The era of the 4th industrial revolution where the value of intangible assets is maximized
The value of a listed company is determined by the stock market. In other words, the market capitalization of a company multiplied by the number of outstanding shares multiplied by the closing price of that day is the company's market value. However, the value of assets recorded in the commercial books of listed companies is generally well below the market capitalization.
Why? This is because it is an intangible asset that is difficult to record on the books and has no form. The value of intangible assets held by companies is increasing compared to the value of tangible assets such as real estate, equipment, inventory, cash, and securities that can be recorded in commercial books.
Ocean Tomo, an American company aiming to become an intellectual property merchant bank, analyzes and announces the ratio of intangible assets to tangible assets in the market capitalization of S&P 500 companies. The proportion of intangible assets in the market capitalization of S&P 500 companies was only 17% in 1975, but has gradually increased since then, reaching 80% in 2005 and 84% in 2015.
However, according to the 'Intangible Asset Market Value Study' report released by the company at the end of 2020, the proportion of intangible assets has risen to 90% in just five years. The report explains this sudden change as the impact of the COVID-19 pandemic, but the specific causal relationship has not been identified. According to the recent announcement by the Korean Intellectual Property Office, patent applications in the 4th industrial revolution fields such as digital healthcare, artificial intelligence (AI), autonomous driving, and Internet of Things (IoT) in 2020 increased by 11.2% compared to the previous year, even in the Corona era or Corona era It is undeniable that the size of intangible assets itself is growing due to several factors.
Intangible assets are called by several names. From an accounting and investment perspective, the term intellectual capital is more widely used. The 2019 Intangible Assets Financial Statement Impact Comparison Report released by the Ponemon Research Institute, a market research firm, estimates that the value of intangible assets of US companies is up to $25 trillion (about $29,700 trillion). . In addition to traditional intellectual property (patents, copyrights, trademarks, trade secrets, know-how), this report includes four items related to intellectual property such as brand, data, license, and good will in the calculation of intangible asset value. did.
The world of intangible assets is an unknown area that researchers have not fully explored yet. Although it is often misunderstood as if intellectual property is the whole of intangible assets, patents, copyrights, trademark rights, and trade secrets, etc., whose protection and utilization procedures are legally institutionalized, are especially called intellectual property. Intangible assets are a concept that encompasses numerous intangible resources that companies can utilize, such as human capital, innovative ideas, goodwill, information resources, business plans, and manufacturing processes, in addition to intellectual property.
Intangible Asset Value Determines the company's ability to utilize
However, depending on a number of factors, such as each company's ability to create and utilize intangible assets, and industry and market conditions, some intangible assets can become in fact useless resources and, in some cases, a source of enormous wealth.
British inventor Kane Kramer is a figure that some media introduces as the first developer of the MP3 player or the first developer of the iPod. In fact, Kramer and his friend James Campbell developed the first digital audio player in 1979. However, before the development of MP3 compression and decompression technology, the device, named IXI, could play music for only 3 minutes and 30 seconds.
British inventor Kane Kramer is a figure that some media introduces as the first developer of the MP3 player or the first developer of the iPod. In fact, Kramer and his friend James Campbell developed the first digital audio player in 1979. However, before the development of MP3 compression and decompression technology, the device, named IXI, could play music for only 3 minutes and 30 seconds.
The world's first MP3 player was developed by a Korean company called Digitalcast. The world's first MP3 player released by this company in partnership with Saehan Information System is 'MPMan F10'. This story will be introduced separately later.
Kramer's IXI was patented in several countries, but the prospect of commercialization was unclear even after time passed, and it was difficult for the company to afford the cost of maintaining the patent. Eventually, all patents for this technology expired due to non-payment of annuity in the late 1980s, and related intellectual property such as the technology and drawings entered the so-called public domain.
However, according to the British media Daily Mail, in 2008, Apple, which was in a patent dispute with a small company called Burst.com, requested Kramer as a witness. He spent 10 hours answering questions from Burst.com's attorneys during the deposition process for Apple. Apple attacked the validity of the Burst.com patent by claiming Kramer's IXI invention as prior art. It is not possible to confirm how much Kramer's testimony contributed to the process, but Apple's lawsuit was eventually settled with a non-litigation settlement.
In a press interview, Kramer complained that he had not been properly compensated by Apple, but there was no legal basis for Apple to compensate him. It is true that he developed a digital audio player called the IXI, and it is true that the first-generation design of the iPod looked similar to his IXI design, but all his rights were lost the moment he gave up the patent. Of course, even if they retained the rights at the time, the IXI patents expired when Apple released the iPod.
On the other hand, it is also true that Kramer developed technology that was far ahead of its time. This is because IXI, which he invented in the late 1970s, was not only a terminal, but a digital music distribution system similar to iTunes using a phone line, and even a digital rights management (DRM) technology of the sound source was applied as a comprehensive system. What is clear is that Steve Jobs's return to business, Apple's iPod released in 2001, combined with iTunes, changed the market, and became the decisive foundation for the success of the iPhone and iPad. In the end, Apple created new value by sublimating Kramer's IXI technology and design, Digitalcast's MP3 player technology, and many other intangible assets into its own. On the other hand, Kramer and his company, who invented IXI too far ahead of their time, failed to realize the value of that intangible.
