need for increased innovation and new
product development, there was frequently a failure to realise
the role that IA had in this process—primarily in suggesting
and controlling innovation and diversification. Still fewer realised
that for many companies the most effective and fastest way to
innovate is to acquire IA, rather than create or develop them
internally. Obviously the more innovative an organisation (whether
externally acquired or self-generated), generally the greater
the resultant IA "pool" and thus the greater the opportunities
for creating value and competitive advantage—both for the
individual company and for "Scotland plc".
5.8 IA is a complex and frequently ill-understood
topic for already hard-pressed business advisers to take on board—ie
it is not realistic to expect business development executives
to become IA experts. It is essential and feasible however for
the advisors to know when to put IA on the agenda for their clients
and to know how and when—and to whom—to refer the
matter.
5.9 What was proposed to address the
market failures and to realise the benefits which had been identified
was a not-for-profit organisation serving Scotland's IA and IP
needs through public and private sector networks—ie the
National Intellectual Asset Centre for Scotland.
5.10 The National Intellectual Asset
Centre was seen as having the potential to: (NIAC—Draft
Strategic Plan 2002):
— be a hub for activities and
a "centre of knowledge";
— have a regional network of
local expert advisers;
— establish partnerships and
networks with private and public organisations;
— facilitate IA awareness and
effective knowledge dissemination;
— develop tools and support
for effective IAM;
— develop an IA community of
interest around which other initiatives could cluster; and
— generate a model for reproduction
elsewhere in the UK—ie develop its own IA for reproduction
after an initial Scottish pilot.
5.11 The most important aim was for the
Centre to increase Scotland's competitive advantage and assist
with the nation's development as a knowledge economy through IA
information, knowledge and expertise dissemination in partnership
with UK and international organisations.
5.12 The NIAC was to have clear objectives
for the businesses with which it would engage, namely:-
— To put IA on the business
agenda—encouraging businesses from all sectors to understand
the benefits of effective IA management;
— To make the case for IA as
a business tool and to realise the opportunities that effective
IA use and leverage can present;
— To provide support (advice
and management tools) for visualisation of IA;
— To provide initial gap analyses
and risk assessment diagnostics both for the identification of
gaps in IA knowledge in general as well as for specific audits
of business risks and inadequacies in protection;
— To provide support (advice
and management tools) for management, valuation and leverage of
IA;
— To address the perceived negatives
of costs versus value;
— To understand the role of
policing IA use and abuse by others and issues of enforcement
and competitor analysis/intelligence; and
— To link appropriately with
professional assistors and associated regulatory and consultative
bodies eg the UK Patent Office, and with the public and private
providers of IA/IP, risk assessment, technology information etc.
5.13 To achieve the above objectives,
the NIAC was to be or to include the following:-
5.13.1 Demand developer—a catalyst
and awareness raiser for IA understanding, management, leverage
and valuation, to generate demand and in response to customer
/ sectoral demands, and for educational purposes. This would involve
pro-active and reactive events programmes, ranging from small
groups to national congresses, both at the Centre and on regional
basis, as well as appropriate PR and publications.
5.13.2 Sign-poster and Information Source—a
drop-in facility for IA / IP support and a sign-poster and an
access point to a wide variety of information sources and associated
networks. This could be described as a managed funnel for accessing
the IA / IP support of the Centre and the excellent public and
private sector service and information provision. It would include
therefore reactive services such as web-based and hard copy awareness-raising
and information-giving literature on IP / IA, including own materials
and a "library" and links to (providers of) existing
materials.
5.13.3 Diagnostic Service Deliverer—"general
practitioner" type IA diagnostic services for drop-ins, referrals
and cold calls. The service would comprise initial diagnostic
meetings, and sign-posting etc. where appropriate, IA audits and
visualisations and could include gap analyses and risk assessments.
5.13.4 Mentors—a mentoring service
to be delivered and / or facilitated by IA trained specialists
where the client relationships will continue to exist over time,
comprising one or more of the following:-
— project-based assistance (though
the business case and wider business issues will always need to
be assessed) for the life-span of the project;
— company-based assistance for
IA rich companies, visualising the company's IA and / or management
of same, where the client relationship will continue to exist
over time;
— advisory assistance on the
use, assessment and accreditation of and for management tools,
such as a proposed ISO for IA Management;
— more detailed analysis and
audit of IP / IA, particularly gap and risk assessment; and
— accompanying and / or advisory
role on professional support available elsewhere for IP / IA management.
