Small and medium-sized enterprises (SMEs) also create and use IP to fuel their growth strategies. A new joint study from the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) found that SMEs that applied for patents, trademarks or designs early on were more likely to experience high growth compared with those that did not.
The study showed that SMEs with at least one IP right are 21pc more likely to experience a growth period and 10pc more likely to become a high-growth firm (HGF), compared to those without IP rights.
Furthermore, firms with EU-level IP rights, as opposed to national level, are even more likely (17pc) to become an HGF.
EPO and EUIPO chief economists will discuss the study findings at the Dublin IP and R&D Summit on July 11.
The summit, sponsored by Enterprise Ireland, will highlight that, in every sector, firms taking steps to identify, protect and manage IP stand a better chance of growing in global markets.
As the study shows, IP rights allow SMEs to capture the intangible value of their innovation and use it to create barriers to competitors.
As such, IP is a critical driver for scalable growth, as companies now derive an estimated 85pc of their value from intangibles like IP.
For the wider economy, IP-owning firms contribute disproportionately to new job creation and revenue generation. It is important, therefore, that Irish firms, however small, recognise the value created through R&D and innovation, and secure their IP as a business asset.
IP, like both business and innovation, is varied. It includes trademarks, which protect the competitive advantage of brands; and know-how, for example processes, formulations, and software code that can be classified as a trade secret if it’s of value to the company, not publicly known and has been kept secret.
Alternatively, firms may file patents for technical inventions or registered designs to protect the visual appearance of products.
As a result, firms need broad IP strategies to address IP as an intangible assets from the outset and avoid future market risks. In response, Enterprise Ireland has launched the IP Strategy
Offer to support companies to develop their IP strategy and enhance IP capability.
The scheme targets R&D performers with grant aid to help them benefit from the inherently scalable nature of IP, and enhance their value proposition to investors.
Several Irish firms are already benefiting, such as conversational middle-ware company Webio.
“It helped us to focus very specifically on key aspects of our software that we’re going to build on as IP,” Webio executive vice-president of product Paul Sweeney said.
“As such, it’s allowed us to build a defensible IP position.
“You have to remember, every day as a start-up there’s something out there that can kill you. This is a non-trivial process that will help us.”
Medical devices firm Neurent Medical has also moved on its IP strategy.
Neurent chief technology officer David Townley said: “Innovation is a cumulative process. Initial exploration and inventiveness must be complemented by continued and furthering development in order to reach its full potential.
“At Neurent Medical, integration of R&D and IP processes is especially important to our strategic direction.”
These views are well-founded and backed up by a 2016 EUIPO study of 130,000 EU firms, according to EUIPO chief economist Nathan Wajsman.
“Even the simple act of trademarking something adds value,” Wajsman said.
“Firms with IP strategies created 32pc more revenue per employee than those without, and had a much higher chance of achieving growth of 20pc per year for the following three years.”
Innovative firms are increasingly aware that they need an IP strategy.
This trend, what companies should do, and how state agencies like Enterprise Ireland can help, will be the main themes of the IP and R&D summit this month.
Joe Doyle is Enterprise Ireland’s intellectual property manager