In a tech-driven economy, SMEs need to get comfy with intellectual property
- SMEs shouldn’t be afraid of IP-related issues; patents can protect their technology and bring in business opportunities
- Innovation must be market-driven, sustainable and relevant
- Open innovation benefits the entire ecosystem and helps companies stay competitive
If you’re a small company, you might have a love-hate relationship with Intellectual property (IP). On one hand, patents help protect your technology; on the other, as anyone who has followed the IP war between Apple and Samsung knows, the field is notorious for bitter discord and expensive legal battles—definitely something SMEs wouldn’t want to be embroiled in.
But companies stand to benefit greatly from delving into the realm of IP, said Dr Sze Tiam Lin, Senior Director of Intellectual Property Intermediary (IPI) Singapore, who has 15 years of experience in the area.
“If companies are able to better understand IP, it can actually become a lever for their business. It certainly holds rich opportunities, and companies shouldn’t be so frightened of it,” he said.
Dr Sze was speaking on 1 November 2017 at a panel discussion entitled ‘Redefining Success Through Innovation,’ which focused on how companies can use technological innovation and digital capabilities to scale their businesses and stay relevant. The panel was held as part of the inaugural Future Economy Conference, organised by the Singapore Business Federation.
The power of patents
The essential purpose of IP is to protect a company’s intangible assets, which include ideas, data and technology. These assets are becoming increasingly significant in the digital economy, as they are crucial to a company’s ability to innovate and compete in a disruptive age.
“It is important that SMEs incorporate patents into their product development and business strategy. In negotiations with a potential partner, IP can give you significant bargaining power,” explained Mr Chew Ker Yee, Managing Vice President of Singapore nanotechnology manufacturing firm Wangi Industrial, who also spoke on the panel.
Mr Chew shared that his company started to think about IP only when they were “forced into it” by one of their clients.
“When we first developed the diamond coating on glass, our clients were hesitant to purchase it from us. They wanted to know if it was our patent, and if they would get into trouble for using it,” said Mr Chew. This got the company thinking seriously about legal protections for their products, as the issue was directly affecting its revenues.
In another instance, before going into developing nano-ink printing on glass, the company first carried out some IP landscaping. “You have to see who is doing the same thing. You wouldn’t want to spend resources on it, and the day before you announce it to the world, you find out that someone else has already done it,” explained Mr Chew.
Upon discovering that there were existing patents on the technology, Wangi Industrial proceeded to study each one carefully, in order to determine how its own technology could fit into the current landscape. This gave it confidence that its products were novel and sufficiently different from the competition.
Innovation—no longer just an option
While innovation is increasingly becoming an imperative rather than an option, it ultimately has to be market-driven and relevant, said panellist Mr Michael Leong, CEO of SESTO Robotics and co-founder of Singapore tech company HOPE Technik. Innovation without economics in the equation is not sustainable, he emphasised.
Indeed, in addition to the fear that comes with stepping out of one’s comfort zone, SMEs face a practical concern when it comes to innovation: the financial cost of failure. Still, innovation is too important to give up on so easily, said Mr Leong.
“When we say ‘fail’, we could mean two things. ‘Failing’ just means that something went wrong and you try again; but ‘failure’ means to give up. So I would say that I can accept failing, but I cannot accept failure,” said Mr Leong.
Innovation doesn’t have to be the exclusive domain of large multinationals with billion-dollar R&D budgets, said the panel. With a little bit of creativity, SMEs can also adapt and adopt new technologies to suit their needs.
Wangi Industrial, for example, keeps costs low by setting aside a small budget for its teams to buy and try out new ‘toys’, said Mr Chew. Employees are encouraged to incorporate the technologies they like into the company’s next product, and integrate them into existing systems. “If the ideas are good, we will increase the next round of funding and try them out with our customers. This way, we can get some feedback on how to improve on the new product,” Mr Chew added.
As digitalisation rapidly changes the business landscape, market competition is accelerating as well. “The way to meet these challenges is to collaborate,” said Dr Sze, who went on to emphasise the importance of open innovation.
There are two halves to this concept. “First, when a good idea you have is not relevant to your own market, let it out to others. There could be people out there who can execute this better than you. The other aspect is to harness ideas from outside to build up your product,” Dr Sze shared. This culture of sharing—fundamental to open innovation—can help the entire ecosystem become more vibrant, he concluded.