Encouraging Innovation through Strategic Intellectual Property Management: The Missing Link in SME Development

Manila Bulletin, July 28, 2009 | Go to article overview

Encouraging Innovation through Strategic Intellectual Property Management: The Missing Link in SME Development


IntroductionFor quite some time now, the national government has been implementing programs for SMEs. Several years ago the various programs of different government agencies were brought under one comprehensive umbrella program for SMEs. It was called "Sulong."The services that the government offered to SMES ranged from product development to training to financing to marketing. The different attached agencies of DTI, along with other government agencies and financial institutions, established a network to provide coordinated services for SMEs. This network and mechanism included our trade or commercial attaches around the world who served as marketing people or scouts for suppliers of materials.What was then thought of as a comprehensive SME development program actually missed one vital component: an incentive that would encourage innovation and reward creativity.Creativity and InnovationThe entrepreneur, for sure, values creativi'ty and innovation; but, it seems that it is often taken for granted. It's just part of everyday living like having a mobile phone, when ten years ago we were all fine without one.The individual artist who will labor for weeks over the canvass, or days over a paragraph, knows explicitly that creativity is his handmaiden, that, in a way, he must create something out of nothing. The ideas he expresses are his capital, and he knows that. So he doesn't sell his product based on the cost of paper, pens, brushes and his labor plus a little profit. He tries to put a value on his ideas that started it all. As a famous artist once said that the most difficult thing to paint is a rose because you must forget all the other roses you have seen before." His originality and creativity is what makes him and distinguishes him as an artist. This is his Intellectual capital, specifically, intellectual property.Entrepreneurs, on the other hand, are engaged in many things at the same time: developing a product, finding suppliers and buyers, finding investors and financing; in other words, she is managing a business. Sometimes, the creative aspect of her work - a faster process, a new design, an improved machine or tool she or an employee made up; a new name and logo for a new product - is taken for granted. It's just part of the everyday pace of running a business and turning a profit.Only when she sees the same product she developed or her design being sold with a different name and brand, or after many years of building up goodwill on her name and mark she sees another product bearing her name and mark, does she realize that someone else is harvesting what she sowed. Then she realizes the value of her brand, her trademark. By then, it could be too late.The IP System as a Tool to Encourage Creativity and InnovationThe IP system began and evolved for centuries as a tool to encourage creativity and innovation in society. By no means, is it the only tool. Even without it, creative people will produce new products. The difference, however, is that the IP system provides the incentive to talented people, whether artists, inventors or entrepreneurs.Not only do the different forms of IP acknowledge the rightful author or maker of a creative work, but it also provides exclusive rights for a limited period of time to the author to make, sell or do anything else with his work.By granting a patent to an inventor of a new product or technology exclusive rights for 20 years, the inventor can continue to develop his invention, produce it, market and sell it, thus, allowing him to recoup his investment before the invention become public domain. During that period of exclusive rights, he can take legal action against anyone who tries to imitate his patented claim in the product.In the case of trademarks, for example, an entrepreneur tries to distinguish his product from other similar products, in the market by improving quality, craftsmanship, design and packaging. He designs a mark or a logo or other feature that will tell the consumer where a product comes from so the consumer can quickly equate a mark with the quality of the product. …

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