Traditional value chains are being redefined by digitalisation, AI advancements, and the rise of circular economy models. These structures are giving way to more intricate networks, characterised by new types of competition, increased collaboration, data sharing, and a blurring of industry boundaries.
These shifts inevitably create friction between players – challenges that arise when venturing into new products or services, expanding into new markets, or adopting disruptive technologies that alter their roles and positions in the value chain, as well as their share of the value pool.
While this friction presents significant risks – such as loss of market share, commoditisation of expertise, or platform dependency – they also open up new opportunities for innovation, differentiation, and collaboration. A key to navigating these frictions lies in effectively managing intellectual property (IP).
IP acts as shield and lever in shifting value chains
Take, for example, an industrial integrator (e.g. Siemens or Caterpillar) aiming to offer data-driven services. They face significant friction from operators over the right to access customer data – a critical enabler for delivering proprietary analytics. Without an effective IP strategy, the integrator risks being disintermediated by platform providers or losing value to component suppliers expanding into analytics.
Similarly, equipment providers (e.g. Cummins or SKF) venturing into "X-as-a-Service" models must navigate complex dual relationships with integrators. They strive to balance plug-and-play interoperability - essential for collaboration – against the risk of commoditising their domain expertise. A robust IP strategy protects their proprietary knowledge and reinforces the unique value of their service offerings.
Operators (e.g. Deutsche Bahn or Rio Tinto), on the other hand, depend on analytics to optimise performance. Their challenge is avoiding vendor dependency and platform lock-in, which can shift power and profitability to platform providers. By strategically leveraging IP, operators can secure ownership of data insights and maintain control over their share of the value chain.
IP acts as both a shield and a lever. It can safeguard competitive advantages, secure access to critical data, and enable businesses to stake their claim in emerging value pools. By strategically aligning IP management with business goals, companies can not only mitigate risks but also capitalise on the opportunities that arise from shifting roles and positions in the value chain.
The modern IP game: from local protection to global advantage
Traditionally, intellectual property management focused on protecting products in local markets. Today, industry convergence and global market interconnectivity have shifted the focus to controlling technology on a global scale.
Technologies increasingly transcend their original applications and industries. For example, "internet of things" (IoT) solutions designed for predictive maintenance in mining can also drive asset management in oil and gas, rail or manufacturing. Similarly, carbon capture technologies or advanced recycling methods are equally relevant across diverse sectors and geographies. Whether deployed in China, the United States, or Europe, these technologies operate in a borderless marketplace.
This global reach creates both opportunities and risks. Companies can expand into new markets by leveraging the universal applicability of their innovations, but they also face threats from competitors who may adopt these technologies faster or block their use altogether through aggressive IP strategies.
To succeed, businesses must ensure their IP management aligns with global ambitions. This means protecting core technologies in key markets, using IP to secure partnerships and generate revenue streams, and leveraging IP strategically to deter competitors or support expansion efforts.
Bridging the gap for the c-suite
As the C-suite navigates shifting value chains, emerging friction points, and global strategies, the need for tailored IP support is clear. Consulting firms in this space must rise to the challenge, offering end-to-end IP services that combine strategic management consulting with operational execution globally.
For IP to act as a strategic asset, it must be embedded into business decision-making. This means translating business priorities into IP priorities and ensuring every move in building, managing, and deploying IP assets supports the company's strategy.
By executing this approach globally, companies can unlock the full potential of their IP portfolios—driving growth, securing competitive advantage, and positioning themselves to lead and win in a rapidly evolving marketplace.
Originally published December 2024
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