Intellectual Capital and innovation in the Guernsey Economy. John P. Ogier. Intellectual Property Economist. (presentation notes: copyright all rights reserved)

Intellectual Capital Intellectual capital represents the most valuable resource in trade and commerce in the 21 st century. Intellectual Capital is a key tool to develop innovation in the Guernsey economy. This talk will focus on the strategic value of intellectual capital for innovation, the digital economy and what needs to done to realise these goals.

Value of Intellectual Property UK value: UK London FTSE 80:20 thirty years ago 80% of stock market value was in tangible assets 20% intangibles now it’s the reverse with up to 80%of value in the intangible assets. UK investment: In 2011 the UK market sector £137.5 billion in knowledge assets (intangibles) compared with just £89.9bn in tangible assets.

Intellectual Capital: strategic economic development mix In: Innovation Diversification Knowledge and skills of employees Reputation and brand identity IT connectivity and data transfer But for this to be realised in the Guernsey economy we this to be a part of an Island development plan as has been successfully achieved in one of the highest “Island” growth economies in the world in Singapore.

Three key changes in IP /IC 1 To become view as a means of wealth generation across the economy not just as a niche specialist sector and preserve of lawyers. 2 IP / IC is innovation and wealth driven not tax driven. 3 There is now a critical shift in understanding how IP should be used away from a pure “protection, just in case” to the stimulation of innovation and wealth creation.

International importance of IP Key economic focus of President Obama EU single European patent and single digital market for music. UK appointed an IP minister Singapore written into its economic development plan alongside a digital economy.

Forms of IP/IC IP Protected in law: Registered: Patents, trade marks, registered designs, plant breeders rights, image rights (Guernsey), geographical innovations. Unregistered: Copyright, database rights, unregistered designs, integrated circuit rights. IC Protected by management and contract: Trade secrets, know how, brand perception (trust).

How IC, IP and IT link as part of the new “knowledge economy” Digital economy, the knowledge economy and all the disruptive technologies that come with the new business models operating in this space are interlinked. IT / digital provides the cables and connectivity. IP the identification and protection of assets. IC the strategic management of the whole field of intangible assets for innovation and wealth creation.

Examples of application to Guernsey industries Financial services: Insurance of a new very valuable asset class, also applications in structuring, licensing, pensions. Digital: Digital / IT will create the infrastructure (hard and soft), knowledge / IP creates the property ownership and IC enables the value realisation from the created assets. Existing industries: Specsavers brand management, Guernsey Clematis nursery plant breeders rights, Guernsey milk and geographical indicators (GIs). Fintech: Fashion the use of IP tools into the fintech space to provide a market innovation to go alongside a new tailored regulatory environment.

What needs to achieved? -1 Complete legislation: Innovation patent, GI’s and adaptation of existing rights including copyrights. IPO registration: Register for trade mark protection – few local traders or international businesses operating out of Guernsey have and they often do not realise they are not protected. International agreements: TRIPS now recognised, Berne now extended, Paris a priority along with Madrid, PCT and also Rome and Geneva for the creative / music industries

What needs to achieved? -2 Financial: Extend DTAs, prioritise intangible assets and securitisation in insolvency review. Training and education: China start at primary school, IPAN is working on a national initiative for UK Universities. What is Guernsey doing in this space?

Strategic vision. We need vision, appropriate risk appetite, speed of movement with an international dimension. It is a challenge. But if the Guernsey economy is in transition and if the changes in the World economy particularly with regard to digital and the knowledge economy, are a new era and not just a temporary phase we cannot ignore this challenge for the sake of the next generation not just out own.

Future However Guernsey’s future develops, few would disagree that innovation, diversity, high value activity, IT with related connectivity, use of key knowledge / skills and finance should be part of the mix. If this is the case, then IP and IC has a strategic role in our future economy. We need to be developing and applying these IP tools now for a successful future in our Island.

Intellectual Capital and innovation in the Guernsey Economy. John Ogier. Intellectual Property Economist. (presentation notes copyright all rights reserved)