The mentoring would also include a training
role to other parts of the SE and HIE networks; the account managers
would be encouraged to participate in IA reviews and diagnostics
with companies to ensure transfer and development of knowledge
across the internal market.
5.13.5 Product Developer and Deliverer—the
developer and, in some instances, the deliverer of a number of
"productised" IA and IP business management tools, such
as:
— IP / IA diagnostic, audit
and profiling tools;
— An ISO for IP / IA management;
— Preliminary IP /IA valuation
tools;
— A business training programme
including a range of subjects from basic IP and IA management
to IP / IA valuation, to pc-based sources of IP / IA information
to role-playing (eg licence negotiation) workshops; and
— The grouping of the above
and others as a toolbox for delivery over time as a programme
and / or to be dipped in and out of as required for a business.
5.13.6 Stimulator of Private and Public
Sector Deliveries—a focus for feedback to the private organisations
(eg insurance companies) and public sector (eg Patent Office)
as to the requirements of the commercial world and encouragement
of the development of specifically linked IA products (some immediately
available on establishment of the Centre, some to be developed
over time) only accessible through the NIAC, such as:
— IP Insurance Programme, delivered
by the insurers and brokers but as part of a "grander"
initiative for IP insurance support in Scotland, providing more
readily accessible risk assessments, premiums and management assistance
at times of litigation;
— An in-depth IP / IA valuation
tool;
— Dedicated searches and information
sourcing via links and membership with such information providers
accessing IP / IA opportunities, including analysis of further
actions and implementation required;
— Financial support for certain
expert advice; and
— IA / IP detailed gap analyses,
audits and benchmarking.
5.13.7 There are other roles that were
envisaged as possibly being developed over time including:
— a more clear provision of
services for IA valuation especially in light of the still developing
accountancy procedures in the UK for intangible assets;
— know-how and show-how management
and capture tools and instruction;
— as an assessor of ISO accreditation
for IA management;
— as contributor to public sector
service provision ensuring IA / IP role on certain agendas, for
example with the foremost economic and business development adviser
training programme, a Regional Selective Assistance programme,
and the Accounting Standards Board's (ASB's) assessment of intangible
assets;
— as a repository of un-registrable
forms of IP and IA;
— encouraging targets to be
included as part of the measurements discussed in "Smart
Successful Scotland" (a policy of the last government of
Scotland and now superceded by the New Government of Scotland
Economic Policy for Scotland) perhaps by featuring on the Balanced
Scorecard or KMIS—encouraging therefore the topic to be
taken more seriously within the Scottish Economic Development
networks.
5.13.8 Certain of these service offerings
were already being developed in advance of and were seen as essential
for the NIAC to open, whilst others were to be developed over
time as the staff of the new Centre were recruited and trained
and as the product offerings emerged.
5.13.9 Given the geography of Scotland
it was thought necessary to recruit regional representatives of
the Centre to give a local service. It was felt that it would
be preferable for these regional representatives to be known to
local businesses and other local public sector providers, and
therefore were drawn from the existing public sector service delivery
mechanisms, which would also avoid duplication and the networks'
or public's confusion. NIAC was envisaged as working with a number
of partners including Innovation and Technology Counsellors (ITCs)
in each local area of Scotland, who were already recognised as
the deliverers of technology and innovation support to client
companies. As it happened the organisation employing these Counsellors
dissolved before the establishment of the NIAC and this led to
more on-the-ground work being done by the new Centre than was
originally planned.
6.0 PARTICULAR MARKET
FAILURE IN
THE AREA
OF IA MANAGEMENT
AMONG SMES
6.1 As evidenced above and also through
subsequent macro-economic analysis (Huggins and Day 2005) there
is a particular market failure in the area of intellectual assets
management among SMEs. Thus the IA Centre, while offering its
services universally to all organisations in the Scottish economy,
has targeted and focused upon SMEs.
6.2 SMEs and large organisations differ in a number
of ways, not least in size. The consequences of being a "small"
organisation are numerous, and impact upon all aspects of the
organisation, including the way profit is generated and the way
the organisation is managed and organised. This in turn impacts
upon the way knowledge management and IA measurement are approached
and developed. SMEs are typically less bureaucratic than their
larger scale counterparts, with often few, if any, complex management
systems. This leaves SMEs with less `ready made' infrastructure
for the measurement, management and development of knowledge and
other intangible assets. Instruments that focus upon highly formalised
systems of feedback and reporting, requiring detailed statistical
information and monitoring systems will therefore not find a suitable
home in a SME environment, and will typically be deemed `unworkable'
by SME management.
