Article at a glance:

Unlocking the value of intellectual assets

A new marketplace for intellectual assets has enabled companies with strengths in innovation and research to commercialize their ideas much faster than ever before. By leasing new discoveries or negotiating joint-marketing or manufacturing agreements, small companies can gain rapid access to markets and generate high revenues without building vast infrastructures from scratch. Some entertainment companies have pursued this strategy for product tie-ins with movies. In other cases, companies may offer radical innovations to competitors in hopes of establishing new industry standards, as Philips did with compact disc technology in the 1980s. The originator of a technology can reap billions in royalties if it catches on.

The take-away

The traditional vertically integrated intellectual-asset value chain is disintegrating. Companies that want to participate in the market for intellectual assets should acquire specific internal capabilities to exploit them.