The importance of intellectual property to SMEs

| December 21, 2018

Australia has shone as a long-term economic beacon for an entire generation now, with 27 years of positive growth behind it. During this time, the country has not experienced a technical recession, while demonstrating a remarkable ability to resist global economic overtures.

This may be about to change, however, with a declining housing market and several other challenges placing the short-term future of the economy at risk. These factors have certainly sent business confidence in Australia spiralling downwards, with the outlook for the future well below the long-term average.

With this in mind, it’s never been more important for entrepreneurs to safeguard their ventures and the valuable assets that underpin them.

Intellectual property offers a relevant case in point, and in the article below we’ll ask why this is so important for small and medium-sized firms.

What is Intellectual Property?

In technical terms, intellectual property (or IP) refers to creations of the mind and tangible inventions, while it can include everything from designs and logos to literary and artistic works on a larger scale.

Its purpose is to protect coreand potentially valuable commercial assets within your business, usually in the form of patents, copyrights and individual trademarks. While these protections come at a premium, they also protect important elements of your business from the risk of theft and safeguard the long-term integrity of the venture.

The IP system has evolved at a considerable rate in the digital age, against a backdrop of rapid technological advancement and increasingly intense market competition.

As a result, it continues to foster an environment in which both creativity and innovation can flourish, while also creating a climate of fairness and transparency in which businesses can operate.

Why is intellectual property for SMEs?

The digital age has seen numerous changes in our surrounding economic environment, the majority of which have contrived to make IP the central element in establishing value in modern-day firms.

This is more relevant in some sectors than others, of course, with the entertainment industry offering a prime example. After all, this market has undergone a particularly significant evolution during the digital age, while audiences are constantly evolving to consume new forms of media and content.

As a result of this, entertainment lawis also evolving at a considerable rate, making IP protection the single most important consideration for companies that want to distribute their content securely while safely optimising the reach of social media.

It’s also important to consider the public nature of the entertainment sector, where a business’s core IP is often visible and accessible to potential rivals at all times.

For SMEs in this space (or indeed any other market), investing in IP protection can often make the difference between success and failure in the current climate. After all, businesses that are powered by innovative and valuable tech may be vulnerable to the machinations of larger competitors, who may be able to leverage and adapt their ideas without the necessary IP protection.

This will negate any competitive advantage that an SME may have, while also undermining any long-term exit strategy that may involve a major acquisition further down the line.