IP and the SME

Small and Medium Enterprises, or companies, along with the even smaller Micro-companies, are often put forward as a key source, some would say the key source of innovation, particularly technical innovation, which drives economic growth.  IP, the embodiment of innovation, technical or business, should then be at the heart of what SMEs do, at the heart of what SMEs create.  It is strange then to find that many, probably the majority of SMEs, though aware of IP, though aware that it is an issue for them, have little grasp of its importance to them or how to get to grips with IP.

There sometimes seems a temptation to over-emphasise the importance of SME innovation – discounting the major contribution of large companies – or to over play the importance of IP for SMEs.  Not all SMEs will be greatly disadvantaged by lack of awareness or action on IP, some will make it through.  However, for those that do make it through ill-equipped and under prepared, many more will lose value perhaps even their corporate life because they do not grasp IP in the most beneficial way.  A good approach to IP is not a panacea for all SME ills, but it can contribute to their health.

The image of an SME, even more a Micro-company, with a few motivated, driven individuals working tirelessly to create and sell a new product or service is a good reflection of reality.  Too little time, too little money, but a wealth of enthusiasm, commitment and belief in what they are doing are what you find in pretty much any new small company.  Stretching and being stretched are the day-to-day realities for the people trying to turn vision, often personal vision, into a living breathing reality.  The next pressing problem is “the issue of the day”, that day.  Long term is often, if not always, for the long term.  Intelligent and able, but resource limited: individuals, small teams, limited by the volume of what they can cope with.  Always on a limited budget.  Always, always not enough time.  Prioritisation is key, and often that means that IP, even if on the radar, is relegated as too complex, too expensive, and with benefits far far into the future, if discernable at all.  That’s the likely view of an SME on IP.  How can hours, days spent on the meaning of one turn of phrase or one word make sense when there are so many other pressures?  Pressures that must be dealt with or the company will have no tomorrow.

It is not surprising that even though awareness of IP is growing, SMEs still lag behind their  larger cousins in using IP.  Large companies certainly do use IP to great effect and benefit, with complex IP functions of highly skilled experts creating, managing, using and enforcing IP, sometimes in high-profile news-worthy stories.  This is often the enduring image of IP in large companies, the high profile law suit, with legal gladiators battling it out in court.  Much of what large companies to do create and manage IP is far less glamorous, and is made up of doing simple practical things on a large scale; using their scale to their advantage.  A lot of what needs to happen with IP is basic and simple, do-able following some simple guidance, like eating your 5 vegetables a-day.  IP can be good for a company’s, an SME’s health, even in small doses.

The challenge for SME’s is actually getting this to happen.  The IP industry is scaled up for the high volume, high value business of creating, managing and enforcing IP, particularly patents and trademarks for the major companies.  The value for the IP industry in working with SMEs is unproven.  Worse, although individual pieces of work may be profitable – even IP experts have to earn a living – there is no good model for connecting those that need the expertise, particularly those innovative SMEs, with those that can provide it.  The overhead for the IP service providers in reaching potential clients, particularly the Micro companies, makes them a very unattractive commercial proposition.

In an age where scale is key, IP service providers are getting bigger, and looking for large viable work packages, which almost inevitably means larger clients, whether large companies or other large service providers.  The number of IP service providers focussing on SMEs looks small, pitifully small against the numbers of innovative SMEs; impossible odds against the larger, even more challenge pool of diverse SMEs which underpin our economic well being.

The IP Observer will be focussing on the role of IP and the SME for all these good reasons and many more.  A thriving IP system, driven by a balanced IP Industry, must derive the best value for the most from IP, and that means addressing the needs of SMEs more fully, more effectively than has been done before.  Awareness, knowledge and insight will aid this task, and here the IP Observer can make a contribution, and for SMEs that is what is important, making a contribution.