Innovations and success in an enterprise depend greatly on the ability to manage the innovation activities in the organization. There must be skills to develop, acquire and apply new scientific knowledge and know-how. Research and development within the enterprise, along with the existing and developing expertise of its personnel, provide a basis for the propagation, development and exploitation of competitive inventions. Also cooperation with universities brings added value to the work. Information and know-how turn into a strategic resource for the enterprise. Often new enterprises are established based on potential and interesting invention, which may become a successful invention. There must naturally be a balance between goals and resources. Very important is the long range support from the management.
The main phases involved in developing an invention into a commercially successful innovation include
- Planning (technical, schedules, business, financing)
- Evaluation (novelty and IPR, market potential, technical features, business)
- Patenting (strategy, domestic and international)
- Product development (technical, production, commercial)
- Marketing and commercialisation (own production or licensing, domestic, international)
All these phases require specialists and financial resources. Commercialisation is the key to making the invention successful and to earn revenues.
Technological and economic development worldwide leans heavily on new and competitive products. They can be classified on the basis of their significance at different levels of sophistication and in different sectors of the economy, from high-tech to everyday products. Some reach international success, while others are noted within their home region or country. Technology and inventions promote general welfare and also play an important role in the production of services.
In most industries, intellectual property rights, especially patents and their exploitation, hold key significance in the development and commercialization of new products. Businesses should have an intellectual property strategy as part of their corporate planning and strategy.
An intellectual property strategy defines the principles that intellectual property rights are designed to serve and how patent matters and other intellectual property matters are handled within the enterprise. The purpose of patent policy is to support the business operations of an enterprise. Neglecting patent matters may turn into a threat to development in an internationally expanding business.
Very few ideas are immediately ready for the markets – inventions must be developed into marketable products. During their early life, inventions must be taken care of, just like plant seedlings, to allow them to grow and develop. Often several projects should be under way simultaneously, because all of them will not be successful. The development phase requires plenty of creative effort, know-how and financial resources, for which outside expertise or expertise organizations are usually needed.
Assistance in developing an idea into a product for business is often received from an innovation support organization, an Innovation Center (or Fund or Foundation ). These support organizations can be public or private or combinations. These innovation support organizations can also be a part of some other organization or they can be linked for instance with some governmental body, university, Science Park or Technology Center. If there are none, they should be established.
In many countries the government has for many reasons decided to support the patenting and development work of inventions through the Innovation Centers. The support includes often in addition to advising in patenting, product development and commercialization also financial support to cover part of the development costs of the invention. It is also good if private organizations, incubator and licensing services as well as venture capital funding possibilities are linked to the Innovation Center.
The value of intellectual property rights varies when viewed from different perspectives. These include:
- The inventor’s perspective.
- The inventing enterprise’s perspective.
- Licensee’s perspective.
- Social and perhaps global economic perspectives.
Some objectives related to the value of an invention or intellectual property rights may be economic in nature, such as financial gain, growth, profitability, stability and other rewards. They may also include social esteem, prestige, power, respect, reputation, international expansion and social welfare.
Social objectives for inventiveness, exploitation of intellectual property rights and innovation include increased economic activity, entrepreneurship, employment, tax revenue, international competitiveness and general public welfare.
Evaluation of the commercial potential of an invention entails several parts and stages, such as:
- Marketability, market potential and competitiveness
- Novelty, inventiveness, patentability, use of other IPR
- Level of technology involved
- Manufacturing viability
- Operational issues
- Business goals, potential and environment
- Management of the company
- Human and financial resources of the company
- International aspects, competition and cooperation.
The main objective with any invention after patenting is to develop it into a marketable product and an economic success.
In a company its financial results obtained from innovations are a direct indication of the success of a business. However, in recent years, financial indicators and corporate balance sheets have begun to be supplemented by the concepts of knowledge management, intellectual assets and intellectual capital, and even personnel balance sheets. Intellectual capital is part of an enterprise’s intangible assets. Its quantum may be estimated as the difference between the enterprise’s market value or acquisition price and its book value.
A key component of the intellectual capital is the so-called organisational capital. Among others, it includes:
- Intellectual property rights, such as patents and trademarks
- Corporate culture
- Trade secrets
- ICT and information systems
- Personnel and customers
Intellectual capital also includes human assets, such as know-how, teamwork skills and values. It is essential to manage these assetts properly.
Intellectual capital may be measured using indices such as
- Value added per person
- Quantity and quality of customer contacts
- Make-over rate, or the ability to introduce new products and their share of total sales
- Number and quality of patents
The intellectual capital of an enterprise and the different types of intellectual property rights are often combined to add value to the product at the commercialisation phase. Industrial products are often protected by multiple patents and have a registered trademark. In addition, the product may incorporate design characteristics, know-how that cannot be legally protected, trade secrets, and the like. All of these give additional value.