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Intellectual Capital

From the editor in chief
March 1, 2000

In the two years we’ve published the new Technology Review, we’ve offered you a number of editorial packages on subjects we thought were worthy of more than just one article: nanotechnology, for example, and human-machine symbiosis. But none of the packages we’ve published in the past is as important, in my view, as this issue’s Special Section on intellectual property.

Two trends are converging to make intellectual property-or IP, as insiders call it-particularly salient now. The first is that cheaper and more effective manufacturing, aided by computers and robotics, is driving down the cost of making material goods. The ultimate effect of this tendency is to make materials a less important component of finished products. The second trend is the changing nature of the corporation, triggered partly by the Internet. As companies outsource more of their operations and manage relations with their affiliates electronically, the essence of the firm shrinks to a central core. Prominent in that core is the company’s intellectual property, including its treasured brand and all the assets that support the brand: patents, trademarks, traditions.

It takes a while for major trends like these to work their way through the economy, and there’s a lot of inertia behind the old way of doing things. But the advent of the Web has pushed these twin developments forward with a vengeance. The day of intellectual property is here, and anyone who wants to surf the New Economy better understand what that means.

Here’s what we think it means:

Starting now, corporations will spend much more time developing, managing and focusing their portfolio of intellectual property assets, including patents and brands. The first “Technology Review Patent Scorecard” shows which companies are the best at doing that. As Robert Buderi notes in the accompanying article, companies are taking very different approaches to getting the most out of their intellectual property. But, whatever their specific approach, technology leaders are spending increasing time and energy on IP. Web businesses will try to obtain patents that are as broad as possible on business methods-even methods that might seem too obvious to be patentable. In a provocative article, Seth Shulman argues that the trend toward obvious and broad e-commerce patents reveals problems in the Patent Office that could roadblock innovation. Companies will be more aggressive in protecting their brands and the assets that go with their brands. In his “Viewpoint”, professor Henry Jenkins of MIT says that if media conglomerates prevent us from exchanging our own stories about media characters, they will reduce us to passive spectators in our own culture.

As the articles in our Special Section show, the growing significance of intellectual property has both benefits and drawbacks. But whatever the balance of good and evil, these developments aren’t going away. Indeed, they will only become more marked in the future. Welcome to the world of intellectual capital. In recognition of this new environment, Technology Review introduces in this issue a new column called just that: Intellectual Capital. The column will appear in every issue, written by a different expert in the field each time. By bringing you this range of voices, we will help you navigate the new world of intangible assets that’s rising up in our midst.

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