6.3 Another challenge for SMEs in using
traditional knowledge management techniques is their time consuming
nature. As Lambe (2002) notes, SMEs work in an environment of
pervasive risk and high pressure. All organisations face environmental
pressures, but this is magnified in a small organisation that
has less control over its immediate environment. Small organisations
are often preoccupied not with internal efficiency and effectiveness,
but with maintaining turnover and seeking new opportunities. SMEs
often consider internal audit of this nature as a luxury that
cannot be afforded. Most knowledge management tools assume sufficient
time to develop, collect, collate, analyse and act upon a vast
range of quantitative and qualitative measures and indicators
that are highly time consuming to collect. Furthermore, the complex
nature of many tools presupposes that there is a dedicated knowledge
officer or other employee dealing exclusively with issues of knowledge
management and transfer. This is highly unlikely within an SME.
Wong and Aspinwall (2005) find that just 19% of UK SMEs are involved
in any IA measurement as part of their knowledge management techniques.
6.4 A summary of some pertinent differences
between large and small companies, in terms of the types of IA
they may possess, and the way in which it can be managed and measured,
is highlighted below (Huggins and Weir 2006):
— SMEs are less likely to register
patents than their larger scale counterparts. This is most likely
due, not to a lack to ideas, but due to the high costs, complexity,
and administrative burden
— SMEs are likely, particularly
at the earliest stages, to embody much of their intellectual asset
base in human capital. The fundamental ideas and processes supporting
the organisation at this stage are likely to depend upon the founder
and immediate employees. Converting human capital to a more tangible,
"owned" format must therefore be a key objective for
SMEs
— High costs and small scale,
particularly within service-based and knowledge-based companies,
will typically lead to low quantities of tangible assets, such
as plant and machinery.
— SMEs are likely to own less
IT-based IA assets, eg complex KM intranets, billing and automated
procedures. However, they will often have documents, letters,
manuals that can be shared and documented.
— SMEs, perhaps more so than
larger organisations, have to become more agile and able to liaise
and work with other organisations. Network capital becomes paramount
to small organisations, particularly in building relationships
with suppliers, customers and collaborators and subcontractors.
7.0 ACHIEVEMENTS
OF THE
IA CENTRE SINCE
ESTABLISHMENT
7.1 The latest baseline survey conducted
on behalf of the IA Centre, by TL Dempster Ltd (2007) surveying
over 1000 Scottish businesses, has suggested that there has been
an increase since 2004 in the awareness and understanding of businesses
about IA. However there is still more work to do as the percentage
who recognise the term "intellectual assets" is still
just over 43% and those who believe they understand what IA are
is just over one third of the sample (36%).
7.2 Over half of Scottish organisations (55%) have
already considered the importance of IA to their organisation,
representing a 10% increase since 2004. On the downside only 12%
of those businesses surveyed believe they are actively managing
their intellectual assets which means there has been almost no
change since 2004 or possibly a small drop. But on the upside
it would appear that the active companies though are being even
more pro-active in managing their IA. About one third of companies
who have taken steps to protect their IA have used external advice
to help them with a significant increase in the use of legal and
accountancy advice. It would appear however that companies in
Scotland are turning less to Patent Agents or the Patent Office
for advice purposes, although these suppliers are reporting more
business.
7.3 Almost three quarters of the companies
surveyed who manage their IA believe that it is important to communicate
their value of their IA although only just over 60% are actually
doing so. This suggests that there are a number of organisations
(mainly SMEs) who consider communicating the value of IA important
but are not doing so.
7.4 The respondents to the survey were
asked if they were able to place a financial value on any of a
list of assets. The majority of organisations (both over 90%)
have a financial value on the balance sheet for fixed and moveable
assets but only around one third have a financial value either
on or off the balance sheet for any other assets. The majority
of organisations have an internal valuation of their assets. Of
those with an external valuation the majority are for a valuation
of Intellectual Property rather than other IA such as goodwill,
impact on profitability and so on.
7.5 Those organisations who considered
IA important were asked in what ways they are or could be important
now and in the future. The results suggest that organisations
consider IA to be important for issues about valuation or differentiation
for their organisation.
7.6 In terms of interest in IA there
is a strong interest in finding out more about IA. 64% of the
respondents would like to find out more about IA—this is
an increase of 0% on the 2004 survey. The
IA issues of greatest interest include general information
about IA and practical assistance for IA.
