Innovation and IP strategies for growth and value creation in medicine and technology

The main focus of the MTI project is on the mutual relationship between IP, innovations and growth, and on how IP, innovations and growth can be jointly promoted. Previous studies of these relationships are very few. An important task is therefore to illuminate these relationships in various ways. Studies are done of high-tech/growth companies’ dependence upon patents; R&D-intensive companies’ dependence upon patents, growth effects of important patents; important growth-inducing innovations, small and medium-size companies or firms (SMFs) of various types; companies with large sales, large R&D and extensive patenting, and success-related factors of various types.

The project is divided into three different segments:

Valuation, Pricing and Strategies for Exploitation of Patents and New Technologies

This segment consists of three parts: Valuation, Pricing and Exploitation.

a) Valuation
The purpose of this study is to compile and analyze the value of a set of patents that for some specific reasons can be perceived to have a certain value. Through a better understanding of the value drivers of patents, suggestions can be derived for improvements of existing valuation approaches. In order to determine a technology value, different valuation approaches have been developed in recent years, although none has become a dominant standard approach yet. Among the most commonly used ones are the cost, the market, and the income approach. New approaches, like the option based valuation approach developed in relation to the Black-Scholes option model, have been rather neglected so far. In addition to the valuation of single technologies, due to high costs and resource demands, indicator based portfolio approach have been developed and are perceived to be more economically efficient and effective.

b) Pricing
Traditional pricing models mostly derive from and apply to physical product situations. The purpose of this part of the project is to:
1. Map and evaluate new pricing models for new technologies employed by innovative firms in the knowledge-based economy.
2. Develop new and better pricing models for licenses and technology trade.
3. Develop new and better tools for pricing of shares of innovative firms and business units.
4. Develop new and better pricing models for implementation in traditional engineering firms offering products, knowledge services and systems as well as new innovative firms in industry and technology-based services. These models could then be used to guide R&D, with a trade-off between shareholder value driven R&D, customer value driven R&D and employee value driven R&D.

c) Exploitation
The purpose of this study is to increase the knowledge about the relation between patent exploitation and growth. Special attention is given to understand the importance of patent exploitation in companies that have grown from being a small company to a large company. The role of the patent exploitation in companies that managed to grow large and also in companies that have not managed to grow large are explored. Case studies are made on a sub sample of the patents to give concrete examples of the relation between patents and growth.

Swedish Largest Technological and Medical Innovations

This segment draws on previously developed methodology and preliminary data in studies of large Swedish innovations. Based on a questionnaire data will be collected from persons that have been deeply involved in the innovation process of innovations in Sweden that generated considerable revenue streams. The purpose is to analyze the role and importance of patent and innovation strategies for the success of these large innovations.

High-tech firm growth

The purpose of this segment is to (1) gain an understanding about high-tech/high growth technology based firms and in particular about what role patenting has had for their growth, (2) other possible benefits and costs from patenting and (3) what ideas and suggestions these companies have to improve their ability to use patenting as an effective tool. The purpose is further (4) to prepare a quantitative analysis of the relationship between companies’ growth and patents.

Project members: Ove Granstrand, Marcus Holgersson, Frank Tietze, Thomas Ewing, Erik Eklöw and Erik Olesund.
Funded by:  Swedish Handelsbank Research Foundation.