One of the key results of digitalization is closer co-operation between traditional manufacturing companies and those within the ICT industry. Yet when it comes to IP management, ICT companies manage their intellectual property quite differently from more traditional industries. In this article the authors highlight the key success factors for traditional manufacturers to successfully manage IP in the context of digitalization.
As the digitalization of society proceeds at a seemingly unstoppable pace, it brings together industry sectors that used to be breeds apart. Well-known examples of this socalled ”industry convergence“ can be found within manufacturing. SKF is internet enabling its ball-bearings in order to allow preventive maintenance, while Tesla has connected its Model S to allow over-the-air software updates. At the same time ICT companies such as Google are building prototypes of self-driving cars and thereby entering a new market space. Additionally, the development of the Internet of Things (IoT) promises to revolutionize the world by connecting everyone to everything all of the time with the help of ICT . The market for connected products is large and growing. For example, in the Nordic region alone, the IoT market was estimated to generate €5.3bn in revenue in 2015 and to grow with a CAGR of 17 percent between 2015 and 2020.
As a result, ”traditional“ companies from industries such as discrete manufacturing now find themselves both collaborating and competing with previously alien companies from the ICT sector. Unsurprisingly, we have found that ICT companies manage, protect and leverage their intellectual property (IP) very differently compared to companies in more traditional industries. If manufacturing companies are to benefit from the opportunities that digitalization has to offer, they need to ensure that they partner and compete with the ICT sector on an equal basis. This includes the management of IP. Besides the fact that IP enables a company to sell products that generate revenue, patents themselves have value. While this varies depending on the technology itself, public patent transactions indicate that on average a single patent can be worth as much as $300,000.
What does all of this mean for manufacturing companies? What are the key success factors to cope with digitalization from an IP management perspective?