7.7 SUPPLIERS OF
IA MANAGEMENT SERVICES
7.7.1 In respect to organisations who
supply IA advice, just over half (52%) provide copyright, licensing
agreements and registered design services while 57% provided services
dealing with patents and trademarks. Over half of the 24 respondents
(to the survey total of 62) provide services in the identification,
management and exploitation of IA. However fewer respondents provide
valuation services for IA. Over 70% believe that demand for IA
support has increased with almost half of respondents believing
that demand to have increased by more than 5% since 2003. 25%
of the respondents felt that there was a particular IA/ IP service
they provided that had grown substantially more than others. These
included trade marks, IA / IP exploitation and web-related activities.
7.8 THE IA CENTRE
AS A
GOOD PRACTICE
CASE STUDY
7.8.1 In September of this year the Intellectual
Assets Centre in Scotland was named in a Study commissioned by
the European Commission as one of 15 good practice case studies
across Europe for the support for SMEs in the management of Intellectual
Property. (The UK-IPO was the only other UK example also cited).
It set out some of the achievements of the Centre as being:
— 74% engaged in training activities
— 67% conducted intramural R&D
— Strong cooperative links with
development agencies
— Many queries related to IPR
issues (about two-thirds) but most growth in IPR applications
are in Trademarks and Design Rights. Anecdotally copyright substantially
increased. Difficult to determine whether more direct commercialisation
of IPR taking place yet
7.8.2 It concluded by saying that the
IA Centre had been successful in making users apply a whole spectrum
of IP protection methods more consciously.
8.0 CONCLUSIONS AND
DISCUSSION
8.1 The recent Sainsbury Review (October
2007) underscored the fact that there is still a significant underspend
on research and development in the UK. This is particularly acute
in Scotland due to the low, by comparison, Business Research and
Development spend as a proportion of GDP. Government policies
have traditionally concentrated upon the traditional pipeline
theories of innovation where the research and development product
of science and technology (particularly the rich output of the
University and Public Research Institutions) can be spun out into
commerce. More recent research by for example NESTA (The Innovation
Gap [2006] and Hidden Innovation [2007]) suggest that such a model
does not accord with modern open innovation theory where innovation
can be sourced from numerous sources. For many SMEs this may be
a process of becoming aware of congruent technologies already
in existence and combining with their own intellectual assets
to produce new products or services. It might also be collaborating
with Further and Higher education to look at new solutions to
the need for new products and services.
8.2 One of the principal issues is the fact that
innovation which may be occurring in business is `hidden'. It
is not captured by traditional metrics and reporting. As a consequence
it might be lost or not properly protected, safeguarded and exploited
for business gain. Numerous studies have been conducted (and cited
above) which suggest that the management of the intangibles investments
in businesses are not being pro-actively managed. The work in
Scotland to start to address the awareness and understanding gaps,
particularly in small and medium sized businesses, and then to
help businesses to visualise with a view to pro-actively managing
their intangible assets starts to address the performance issue.
8.3 There are still many areas which
the Committee have highlighted as of interest to it which are
not addressed by such an initiative. However it is perhaps one
of the `clubs in the bag' (to use a golfing analogy) which provide
new options for public policy-making.
8.4 The IA Centre staff are often asked
by businesses outside Scotland whether there is such a body for
the rest of the UK. At present it would appear that the regional
arrangements for support in this area vary from region to region.
The Intellectual Assets Centre is certainly aware from its international
contacts that such Centres are growing particularly in Asia. China
for instance is starting such Centres and Singapore already has
an IP Academy. Taiwan has the Taiwanese Intellectual Capital research
Centre. Many European countries along with Japan are considering
extending the concept of Future Centres which are similar to research
and development centres but more focused upon the service sector
including public services.
55 XBRL (eXtensible Business Reporting Language) is
a language for the electronic communication of business and financial
data. It provides major benefits in the preparation, analysis
and communication of business information. It offers cost savings,
greater efficiency and improved accuracy and reliability to all
those involved in supplying or using financial data. XBRL is one
of a family of "XML" languages which is becoming a standard
means of communicating information between businesses and on the
internet. In addition to the statutory filing of their reports
many companies also provide (financial and non-financial) data
on their web sites for transferring into spread sheets. Projects
to introduce XBRL are moving ahead rapidly in a range of countries.
Many are led by regulators, although stock exchanges and other
bodies are playing a significant part. The technical underpinning
to support the use of XBRL is well in place. The main effort of
the XBRL community now focuses on the development of reporting
taxonomies. Back
56
(There is a well recognised gap over the last 20 years between
the GDP growth rate of Scotland and that of the UK as a whole,
similarly the level of Business Research and Development as a
proportion of GDP in Scotland is well beneath that of the UK as
a whole). Back
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