The Maeil Business News reported on the OECD Plenary session on Intellectual Assets and Value Creation on March 6, 2007.
One of the interesting things coming out of the session is that:
40 percent of American firms’ valuation was in intellectual property during the 1980’s, whereas 70 percent of American firms’ value is in intellectual property these days, a total of $5 trillion. Richard Johnson said that innovation can be viewed differently, as its quantifiable value may be bought, sold, securitized and used as collateral, with greater opportunities for small companies and collaboration between big firms and small. He added that intellectual assets can lead to new forms of “complex… systems of (economic) webs and interrelationships.”
* OECD Plenary Speaks on ‘Intellectual Assets and Value Creation’
The Organization for Economic Cooperation and Development (OECD) held a plenary session, titled, “Intellectual Assets and Value Creation” with government and private industry representatives at the Seventh World Knowledge Program at the Sheraton Grande Walkerhill Hotel in Seoul in the morning of Oct. 19.
The plenary session, moderated by Dr. Soumitra Dutta, professor and dean of external relations for INSEAD, included OECD Senior Economist for Corporate Affairs, Grant Kirkpatrick, Senior Manager of KPMG AZSA & Co., Yoshiko Shibasaka, the President of the Korea Institute for International Economic Policy (KIEP), Dr. Lee, Kyung-tae and Senior Partner of Arnold & Porter L.L.P., Richard Johnson.
Kilpatrick spoke of how it is very complex for large firms to innovate due to the difficulty of measuring innovation. He continued with that firms’ lack of metrics and inherent risk aversion do not help in what he described as the need to “tolerate failure” as part of the innovative process. In addition, investors in the market have a lack of information about firms’ creativity, which leads to undervalued stock and market friction.
Shibasaka had a similar opinion, and began with the phrase that “(intellectual) assets are very important.” However, she added, such assets “are difficult to clarify.” She said that innovative corporate value includes financial and non-financial components, talented people and intangibles. She said that over thirty Japanese firms are reporting their intangible assets to the public in recent years despite the concern from those entities that proprietary information would leak out.
Lee spoke from a different perspective than Shibaka, as he emphasized how advanced countries like Japan and the United States have shifted much production work overseas and are seeking new, innovative ways to create value-added wealth. In a Korean government study that he quoted from, Korea has not been successful in developing an effective intellectual property rights (IPR) regime due to the decentralization of IPR governance under three government agencies; the Ministry of Culture and Tourism, the Ministry of Information and Communication and the Patent Office. He added that compared to Japan, which has many experts in the field, Korea has few, and that Korea’s high level of funding for R&D research is not reflected in the commercialization of thederived technologies. In addition, the president of KIEP asserted that Korea is “very defensive about innovation, yet we (Korea) ask developed countries to be weak (pricing intellectual property low,) yet ask developing countries to be strong (fully respect the value of domestic IPR value) which he said damages the creation of free trade agreements with countries like the United States and China.
Speaking from a legal background, Johnson noted that 40 percent of American firms’ valuation was in intellectual property during the 1980’s, whereas 70 percent of American firms’ value is in intellectual property these days, a total of $5 trillion. Johnson said that innovation can be viewed differently, as its quantifiable value may be bought, sold, securitized and used as collateral, with greater opportunities for small companies and collaboration between big firms and small. He added that intellectual assets can lead to new forms of “complex… systems of (economic) webs and interrelationships.”
For another article on this issue, please see: Protecting your Intellectual Property Rights in Korea
- Protecting your Intellectual Property Rights in Korea: Avoid “Trying Different Things & Smoking Funny Things”
- Trademarks Registration in Korea: Don’t Just Trust Us
- Korean IP Infringement Jurisdiction Centralized at Five Korean District Courts and the Patent Court of Korea: Korean Intellectual Property Case Updates
- IP Implications of Chat GPT and Samsung’s Temporary Restrictions on Generative AI in Korea
- Provisional Attachments of Assets in Pending Litigation in Korea Courts
- IPG Legal’s Firm Profile on ChatGPT (Open AI)
- The “2023 Proposal” to the Korean Electronic Financial Transactions Act
- Attaching Assets in Korea: Security on Movable Property and Receivables in Korea
- Enforceability of NDAs in Korea
- Protecting Trade Secrets in Korea: Top 5 Things to Know Before Subjecting your Business Secrets to the Korean Market